Chapter 2Chapter 2Corporate Corporate
Citizenship: Social Citizenship: Social Responsibility, Responsibility,
Responsiveness, Responsiveness, and Performanceand Performance
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1
Business Allegations
• Little concern for the consumer• Cares nothing about the deteriorating social
order• Has no concept of ethical behavior• Indifferent to the problems of minorities
and the environment What responsibility does business have to
society? Business for Social Responsibility (BSR) is a
consulting firm and global business network helping organizations to develop sustainable business strategies and solutions.
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Corporate Social Responsibility
Corporate Social Responsibility•Seriously considering the impact of a company’s actions on society.
Requires the individual to consider his or her acts in terms of a whole social system, and holds him or her responsible for the effects of his or her acts anywhere in that system.
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Historical Perspective on CSR
4
Economic Model
Legal Model
Social Model
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Stakeholder Model
The Four Components of CSR
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Responsibility
Societal
Expectation
Examples
Economic
Required
Be profitable. Maximize sales, minimize costs.
Legal
Required
Obey laws, adhere toregulations
Ethical
Expected
Avoid questionable practices.Do what is right, fair, and just
Philanthropic
Desired/Expected
Be a good corporate citizen. Give back.
The CSR Equation
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Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities Philanthropic Responsibilities
TotalCorporate
CSR
=
+
+
+
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A stakeholder perspective focuses on the CSR pyramid as a unified whole.
Arguments Against CSR
• The classical economic view that business’ only goal is the maximize profits for owners.
• Business is not equipped to handle social activities.
• It dilutes the primary purpose of business.
• Businesses have too much power already .
• It limits the ability to compete in a global marketplace.
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Arguments For CSR
• It addresses social issues brought on by business, and allows business to be part of the solution.
• Enlightened self-interest: businesses must take actions to ensure long-term viability.
• Wards off future government intervention.
• It addresses issues by using business resources and expertise.
• It addresses issues by being proactive.
• The public supports CSR.8
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The Drivers of Corporate Citizenship
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Benefits of Corporate Citizenship
Improved employee relations
Improved customer relationships
Improved business performance
Enhanced marketing efforts
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“Triple Bottom Line” Perspective
Key Spheres of Sustainability1.Economic
2.Social
3.Environmental
Corporate sustainability is the goal.
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Reasons for the Upsurge in Socially Responsible Investing
1. More reliable research on CSP
2. Investment firms using social criteria have solid track record
3. The socially conscious 1960s generation is making investment decisions
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