1. Archie B. Carroll Ann K. Buchholtz
Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition
Archie B. Carroll
Ann K. Buchholtz
© 2012 South-Western, a part of Cengage Learning

2. © 2012 South-Western, a part of Cengage Learning
Chapter 2 Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
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3. © 2012 South-Western, a part of Cengage Learning
Learning Outcomes
Explain how corporate social responsibility (CSR) evolved and now encompasses economic, legal, ethical, and philanthropic components.
Provide business examples of CSR and corporate citizenship.
Differentiate between corporate citizenship, social responsibility, responsiveness, and performance.
Elaborate on the concept of corporate social performance (CSP).
Explain how corporate citizenship develops in stages in companies.
Describe the socially responsible investing movement.
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Chapter Outline
The Corporate Social Responsibility Concept
Arguments Against and For Corporate Social Responsibility
Corporate Social Responsiveness
Corporate Social Performance
Corporate Citizenship
Business’s Interest in Corporate Citizenship
Social Performance and Financial Performance Relationship
Socially Responsible or Ethical Investing
Summary
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Business Allegations
Little concern for the consumer
Cares nothing about the deteriorating social order
Has no concept of ethical behavior
Indifferent to the problems of minorities and the environment
What responsibility does business have to society?
Business for Social Responsibility (BSR) is a consulting firm and global business network helping organizations to develop sustainable business strategies and solutions.
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6. Corporate Social Responsibility
Seriously considering the impact of a company’s actions on society.
Requires the individual to consider his or her acts in terms of a whole social system, and holds him or her responsible for the effects of his or her acts anywhere in that system.
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7. Business Criticism/Social Responsibility Cycle
Factors in the Societal Environment
Criticism of Business
Increased Concern for the Social Environment
A Changed Social Contract
Business Assumption of Corporate Social Responsibility
Social Responsiveness, Social Performance, and Corporate Citizenship
A More Satisfied Society
Fewer Factors Leading to Business Criticism
Increased Expectations Leading to More Criticism
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8. Corporate Citizenship Concepts
Corporate Social…
Responsibility
Performance
Responsiveness
Emphasizes…
obligation, accountability
outcomes, results
action, activity
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9. Historical Perspective on CSR
Economic Model
Legal Model
Social Model
Stakeholder Model
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10. Modification of the Economic Model
Philanthropy
Community obligations
Paternalism
Motivation: Keep government at arm’s length
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11. CSR’s Acceptance and Broadening of Meaning
From the 1950s to the present, the concept of CSR has gained acceptance.
The meaning has been broadened to include specific issues, such as:
Corporate governance
Product safety
Honesty in advertising
Employee rights
Affirmative action
Environmental sustainability
Ethical behavior
Global CSR
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12. Evolving Meanings of CSR
Corporate social responsibility is seriously considering the impact of the company’s actions on society.
The obligation of decision makers to take actions that protect and improve the welfare of society as a whole, along with their own interests.
Supposes that the corporation has economic and legal obligations as well as responsibilities to society that extend beyond these obligations.
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13. A Four-Part Definition of CSR
The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.
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14. The Four Components of CSR
Responsibility
Societal
Expectation
Examples
Economic
Required
Be profitable. Maximize sales, minimize costs.
Legal
Obey laws, adhere to regulations
Ethical
Expected
Avoid questionable practices. Do what is right, fair, and just
Philanthropic
Desired/ Expected
Be a good corporate citizen. Give back.
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15. The Pyramid of CSR
Philanthropic Responsibilities Be a good corporate citizen.
Ethical Responsibilities Be ethical.
Legal Responsibilities Obey the law.
Economic Responsibilities Be profitable.
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16. The CSR Equation = + + + Total Corporate CSR
Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities
Philanthropic Responsibilities =
Total Corporate CSR + + +
A stakeholder perspective focuses on the CSR
pyramid as a unified whole.
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Arguments Against CSR
The classical economic view that business’ only goal is the maximize profits for owners.
Business is not equipped to handle social activities.
It dilutes the primary purpose of business.
Businesses have too much power already .
It limits the ability to compete in a global marketplace.
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Arguments For CSR
It addresses social issues brought on by business, and allows business to be part of the solution.
Enlightened self-interest: businesses must take actions to ensure long-term viability.
Wards off future government intervention.
It addresses issues by using business resources and expertise.
It addresses issues by being proactive.
The public supports CSR.
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19. Ways Firms Respond to CSR Pressure
Cost-benefit approach
Strategic approach
Innovation and learning approach
Defensive approach
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20. Corporate Social Responsiveness
An action-oriented variant of CSR.
