Week 6 Winter 08 - Social Context of Business Week 6...

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Social Context of Business Week 6 Shareholder and Stakeholder Models Corporate Social Responsibility Stakeholder Approach Text Reference: Chapters 2, 3
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2 Corporate Social Responsibility Definitions of CSR To understand the impact of a company’s actions on society Demands that management be responsible for their acts and consider these actions as part of the social system
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3 What exactly is Corporate Social Responsibility ”? The degree of moral obligation that may be ascribed to corporations beyond simple obedience to the laws of state (Kilcullen & Kooistra, 1999). An organization’s obligation to maximize its positive impact and minimize its negative effects in being a contributing member to society, with concerns for society’s long-run needs and wants. CSR means being a good steward of society’s economic and human resources (Journal of Consumer Marketing, 2001) The intelligent and objective concern for the welfare of society that restrains individual and corporate behaviour from ultimately destructive activities, no matter how immediately profitable, and leads in the direction of positive contributions to human betterment, variously as the latter may be defined (Andrews, quoted in Hartman, 1998, Perspectives in Business Ethics)
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4 The Boundaries of Strategic Corporate Social Responsibility ( Geoffrey Lantos, from Journal of Consumer Marketing, Vol.18, No. 7, 2001) Corporate Social Responsibility stems from the “Corporate Social Contract” The Corporate Social Contract Doctrine holds that: Business and society are equal partners, each enjoying a set of rights and having reciprocal responsibilities Companies must be held to higher standards than mere individuals Firms should be responsive to society’s long-run needs and wants, optimizing the positive effects and minimizing the negative effects of its actions on society
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5 The Boundaries of Strategic Corporate Social Responsibility ( Geoffrey Lantos, from Journal of Consumer Marketing, Vol.18, No. 7, 2001) Ethical CSR Avoiding societal harms (obligatory) Altruistic (or Humanitarian) CSR Doing good works at possible expense to shareholders (not legitimate) Strategic CSR Good works that are also good for business
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6 The Boundaries of Strategic Corporate Social Responsibility ( Geoffrey Lantos, from Journal of Consumer Marketing, Vol.18, No. 7, 2001) Ethical CSR Any organization not adhering to its ethical responsibilities would be acting as a morally irresponsible agent Managers of a corporation do not have an obligation to maximize profits for shareholders without regard to the means used
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7 The Boundaries of Strategic Corporate Social Responsibility ( Geoffrey Lantos, from Journal of Consumer Marketing, Vol.18, No. 7, 2001) Altruistic/Humanitarian CSR Genuine “optional” caring Be a good corporate citizen by giving back to society regardless of whether the firm will recognize any gain Based on capability responsibility – the company has the resources to be able to do social good
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