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Corporate Responsibility and Society MNGT 5990 . Fall 2013 - Shanghai , PRC Robert Serben, Ph.D. Week 8- Review for Final Examination Essential CSR Concepts and Principles. Composition of final exam. CSR. “Corporate social responsibility”

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corporate responsibility and society mngt 5990

Corporate Responsibility and SocietyMNGT 5990

Fall 2013 - Shanghai, PRC

Robert Serben, Ph.D.

Week 8- Review for Final Examination

Essential CSR Concepts and Principles

slide3
CSR

“Corporate social responsibility”

A collection of evolving terms, concepts, theories, and practices to describe one essential idea:

  • That business has the responsibility to do more than comply with the minimum requirements of law and the generation of a profit for its owners.

Corporate Social Responsibililty

true or false
True or False
  • Only at large companies do successful CSR strategies take into account the perspectives of stakeholders.

MNGT 5990 Corporate Responsibility and Society

f undamental csr points
Fundamental CSR points

Business does not exist in a vacuum

The environment surrounding business is always changing

CSR takes a longer term view of success

Shareholders are not always the most important stakeholders

Corporate Social Responsibililty

shareholders
Shareholders
  • “…the average holding period for stocks has dropped from five years in the mid-1970s to six months today. People aren’t investing in your company; they’re investing in your stock.” – Class text, p.44

Corporate Social Responsibility

csr programs examples
CSR programs - Examples

Corporate Social Responsibililty

strategic csr
Strategic CSR
  • Strengthening the strategic capabilities of the organization
    • Activities supportive of unique business needs
    • A balanced relationship among stakeholders
  • Adaptable to changing conditions
  • Medium to long term view

Corporate Social Responsibililty

three arguments for csr
Three arguments for CSR
  • Moral argument:
    • Successful operations reflects the values of the larger society
  • Rational argument:
    • Maximize performance by minimizing restrictions
  • Economic argument:
    • Reflects concerns of stakeholders over medium to longer term

Corporate Social Responsibililty

csr relevancy
CSR relevancy
  • Five trends that seemingly will grow throughout the 21st century:
  • Growing affluence
  • Ecological sustainability
  • Globalization
  • Free flow of information
  • Brands

Corporate Social Responsibililty

the growing role of affluence
The growing role of affluence
  • Affluence (one of the five emerging trends) promotes corporate social responsibilitybecause affluent customers can and do make choices about product purchases based on company/brand reputation or image.

Corporate Social Responsibililty

csr relevancy1
CSR relevancy

Five mega - issues

Five demanding stakeholders

“Green" consumers

Activist shareholders

Civil society / NGOs

Governments and regulators

Financial sector

  • Climate change
  • Pollution / health
  • Globalization backlash
  • The energy crunch
  • Erosion of trust

http://www.greenbiz.com/news/2005/10/23/balanced-scorecard-and-corporate-social-responsibility-aligning-values-profit

Corporate Social Responsibility

an important question
An important question
  • How to find socially responsible action that is strategic?
    • Both Prahalad and Porter: focus on areas of expertise and relevance to the organization.

Corporate Social Responsibility

strategic planning csr inclusion
Strategic planning: CSR inclusion

Central component of strategic CSR:

Focus on “areas of social concern that extend beyond profit maximization, but that are related to the businesses core operations.”

  • Class text. Pages 39 & 40.

Corporate Social Responsibility

stakeholders
Stakeholders
  • “… any group or individual who can affect is affected by the achievement of the organization’s objectives.”

Glossary of Terms. Class text. P.xiii

Corporate Social Responsibility

s takeholder groups p 35
Stakeholder groups ( p.35)

Globalization: Dynamic force

Customers, competitors, creditors, distributors, suppliers

2. Economicstakeholders

Government/regulators, communities nonprofits, environment

3. Societalstakeholders

1. Organizationalstakeholders

Employees, managers, stockholders

Technology: Dynamic Force

Corporate Social Responsibility

benefits
Benefits
  • “Six Reasons Companies Should Embrace CSR”
    • Innovation
    • Cost savings
    • Brand differentiation
    • Long-term thinking
    • Customer engagement
    • Employee engagement
      • James Epstein-Reeves. Forbes Magazine.
      • Found at: http://www.forbes.com/sites/csr/2012/02/21/six-reasons-companies-should-embrace-csr

Corporate Social Responsibility

csr reporting
CSR Reporting

With regard to communicating about the performance of a CSR program, a survey of business businesses showed:

  • 67% had scorecards, 100% of those scorecards set future targets
  • 83% used the term “sustainability”
        • P.48. CSR Trends 2010. PricewaterhousCooper LLP.

Corporate Social Responsibility

milton friedman
Milton Friedman
  • Published in 1970 – rational argument
  • “Business has a social purpose” talk is illogical
  • Logically, business is only responsible to its owners to:
    • Make as much money as possible
    • Conform to the basic rules of society (law, custom, and ethics)
charles handy
Charles Handy
  • Published in 2002. Moral argument:
    • “The purpose of a business …is not to make a profit. It is to make a profit…to do something more or better.”
  • Three points
    • Focus on stock price and ownership can distort the business culture
    • Shareholders are rarely owners
    • Intellectual capital is as important as financial capital
s csr
SCSR
  • Business does a better job in reacting to CSR concerns rather than initiating them.
  • Stakeholders need to care and to act for socially responsible action.
  • True responsibility for initiating social responsible action is shared among stakeholders.
sustainability
Sustainability
  • Definition - “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
        • Gro Harlem Bruntland. 1987 Bruntland Report

MNGT 5990. Corporate Responsibility and Society

green washing
“Green washing”
  • An abuse of CSR
  • Definition:
    • The act of misleading consumers regarding the environmental practices of the company or the environmental benefits of a product or service. (p.109)

MNGT 5990. Corporate Responsibility and Society

two statements true or false
Two statements - True or False
  • Apple (maker of the Iphone and Ipad) is a highly successful, global business.
  • However, Apple does a poor job in measuring its effectiveness in meeting its CSR goals.

MNGT 5990. Corporate Responsibility and Society

apple an example of csr measurement
Apple – an example of CSR measurement

http://www.apple.com/environment/our-footprint/

MNGT 5990. Corporate Responsibility and Society

two statements true or false1
Two statements - True or False
  • Outcomes – stakeholders want to see what they’re getting
  • Philanthropists and donors increasingly want to see what they're getting

MNGT 5990. Corporate Responsibility and Society

true or false1
True or False
  • It is impossible to analyze and rate a CSR program’s general structure

MNGT 5990. Corporate Responsibility and Society

it is possible to analyze and rate a csr program s general structure
It is possible to analyze and rate a CSR program’s general structure

MNGT 5990. Corporate Responsibility and Society

middle management an important role
Middle management – an important role

1. Translating strategy into action.

2. Managing competing pressures

MNGT 5990 Corporate Responsibility and Society

slide30

End of review

MNGT 5990 Corporate Responsibility and Society