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Wk10_1301 CSR (Ch.7,8)

Course: TELFER ADM 1301, Fall 2010
School: University of Ottawa
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Word Count: 1297

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Week10 CorporateSocialResponsibility SocialContextofBusiness TextReference:Chapters7,8 Articlesofinterest OpinionpieceonrationaleofCSR http://www.projectsyndicate.org/commentary/bhagwati5/English CBCNewsclip:fastfood,kids,&government http://www.cbc.ca/video/#/News/Featured%20Videos/ID=1633938810 CBCNewsclip:cleanenergystrategybusiness&NGOsdriving...

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Coursehero >> Canada >> University of Ottawa >> TELFER ADM 1301

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Week10 CorporateSocialResponsibility SocialContextofBusiness TextReference:Chapters7,8 Articlesofinterest OpinionpieceonrationaleofCSR http://www.projectsyndicate.org/commentary/bhagwati5/English CBCNewsclip:fastfood,kids,&government http://www.cbc.ca/video/#/News/Featured%20Videos/ID=1633938810 CBCNewsclip:cleanenergystrategybusiness&NGOsdriving http://www.cbc.ca/video/#/News/1221258968/ID=1633908170 THECORPORATION[7/23]MonstrousObligations http://www.youtube.com/watch?v=3vorWknUybY TheEconomist:SchumpeterCompaniesarentcharities: http://www.economist.com/node/17305554?story_id=17305554 2 Chapter7Outline CorporateSocialResponsibility:DefinitionandKey Elements CaseforInvolvementandCounterarguments SocialResponsibilityTheories PyramidofCorporateSocialResponsibility CorporateSustainability(CS) ReputationManagement SocialImpactManagement TripleEBottomLine(TBL) GoodCorporateCitizenship 3 CorporateSocialResponsibility: Definition Thewayacorporationachievesa balanceamongiteconomic,social,and environmentalresponsibilitiesinits operationssoastoaddress shareholderandotherstakeholder expectations. 4 KeyElementsofCSR Corporationshaveresponsibilitiesbeyondtheproductionof goodsandservices. Theseresponsibilitiesinvolvehelpingtosolvesocialproblems. Corporationshaveabroaderconstituencythanjust stockholders. Corporationshaveimpactsbeyondsimplemarketplace transactions. Corporationsserveawiderrangeofhumanvaluesthanjust economicvalues. Principlesof:legitimacy,publicresponsibility, managerialdiscretion (Wood,textpage135) 5 CaseforInvolvement Businessmustsatisfysocietysneeds. CSRpreventspubliccriticismandgovernmentregulation. Businessandsocietyareinterdependent. CSRisgoodforthebottomline. InvestorsandconsumerssupportCSR. Addressingsocialproblemscanbecomefinancialopportunities (e.g.,pollutionabatement). BusinessshouldtakelongtermCSRapproach. Socialactionsimprovepublicimageandgoodwill. Businesscansolveproblemsaswellasgovernment. Proactiveapproachisbetterthanreactive. Businesspeoplearealsoconcernedcitizens. 6 Counterarguments Profitmaximizationistheprimarypurposeofbusiness. Businessisresponsibletoshareholders. Socialpolicyisroleofgovernment. Businesslackstraininginsocialissues. CSRwouldgivetoomuchpowertobusiness. Businessinvolvementinsocialmattersincreasescosts. NoreliableguidanceforbusinessinCSRmatters. Businesscannotbeheldaccountableunlikesocialinstitutions. Thereisdividedsupportinbusinesscommunityforsocial involvement. 7 SocialandFinancialPerformance Perspective 1: CSP Drives the Relationship Good Corporate Social Performance Good Corporate Financial Performance Good Corporate Reputation Perspective 2: CFP Drives the Relationship Good Corporate Financial Performance Good Corporate Social Performance Good Corporate Reputation Perspective 3: Interactive Relationship Among CSP, CFP, and CR Good Corporate Social Performance Good Corporate Financial Performance Good Corporate Reputation 8 SocialResponsibilityTheories Amoralview Personalview Traditionalviewofbusinessasmerelyprofit makingentity Corporationsarelikepeopleandcanthereforebe heldaccountablefortheiractions Corporationsaresocialinstitutionswithsocial responsibilities Source: Klonoski, 1991 9 Socialview PyramidofCorporateSocial Responsibility Be a good corporate citizen Be ethical Obey the law Be profitable Philanthropic Desired Expected Required Required Ethical Legal Economic Source: Archie Carroll, 1991 10 CorporateSocialResponsibility EconomicResponsibilities(Makeaprofit) +LegalResponsibilities(Obeythelaw) +EthicalResponsibilities(Beethical) +PhilanthropicResponsibilities(Goodcorporatecitizen) =CorporateSocialResponsibility 11 CorporateSustainability(CS) CompliancedrivenCS:followregulations ProfitdrivenCS:focusonbottomline CaringCS:gobeyondlegalcompliance SynergisticCS:wellbalancedsolutions HolisticCS:fullyintegratedCS 12 ReputationManagement Reputationmanagementisaneffortto enhanceacorporationsimage Previousfocusonmediaandpublicrelations aswellascrisismanagement Today,focusisonrelationshipswithall stakeholders Reputationstakealongtimetobe established,butcanbedestroyedquickly 13 SocialImpactManagement Fieldofinquiryattheintersectionofbusiness needsandwidersocietalconcernsthat reflectsandrespectsthecomplex interdependencybetweenthetwo. Evaluates3aspectsofbusiness: Purposeofbusiness Socialcontextofbusiness Metrics:howperformanceismeasured AspenInstitute:http://www.aspeninstitute.org/about 14 TripleEBottomLine(TBL) Evaluatesacorporationsperformance economic,social,andenvironmental accordingtoasummaryofthe valuethecorporationaddsordestroys. Nowformsthebasisforcorporate reportingofeconomic,ethical,and environmentalresponsibilities. 