Download - 3 CSR & Ethics
-
7/31/2019 3 CSR & Ethics
1/12
McGraw-Hill/IrwinStrategic Management, 10/e Copyright 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Corporate SocialResponsibility and
Business Ethics
-
7/31/2019 3 CSR & Ethics
2/12
1-2
Stakeholder Approach
According to Stakeholder Approach:
In defining or redefining the company mission,
strategic managers must recognize the legitimate
rights of the firms claimants.
These include outside stakeholders affected by the
firms actions.
-
7/31/2019 3 CSR & Ethics
3/12
1-3
Perceived Stakeholders
Customers
Government
Stockholders Employees
Society
-
7/31/2019 3 CSR & Ethics
4/12
1-4
Steps to Incorporate Stakeholders:
1. Identification of stakeholders
2. Understandingstakeholders
specific claims vis--vis the firm
3. Reconciliation of these claims
and assignment ofpriorities
4. Coordination of the claims with
other elements of the companymission
-
7/31/2019 3 CSR & Ethics
5/12
1-5
Dynamics of Social Responsibility
Inside vs. Outside Stakeholders
Duty to serve society plus duty to
serve stockholders
Flexibility is key
Firms differ along:
Competitive Position
Industry
Country
Environmental Pressures
Ecological Pressures
-
7/31/2019 3 CSR & Ethics
6/12
1-6
Inputs to the Development of
Company Mission
-
7/31/2019 3 CSR & Ethics
7/12
1-7
The 4 Es of Marketing Strategy:
Make it easy for the consumer to be green
Empower consumers
with solutions Enlist the support
of the consumer
Establish credibility with all publics
and help to avoid a backlash
-
7/31/2019 3 CSR & Ethics
8/12
1-8
Types of Social Responsibility
Economicthe duty of managers, as agents of thecompany owners, to maximize stockholder wealth
Legalthe firms obligations to comply with the
laws that regulate business activities Ethicalthe companys notion of right and proper
business behavior.
Discretionaryvoluntarilyassumed by a business organization.
-
7/31/2019 3 CSR & Ethics
9/12
1-9
CSR & Profitability
Corporate social responsibility(CSR), is the idea that business has a
duty to serve society in general as well
as the financial interests ofstockholders.
The dynamic between CSR and
success (profit) is complex. They are
not mutually exclusive, and they are
not prerequisites of each other.
-
7/31/2019 3 CSR & Ethics
10/12
1-10
Factors Complicating a
Cost-Benefit Analysis of CSR:
1. Some CSR activities incur no dollar costs at all. Infact, the benefits from philanthropy can be huge.
2. Socially responsible behavior does not come at a
prohibitive cost.3. Socially responsible practices may create savings,
and, as a result, increase profits.
4. Proponents argues that CSR costs are more thanoffset in the long run by an improved company
image and increased community goodwill.
-
7/31/2019 3 CSR & Ethics
11/12
1-11
Sarbanes-Oxley Act of 2002
CEO and CFO must certify every reportcontaining companys financial statements
Restricted corporate control of executives,accounting firms, auditing committees, and
attorneys Specifies duties of registered public
accounting firms that conduct audits
Composition of the audit committee and
specific responsibilities
Rules for attorney conduct
Disclosure periods are stipulated
Stricter penalties for violations
-
7/31/2019 3 CSR & Ethics
12/12
1-12
Social Audit
A social audit is an attempt to measure acompanys actual social performance against
its social objectives.
The social audit may be used for more than
simply monitoring and evaluating firm social
performance.