final ppt and social_ responsibilty
TRANSCRIPT
Corporate Social Responsibility (CSR)y Corporate Social Responsibility (CSR) is becoming an
increasingly important activity to businesses nationally and internationally. As globalization accelerates and large corporations serve as global providers, these corporations have progressively recognized the benefits of providing CSR programs in their various locations. CSR activities are now being undertaken throughout the globe.
What is corporate social responsibilityy The term is often used interchangeably for other terms such as
Corporate Citizenship and is also linked to the concept of Triple Bottom Line Reporting (TBL), which is used as a framework for measuring an organization's performance against economic, social and environmental parameters. y The rationale for CSR has been articulated in a number of ways. In essence it is about building sustainable businesses, which need healthy economies, markets and communities. y The key drivers for CSR are:1. Enlightened self-interest 2. Social investment 3. Transparency and trust 4. Increased public expectations of business
Corporate Social ResponsibilityPreliminary definitions of CSRy The impact of a company s actions on society y Requires a manager to consider his acts in terms of a
whole social system, and holds him responsible for the effects of his acts anywhere in that system
Definitions and Relationshipsy Corporate social responsibility (CSR) is the process
by which businesses negotiate their role in society y In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done y Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior
Corporate Social Responsibility ContinuumDo more than required; e.g. engage in philanthropic giving Integrate social objectives and business goals
Maximize firms profits to the exclusion of all else
Fight social responsibility initiatives
Balance profits and social objectives
Do what it takes to make a profit; skirt the law; fly below social radar
Comply; do what is legally required
Articulate social value objectives
Lead the industry and other businesses with best practices
Corporate Social Responsibility (CSR)Corporate Citizenship Concepts y Corporate social responsibility emphasizes obligation and accountability to society y Corporate social responsiveness emphasizes action, activity y Corporate social performance emphasizes outcomes, results
Corporate Social Responsibility (CSR)Business Criticism/ Social Response CycleFactors in the Societal Environment Criticism of Business Increased concern for the Social Environment A Changed Social Contract
Business Assumption of Corporate Social Responsibility Social Responsiveness, Social Performance, Corporate Citizenship A More Satisfied Society Fewer Factors Leading to Business Criticism Increased Expectations Leading to More Criticism
Corporate Social Responsibility (CSR)Historical Perspectivethe invisible hand of the marketplace protected societal interest y Legal model laws protected societal interestsy Economic model
Corporate Social Responsibility (CSR)Historical Perspectivey Modified the economic model y Philanthropy y Community obligations y Paternalism
Corporate Social Responsibility (CSR)Historical Perspectivey What was the main motivation? y To keep government at arms length
Corporate Social Responsibility (CSR)Historical Perspective From the 1950 s to the present the concept of CSR has gained considerable acceptance and the meaning has been broadened to include additional components
Corporate Social Responsibility (CSR)Evolving Viewpointsy CSR considers the impact of the company s actions on
society (Bauer) y CSR requires decision makers to take actions that protect and improve the welfare of society as a whole along with their own interests (Davis and Blomstrom)
Corporate Social Responsibility (CSR)Evolving Viewpointsy CSR mandates that the corporation has not only
economic and legal obligations, but also certain responsibilities to society that extend beyond these obligations (McGuire)
Corporate Social Responsibility (CSR)Evolving Viewpoints y CSR relates primarily to achieving outcomes from organizational decisions concerning specific issues or problems, which by some normative standard have beneficial rather than adverse effects upon pertinent corporate stakeholders. The normative correctness of the products of corporate action have been the main focus of CSR (Epstein)
Corporate Social Responsibility (CSR)Carroll s Four Part Definition y CSR encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time
Corporate Social Responsibility (CSR)Carroll s Four Part Definition Understanding the Four ComponentsResponsibility Economic Legal Ethical Societal Examples Expectation Required Be profitable. Maximize sales, minimize costs, etc. Required Expected Obey laws and regulations. Do what is right, fair and just. Be a good corporate citizen.
Discretionary Desired/ (Philanthropic) ExpectedBusiness and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved
Pyramid of CSR
Corporate Social Responsibility (CSR) CSR in Equation Form Is the Sum of:Economic Responsibilities (Make a profit) Legal Responsibilities (Obey the law) Ethical Responsibilities (Be ethical) Philanthropic Responsibilities (Good corporate citizen) CSR
Corporate Social Responsibility (CSR)Stakeholder ViewStakeholder Group Addressed and Affected CSR Component Economic Legal Ethical Philanthropic Owners Con- Employees Community sumers 1 4 2 3 3 4 3 2 1 4 1 2 2 4 3 1 Others 5 5 5 5
Corporate Social Responsibility (CSR) Arguments Againsty Restricts the free
market goal of profit power maximization y Limits the ability to y Business is not compete in a global equipped to handle marketplace social activities y Dilutes the primary aim of business
y Increase business
Stakeholder ApproachAccording to the Stakeholder Approach: y In defining or redefining the company mission, strategic managers must recognize the legitimate rights of the firm s claimants. y In addition to stockholders and employees, these include outside stakeholders affected by the firm s actions.