15 GoodCorporateCitizenship: Benefits Reputation management Riskprofileandrisk management Employeerecruitment, motivation,and retention Investorrelationsand accesstocapital Source: World Economic Forum Learningand innovation Competitiveness andmarket positioning Operational efficiency Licenceto operate 16 NewApproachto CorporateCitizenship Limited Equivalent Focusoncorporategiving Emphasisonsustainability Definedasasetofindividual,social,civil, andpoliticalrights Source: Matten and Crane, 2005 Table 7.3; page 150 of text 17 Extended Chapter8Outline ResponsestoCorporateSocialResponsibility PlanningforCSR ArgumentsForandAgainstCSR TrendsandConcernsinCorporateGiving CorporateVoluntarismandSponsorship SocialVenturePhilanthropy(SVP) SocialEnterpriseandEntrepreneurship SmallBusinessandCSR ContemporaryCSR:InvestmentandInvolvement 18 Responsesto CorporateSocialResponsibility Corporategiving Voluntarism Corporatesponsorship Socialventurephilanthropy Socialenterprise High Acceptance LowAcceptance ForProfit(eg:WholeFoods) NotforProfit(eg:HabitatforHumanity 19 PlanningforCSR ConductCSRassessment DevelopaCSRstrategy DevelopCSRcommitments ImplementCSRcommitments Verifyandreportonprogress Evaluateandimprove Source: Industry Canada, 2006 Table 8.2; page 159 of text 20 CorporatePhilanthropy: Definition Theeffortofbusinesstocontributetosociety socially,manifestedbydonationsofmoneyor goodsandservicesinkind,voluntarism (wherecorporateemployeesworkforsocial causes),andsponsorshipofeventsthat contributetosociety. 21 ArgumentsFor(andAgainst) CorporatePhilanthropy ArgumentsFOR: MeanstoexpressCSRtocommunity Promotesimageofgoodcitizenship Businessbenefitsfromvolunteersector Benefitsfromcorporatecommunityinvestmentprogram Companyssuccesslinkedtocommunityshealth ArgumentsAGAINST: Fundsgivenbelongtoshareholders Socialwelfareisthejobofgovernment Corporationmightbecomeaccountableforactionsofcharity Noguidelinesorstandardstomeasure,evaluate,ormonitor 22 corporategiving TrendsandConcernsin CorporateGiving Causerelatedmarketing:Thepurchaseofa particularproductresultsinadonationbeing madebyacorporationtoanonprofit organizationsprogram. Strategicgiving:Anattempttorationalizethe shareholderinterestswithcorporate philanthropywherebythecorporationbenefits directlyfromthefundsgiven. 23 CorporateVoluntarism Formsofsupport Corporatepoliciesregarding voluntarism Providingfacilities,allowingtimeoff, assistingwithpersonalexpensesincurred whileundertakingvoluntaryactivities, specialrecognitiontoemployees encouraging;enabling;andpromoting 24 CorporateSponsorship Apartnershipwhichhasbeen establishedformutualbenefitbetween abusinesssponsorandaneventora nonprofit. Examples:sports,cultural,and educationalevents,literacy,race relations,drugabuse,environmental issues,etc. 25 SocialVenturePhilanthropy Theinvestmentofhumanandfinancial resourcesbycorporationsinnonprofit communitydevelopmentagenciesto generateasocialreturninsteadofonly afinancialone. Alsoknownassocialventuring,thenew philanthropy,andhighengagement philanthropy. 26 SocialEnterprise Amodelofbusinessoperationwheresomeor allprofitsaredeliberatelyusedtofurther socialaims. Twotypes: (1)nonprofitenterprisesthatcontributeallprofitsto socialinitiatives(e.g.,membersofValueVillage ecosystem); (2)forprofitenterprisesthatdivideprofitsbetween socialinitiativesandshareholders(e.g.,TheBody Shop) 27 SocialEntrepreneurship Aninnovative,visionaryleaderofanon profitwithrealworldproblemsolving creativityandahighawarenessof ethicalconsiderations. Alsoreferredtoasphilanthrocapitalism. 28 SmallBusinessandCSR Challenges: Typicalissuesforsmallbusiness: Entrepreneursdonothavetime Expensesinvolved LackofknowledgeofCSRplanning undergroundeconomy;misleadingadvertisingand financialreporting;impropergiftgivingand receiving;taxevasion;nepotism. 29 ContemporaryCSR: InvestmentandInvolvement Communityinvestment:Theeffortsofacorporation tohelpdevelopacommunityandcreateeconomic opportunitiesthroughavarietyofmeans,from donationstodirectinvolvementincommercial undertakings. Motivationmaybebasedon:religiousprinciples; makingadifferenceinsociety;personalexperience; givingsomethingback;andselfinterest(e.g.,tax incentivesandrecognition) 30
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