1. Corporate Social Responsibility
A corporation should be held accountable for any of its actions that affect people, their communities, and their environment.
Requires companies to balance the benefits to be gained against the costs of achieving those benefits.
Iron Law of Responsibility:
In the long run, those who do not use power in ways society considers responsible will lose it.

2. Foundation principles of corporate social responsibility
Figure 3.1
Foundation principles of
corporate social responsibility
Charity Principle
Stewardship Principle
Definition
Business should give voluntary aid to society’s needy persons and groups
Business, acting as a public trustee, should consider the interests of all who are affected by business decisions and policies
Type of Activity
--Corporate philanthropy
--Voluntary actions to promote the social good
--Acknowledging business and society interdependence
--Balancing the interests and needs of many diverse groups in society
Examples
--Corporate philanthropic foundations
--Private initiatives to solve social problems
--Social partnerships with needy groups
--Enlightened self-interest
--Meeting legal requirements
--Stakeholder approach to corporate strategic planning

3. Arguments for Corporate Social Arguments against Corporate Social
Figure 3.3
The pros and cons of
corporate social responsibility
Arguments for Corporate Social
Responsibility
Balances corporate power with responsibility.
Discourages government regulation.
Promotes long-term profits for business.
Improves business value and reputation.
Corrects social problems caused by business.
Arguments against Corporate Social
Responsibility
Lowers economic efficiency and profit.
Imposes unequal costs among competitors.
Imposes hidden costs passed on to stakeholders.
Requires social skills business may lack.
Places responsibility on business rather than individuals. .

4. “Should Companies Care?”
Colvin asserts companies today are doing more of what corporate-citizenship activists want than they have ever done before, because they’re listening to markets
Product-market decisions by consumers
Labor-market decisions by employees
Q: To what extent do consumers or employees make decisions based on corporate social responsibility?
Source: Fortune, 6/11/01

5. Two views of corporate social
responsibility
The shareholder view
The only social responsibility of business is to create shareholder wealth legally and with integrity.
Corporate management cannot decide what is in the social interest.
The costs of social responsibility which do not increase the value of stock, will be passed on to consumers by way of higher prices, or to employees as lower wages, or to shareholders as lower returns.
The multiple stakeholders view
All customers and employees are treated with dignity.
Investor trust must be honored.
Relationships with suppliers must be based on mutual respect.
Belief in fair economic competition.
Business can contribute to social reform and honor human rights.

6. Evolving Phases of Corporate Social Responsibility
Figure 3.5