Perceived Stakeholdersy Customers y Government y Stockholders y Employees y Society
Steps to Incorporate Stakeholders:1. 2. 3. 4.
Identification of stakeholders Understanding stakeholders specific claims vis--vis the firm Reconciliation of these claims and assignment of priorities Coordination of the claims with other elements of the company mission
Dynamics of Social Responsibilityy y y yy y y y y
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
Corporate Social Responsibility (CSR) Arguments Fory Addresses social issues y Limits future government
business caused and allows business to be part of the solution y Protects business selfinterest
intervention y Addresses issues by using business resources and expertise y Addresses issues by being proactive
Corporate Social Responsibility (CSR) Business Responsibilities in the 21st Centuryy Demonstrate a commitment to society s values and
contribute to society s social, environmental, and economic goals through action. y Insulate society from the negative impacts of company operations, products and services. y Share benefits of company activities with key stakeholders as well as with shareholders. y Demonstrate that the company can make more money by doing the right thing.
Corporate Social ResponsivenessEvolving Viewpoints y Ackerman and Bauer s action view y Sethi s three stage schema y Frederick s CSR1, CSR2, and CSR3 y Epstein s process view
Corporate Social PerformanceExtensions and Reformulationsy Wartick and Cochran s extensions y Wood s reformulations y Swanson s Reorientation
Corporate Social Performance
Corporate Social Performance Nonacademic Researchy Fortune's ranking of most and least admired
corporations y Council on Economic Priorities Corporate Conscience Awards y Business Ethics Magazine Awards y WalkerInformation s Research on the impact of social responsibility
Corporate CitizenshipCorporate citizenship embraces all the facets of corporate social responsibility, responsiveness and performance
Social and Financial PerformancePerspective 1: CSP Drives the RelationshipGood Corporate Social Performance Good Corporate Financial Performance Good Corporate Reputation
Perspective 2: CFP Drives the RelationshipGood Corporate Financial Performance Good Corporate Social Performance Good Corporate Reputation
Perspective 3: Interactive Relationship Among CSP, CFP, and CRGood Corporate Social Performance Good Corporate Financial Performance Good Corporate Reputation
Social and Financial PerformanceA Multiple Bottom-Line Perspective
Socially Conscious or Ethical InvestingSocial screening is a technique used to screen firms for investment purposes
CSR s Effect on Mission Statement
y The mission statement embodies
what company believes y Managers must identify all stakeholder groups and weigh their relative rights and abilities to affect the firm s success
Social Audity A social audit is an attempt to
measure a company s actual social performance against its social objectives. y The social audit may be used for more than simply monitoring and evaluating firm social performance.
Five Principles of Successful CSIs1. 2. 3. 4. 5.
Identify a Long-Term Durable Mission Contribute What We Do **This is the most important principle
Contribute Specialized Services to a Large-Scale Undertaking Weigh Government s Influence Assemble and Value the Total Package of Benefits
The Limits of CSR Strategiesy
y
y
Some companies have embedded social responsibility and sustainability commitments deeply in their core strategies. Larger companies must move beyond the easy options of charitable donations but also steer clear of overreaching commitments. CSR strategies can also run afoul of the skeptics the speed of information on the Internet makes this an issue with serious ramifications.
The Future of CSRy y
y y
CSR is firmly and irreversibly part of the corporate fabric Corporations will face growing demands for social responsibility contributions far beyond simple cash or in-kind donations The public s perception of ethics in corporate America is near its all-time low Even when groups agree on what constitutes human welfare, the means they choose to achieve it may differ
Management EthicsThe Nature of Ethics in Business: y Belief that managers will behave in an ethical manner is central to CSR y Ethics the moral principles that reflect society s beliefs about the actions of an individual or a group that are right and wrong y Ethical standards reflect the end product of a process of defining and clarifying the nature and content of human interaction
Approaches to Questions of Ethicsy Utilitarian Approach y Moral Rights Approach y Social Justice Approach y Liberty Principle y Difference Principle y Distributive-Justice Principle y Fairness Principle y Natural-Duty Principle
Code of Business Ethicsy
To help ensure consistence in the application of ethical standards, an increasing number of professional associations and businesses are establishing codes of ethical conduct.The following all have ethics codes:y y y y y y
y
Chemists Funeral directors Law Enforcement Agents Hockey Players Librarians Physicians
Major Trends in Codes of EthicsIncreased interest in codifying business ethics has led to both the proliferation of formal statements by companies and to their prominence among business documents. 2. Such codes used to be found solely in employee handbooks. 3. Companies are adding enforcement measures to their codes. 4. Increased attention by companies in improving employees training in understanding their obligations under the company s code of ethics.1.
