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BA 385 Corporate Social Responsibility: The Many Meanings of CSR PowerPoint PPT Presentation

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BA 385 Corporate Social Responsibility: The Many Meanings of CSR. Chapter Two: Corporate Citizenship: Social Responsibility, Responsiveness and Performance. The Pullman Story. The Pullman Town Should business demonstrate concern for societal welfare?.

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BA 385 Corporate Social Responsibility: The Many Meanings of CSR

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BA 385

Corporate Social Responsibility: The Many Meanings of CSR

Chapter Two: Corporate Citizenship: Social

Responsibility, Responsiveness and Performance

The Pullman Story

  • The Pullman Town

    Should business demonstrate concern for societal welfare?

The impact of a company’s actions on society.

Requires the individual to consider his/her acts in terms of a wholesocial system, and holds him/her responsible for the effects of actsanywhere in that system.

CorporateSocial Responsibility

Corporate Social Responsibility (CSR)

The Gap, Inc. Social Responsibility Page

Corporate Social…



obligation, accountability


action, activity


outcomes, results

Corporate Citizenship Concepts

McDonald’s and CSR

Factors in the Societal Environment

Criticism of Business

Increased Concernfor the Social Environment

A Changed Social Contract

Business Assumption ofCorporate Social Responsibility

Social Responsiveness, Social Performance, and Corporate Citizenship

A More Satisfied Society

Fewer Factors Leading toBusiness Criticism

Increased ExpectationsLeading to More Criticism

Business Criticism/Social Responsibility Cycle

Legal Model

Laws developed to constrain business

Social Model

Stakeholder expectations heightened

Historical Perspective on CSR

Economic Model

Society determines wants/needs through the marketplace


Community obligations


Motivation: Keep government at arm’s length

Modification of the Economic Model

Acceptance and Broadening of Meaning

From the 1950’s to the present, the concept of CSR has gained considerable acceptance and the meaning has been broadened to include specific issues, such as:

CSR: Evolving Viewpoints

Definitions Over Time

  • CSR considers the impact of the company’s actions on society. --Bauer

  • 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

CSR: Evolving Viewpoints

More Definitions Over Time

  • CSR mandates that the corporation has not only economic and legal obligations, but also certain responsibilities to society which extend beyond these obligations. --McGuire

CSR: Evolving Viewpoints

Even More Definitions Over Time

  • 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

Carroll’s Four-Part Definition of CSR – The Big One, The “King” of All CSR Definitions

  • The social responsibility of business encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time.

Understanding the Four Components













Obey laws and regulations

Do what is right, fair, and just

Be a good corporate citizen

Be profitable. Maximize sales, minimize costs

Carroll’s Four-Part Definition of CSR

Philanthropic ResponsibilitiesBe a good corporate citizen.

Ethical ResponsibilitiesBe ethical.

Legal ResponsibilitiesObey the law.

Economic ResponsibilitiesBe profitable.

The Pyramid of CSR

Restricts the free market goal of profit maximization

Business is not equipped to handle social activities

Dilutes the primary aim of business

Increase business power

Limits the ability to compete in a global marketplace

Arguments Against CSR

Addresses social issues business caused and allows business to be part of the solution

Protects business self-interest

Limits future government intervention

Addresses issues by using business resources and expertise

Addresses issues by being proactive

Arguments For CSR

Defensive approach

Cost-benefit approach

Strategic approach

Innovation and learning approach

Ways Firms Respond to CSR Pressure

Alleviates pain – do what it takes to avoid problems

Only do things for which you identify direct benefit

Recognize changing environment and engage CSR as strategy

CSR involvement provides new opportunities for learning and understanding the marketplace and this brings competitive advantage.

The Civil Corporation, Simon Zadek

Corporate Responsibility in the 21st Century

1000 Global Business Leaders surveyed in 2000 said the following will be necessary for 21st century companies:

  • Demonstrate a commitment to society’s values and contribute to society’s social, environmental, and economic goals through action.