Responsibility
Implies a state or condition of having assumed an obligation.
Responsiveness
Connotes a dynamic, action-oriented condition.
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21. Corporate Social Responsiveness
Alternative Views
Sethi’s Three-Stage Schema
Social obligation, social responsibility, and social responsiveness.
Frederick’s CSR1, CSR2, and CSR3
CSR1 is accountability-focused.
CSR2 is responsibility-focused.
CSR3 refers to corporate social rectitude.
Epstein’s Process View
Emphasizes the process of social responsiveness.
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22. Carroll’s Corporate Social Performance Model
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Corporate Social Performance: Extensions, Reformulations, Reorientations
Wartick and Cochran’s CSP Extensions
Wood’s Reformulated CSP Model
Swanson’s Reorientation of CSP
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24. Wartick and Cochran’s Corporate Social Performance Model Extensions
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25. Corporate Citizenship
Embraces all the facets of corporate social responsibility, responsiveness, and performance.
Serves a variety of stakeholders.
Companies have certain responsibilities that they must fulfill in order to be perceived as good corporate citizens.
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26. Corporate Citizenship (continued)
Broad View
A reflection of shared moral and ethical principles.
A vehicle for integrating individuals into the communities in which they work.
A form of enlightened self-interest that balances stakeholders’ claims and enhances a company’s long-term value.
Narrow View
Corporate community relations
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27. The Drivers of Corporate Citizenship
Internal Motivators
External Pressures
Traditions and values
Customers and consumers
Reputation and image
Expectations in the communities
Business strategy
Laws and political pressures
Recruiting and retaining employees
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28. Benefits of Corporate Citizenship
Improved employee relations
Improved customer relationships
Improved business performance
Enhanced marketing efforts
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29. Stages of Corporate Citizenship
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30. Development Challenges That Trigger Movement of Corporate Citizenship
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31. Global Corporate Citizenship
Multinational enterprises are expected to be good corporate citizens in the countries in which they do business.
Are expected to tailor their initiatives to conform to the cultural environment.
International academics and business people do research on and advocate CSR and corporate citizenship concepts.
Convergence in global CSR approaches will continue as the world economic stage becomes the common environment within which businesses function.
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32. Business’ Interest in Corporate Citizenship
Non-academic research
Fortune's ranking of “Most Admired” and “Least Admired” corporations
Conference Board’s Ron Brown Award for Corporate Leadership
CRO Magazine Awards
Chamber of Commerce of the U.S. Corporate Citizenship Awards
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33. Social and Financial Performance Relationship
Perspective 1: CSP Drives the Relationship
Perspective 2: CFP Drives the Relationship
Perspective 3: Interactive Relationship Among CSP, CFP, and CR
Good Corporate Reputation
Good Corporate Social Performance
Good Corporate Financial Performance
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34. Stakeholder Bottom-Line Perspective
The view that a firm has multiple bottom lines that benefit for corporate social performance.
The impacts of benefits of social performance cannot be fully measured or appreciated by considering only the impact on the financial bottom line.
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35. Multiple Bottom Line Perspective
Consumer Stakeholders’ “Bottom Line”
Employee Stakeholders’ “Bottom Line”
Community Stakeholders’ “Bottom Line”
Owner Stakeholders’ “Bottom Line”
Other Stakeholders’ “Bottom Line”
Corporate Social Performance
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36. “Triple Bottom Line” Perspective
Key Spheres of Sustainability
Economic
Social
Environmental
Corporate sustainability is the goal.
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37. Socially Responsible or Ethical Investing
Emerged in the 1970s
Over $2.7 trillion in socially responsible investments in the U.S.
Social Screening
A technique used to screen firms for socially-responsible investment purposes.
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38. Reasons for the Upsurge in Socially Responsible Investing
More reliable research on CSP
Investment firms using social criteria have solid track record
The socially conscious 1960s generation is making investment decisions
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39. © 2012 South-Western, a part of Cengage Learning
Key Terms
Business for Social Responsibility
Corporate citizenship
Corporate social performance
Corporate social responsibility
Corporate social responsiveness
Corporate sustainability
Economic responsibilities
Ethical responsibilities
Global corporate citizenship
Paternalism
Performance
Philanthropic responsibilities
Philanthropy
Pyramid of CSR
Socially responsible or ethical investing
Stages of corporate citizenship
Sustainability
Triple Bottom Line
© 2012 South-Western, a part of Cengage Learning