Implications for Enterprises: CSR ManagementHow do companies address socio-environmental & legal compliance issues? Policies - Code of Conduct Systems - Compliance Management Reporting - Accounting and Reporting
CSR Management: Systems approachSustainable business development does not come about of its own accord. Rather, commitment to sustainability demands that corporate processes be reliably controlled and that everyone's actions in finance as much as in environmental and social areas - be coordinated. Prerequisites for this are binding guidelines, unambiguous corporate goals and a clear organizational structure.
CSR Management: Management structure
VP of Human
Corporate Responsibility Officer
CSR Management: Plan, Do, Check, Act methodPlan Consult stakeholders Establish code of conduct Set targets
Do Establish management systems and personnel Promote code compliance
Act Corrective action Reform of systems
Check Measure progress Audit Report
Code of Conduct: Widespread adoption among TNCsAdoption of More than half of the 100 largest firms by global revenue (Fortune Global 100) More than a third of the 100 largest firms by foreign assets (UNCTAD WIR 100) 57% of all foreign assets 51% of all foreign sales 65% of all foreign employees
Codes found among all industrial sectors.Not Specified 12% Multi-Sector 7% Technology 17%
Heavy Industry 27% Light Industry 17%
Services 20%
Source: OECD 1999 survey of 233 codes
Code of Conduct: Issue emphasis varies by industryHeavy Industry Light Industry Services Environment Fair Employment & Labour Rights Rule of Law Fair Business Practices
Technology
Multi-Sector0 20 40 60 80 100
% of Codes addressing issue
Code of Conduct: Emerging consensus on key issuesBribery/improper payments Conflict of interest Security of proprietary information Receiving gifts Discrimination / equal opportunity Giving gifts Environment Sexual harassment Antitrust Workplace safety Political activities Community relations Confidentiality of personal information Human rights0% 25% 50% 75% 100%
% of codes addressing issue
Code of Conduct: Cascade effect100%
82%as % of all codes surveyed 75%
50%50%
34%25%
22%
0%
Company
Contractors
Subcontractors
Customers
Code of Conduct: Cascade effectSuppliers/ Vendors JV PartnersGiving gifts Receiving gifts Bribery/improper payments Conflict of interest Environment Discrimination / equal opportunity Sexual harassment Workplace safety Human rights Political activities Whistleblowing Child labor Nepotism0% 10% 20% 30% 40% 50%
% of COE applying to JV partner or Supplier/Vendor
Sphere of InfluenceWho is to be influenced?
Sphere of InfluenceWhat issues are to be influenced?
Sphere of InfluenceHow are those issues to be influenced?
Sphere of InfluenceExample: Mattel Who: suppliers, JVs and branch plants What: OSH How: focus on manufacturing processes, HR, factory design
CSR Management: Governing the value chain
Compliance Management: Management by certificationISO 14000 by RegionFar East Aust./ New Zealand
SA 8000 by RegionEurope
Africa/ W. Asia
S. America N. America Europe
Asia
N. America Africa S. America
Introduced 1995 By 2002: 37,000 factories, 112 countries
Introduced 1998 By 2005: 763 factories, 47 countries
Compliance Management: Management by certification
ISO 26000: Social Responsibility To be Introduced in 2009 or 2010 NOT a Management System (?) NOT a Certifiable Standard (?)
ISO 26000 RoadmapPrinciples of SR1. Ethical behaviour 2. Respect for rule of law 3. Respect for international norms of behaviour 4. Respect for and considering of stakeholder interests 5. Accountability 6. Transparency 7. Precautionary approach 8. Respect for human rights
Core SubjectsOrganizational Governance
Implementing SR7.3 Working With Stakeholders
7.2 Defining scope Fair operating practises Community & society development Consumer issues Labour Practises Human Rights
7.4 Integrating into organization 7.5 Implementing in daily practise 7.7 Evaluating performance 7.8 Enhancing credibility
Environment
7.3 Communicating