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Corporate Social Responsibility and Labor issues. ACE 387: Spring 2006. Topics for today’s class. Corporate Social Responsibility Labor issues Women workers Child Labor Sweatshops Efforts to Monitor and Correct Labor Abuses Part 3 Assignment . Corporate Social Responsibility.

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topics for today s class
Topics for today’s class
  • Corporate Social Responsibility
  • Labor issues
    • Women workers
    • Child Labor
    • Sweatshops
    • Efforts to Monitor and Correct Labor Abuses
  • Part 3 Assignment

ACE 387

corporate social responsibility
Corporate Social Responsibility
  • Explore the notion of corporate social responsibility
  • What is this?
  • Is it a legitimate concern of business?

ACE 387

what is business social responsibility
What is Business Social Responsibility?
  • Should business be involved in solving all of society’s problems
  • Should it specialize in only some problems? If so which problems?
  • Is the primary responsibility of business to stockholders ?
  • Should most profits be diverted to socially responsible activities?

ACE 387

corporate social responsibility csr and ethics
Corporate Social Responsibility (CSR) and Ethics
  • Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society.
  • In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done.“
  • Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior

ACE 387


Do more than required; e.g. engage in philanthropic giving

Integrate social objectives and business goals

Fight social responsibility initiatives

Maximize firm’s profits to the exclusion of all else

Balance profits and social objectives

Do what it takes to make a profit; skirt the law; fly below social radar

Lead the industry and other businesses with best practices

Comply; do what is legally required

Articulate social value objectives

ACE 387

principle of public responsibility
Principle of Public Responsibility
  • Use Public Policy as a guide
  • What do you think of this?

ACE 387

should business act in a socially responsible manner
Should Business Act in A Socially Responsible Manner?
  • Milton Freidman - Its the social responsibility of business to increase its profits
  • What do you think?

ACE 387

the pyramid of corporate social responsibility
The Pyramid of Corporate Social Responsibility

Source: Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,” adaptation of Figure 3, p. 42. Reprinted from Business Horizons, July/Aug. 1991. Copyright © 1991 by the Foundation for the School of Business at Indiana University. Used with permission.

ACE 387

determinants of the level of social responsibility
Determinants of the Level of Social Responsibility
  • Multiple Organizational Goals
  • Stakeholder Interests
  • Management Philosophy Organizational Culture
  • Corporate Governance

ACE 387

levels of social responsibility
Levels of Social Responsibility

1. Social Obligation

  • Meet minimum regulations, do what is required by law, no more

2. Social Responsibility

  • Go beyond what is required by law, mitigate negative effects

3. Social Responsiveness

  • Proactive approach, promote positive change

ACE 387

social responsibility issues
Social Responsibility Issues
  • Green Marketing
    • The specific development, pricing, promotion, and distribution of products that do not harm the natural environment
  • Green Marketing Goals
    • Eliminate the concept of waste
    • Reinvent the concept of a product
    • Make prices reflect actual and environmental costs
    • Make environmentalism profitable

ACE 387

will consumers pay an extra 25 gallon to reduce pollution and global warming
Will Consumers Pay an Extra 25¢/Gallon to Reduce Pollution and Global Warming?

Source: “Americans Split on Paying Higher Prices to Reduce Pollution,” USA Today, September 4, 2001, p. A1. Used with permission

ACE 387

importance of company reputation to consumers today versus five years ago
Importance of Company Reputation to Consumers Today Versus Five Years Ago

Source: “Watch What You Say,” American Demographics, July 2000, p. 24.

ACE 387

Reasons for Businesses to engage in development of a Global Code of Business Ethics and Social Responsibility
  • Create the same opportunity for all businesses if there are common rules
  • Level the playing field
  • They are needed in an interconnected world
  • They reduce operating uncertainties
  • If businesses don’t collaborate, they may not like what others develop

ACE 387

labor issues dickerson chapter 5
Labor Issues(Dickerson Chapter 5)
  • Women workers
  • Child Labor
  • Sweatshops
  • Efforts to Monitor and Correct Labor Abuses
  • Labor Standards and Trade

ACE 387

labor issues
Labor Issues
  • Why are there labor issues?
    • Competition to keep costs down so abuses possible
    • Differing cultural factors that in combination can create abuse
  • Could the industry have developed without the abuses?

- Remember that in the US and England, when the industry began there were also similar abuses - sweatshops, child labor

ACE 387

women workers
Women Workers
  • T&A employ largely women in both developed and developing world.
    • 80-90% of global apparel workforce is female.
    • 50% of textile workforce is female.
  • Global industry change affects women.
    • Developed nations: become unemployed
    • Developing nation: young women get jobs in export processing zone with low wages, long hours, severe working conditions or make their own operation through sub-contracting.

ACE 387

child labors
Child Labors
  • Child labor were common practice during industrialization age.
  • Cheapest source of available labor is “children”.
  • In developing world, child labor is pretty common. The countries do not have enough schools to accommodate children.
  • Lack of alternative for child workers in poor countries.
  • Sweatshops

ACE 387

  • Defined by the U.S. General Accounting office as a business that regularly violates both wages or child labor and safety or health laws.
  • Corporate greed and global competition to produce goods at the lowest possible price are the main reasons for the existence of sweatshops.
  • It's much more cost-effective for corporations to subcontract to suppliers who produce goods cheaply by minimizing worker salaries and benefits, skimping on factory and dormitory upkeep and standards, and demanding high levels of productivity (long hours and big quotas) from their workers.

ACE 387

question sweatshops
Question: Sweatshops

Q: Isn't the low-wage employment offered by sweatshops better than not being employed at all? Don't sweatshops help poor people climb out of poverty?

A: No. Sweatshop workers and child laborers are trapped in a cycle of exploitation that rarely improves their economic situation.

ACE 387

question sweatshops22
Question: Sweatshops

Q: Should I boycott manufacturers that use sweatshop labor, or should I pressure companies to change?

A: You can do both. In general, boycotts are most effective when organized by the workers themselves.

ACE 387