  • Insulate society from the negative impacts of company operations, products and services.

  • Share benefits of company activities with key stakeholders as well as with shareholders.

  • Demonstrate that the company can make more money by doing the right thing.

TWO Alternative Views

Sethi’s Three-Stage Schema

Frederick’s CSR1, CSR2, and CSR3

Corporate Social Responsiveness

Sethi’s Three Stage Schema

Three ways to classify corporate behavior:

  • Social obligation – stage one: respond to market forces

    • Example: McDonald’s offers apples because parents complain

  • Social responsibility – stage two: bring behavior up to general norms of society

    • Example: McDonald’s gives out pedometers because “fit is in”

  • Social responsiveness – stage three: see below

    • Example: You tell me….

      Responsiveness suggests corporations be “anticipatory” and “preventive”.

      Obligation and responsibility alone are not enough.

      The final stage in CSR is business taking a long-term role in the social context in which it operates.

Frederick’s CSR1, CSR2 and CSR3

  • CSR1– corporate social responsibility

    • Example: We acknowledge many families dine regularly at McD’s. We have an obligation to offer some options that are healthier.

  • CSR2 – corporate social responsiveness

    • Capacity to respond to social pressures

    • Literal act of responding or being poised to respond

      • Example: We offer tasty sliced apples as an alternative to fries (response) because we already have apple suppliers for our pies (capacity).

  • CSR3 – corporate social rectitude

    • The moral correctness of the actions taken

      • Example: You tell me….

  • Corporate Social Performance (CSP)

    Carroll’s Corporate Social Performance Model – 3D

    Plane One: Social Responsibility:

    economic, legal, ethical and discretionary/philanthropic

    Plane Two: Philosophy of Social Responsiveness (or mode of responding):

    reaction, defense, accommodation and proaction

    Plane Three: Stakeholder Issues Involved: consumers, environment, community, government, employees, etc.

    Corporate Citizenship…

    …embraces all the facets of corporate social responsibility, responsiveness, and performance.

    …embraces the functions of business interaction with nonprofit organizations, citizen groups, and other community stakeholders.

    Corporate Citizenship

    Research-based Benefits of Good Corporate Citizenship

    • Improved employee relations

    • Improved customer relations

    • Improved business performance

    • Enhanced company’s marketing efforts

    Perspective 1: CSP Drives the Relationship

    Good CorporateSocial Performance

    Good CorporateFinancialPerformance

    Good CorporateReputation

    Perspective 2: CFP Drives the Relationship

    Good CorporateFinancialPerformance

    Good CorporateSocial Performance

    Good CorporateReputation

    Perspective 3: Interactive Relationship Among CSP, CFP, and CR

    Good CorporateSocial Performance

    Good CorporateFinancialPerformance

    Good CorporateReputation

    Social and Financial Performance

    Owner Stakeholders’ “Bottom Line”

    Consumer Stakeholders’ “Bottom Line”

    Corporate Social Performance

    Employee Stakeholders’“Bottom Line”

    Community Stakeholders’“Bottom Line”

    Other Stakeholders’ “Bottom Line”

    A Multiple Bottom-Line Perspectiveeconomic, social, environmental, other?

    A technique used to screen firms for socially-responsible investment purposes

    Social Screening

    Socially Responsible or Ethical Investing

    Portfolio 21: Global Fund using Sustainability SRI (socially responsible investing) Principles

    More reliable research on CSP (corporate social performance)

    Investment firms using social criteria have solid track record

    The socially conscious 1960s generation is making investment decisions

    Reasons for Upsurge in Socially Responsible Investing

    For Next Class (1/28)

    • Read chapters three and six

    • Complete and Hand-In Best Practices Report Assignment by start of class

    • Read online or print newspaper(s) of choice to find stories of businesses challenged by issues relating to CSR

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