Business & Society ETLW 302 Tara Ceranic Salinas, PhD

What responsibilities do businesses have with regard to: Local communities? The environment? Employees?

Iron Law of Responsibility: In the long run, those who do not use power in ways society considers responsible will lose it.

Legal requirements vs. CSR Laws and regulations are enacted to ensure socially responsible conduct by business Businesses that comply with the laws are meeting MINIMUM levels of CSR CSR is bringing corporate behavior up to a level where it is in congruence with currently prevailing social norms

Roots of CSR Turn of 20th century Corporations were being accused of being too big, powerful, anticompetitive, and antisocial Carnegie/Ford/Rockefeller Shift in 1920s again Community Chest movement

CSR pyramid

What about Corporate Responsibility? Ethical Values underpin…. approach to Corporate Responsibility doing things ethically doing ethical things Ethics Policy & Code CSR Programme 7

Are there different approaches? What is the right thing to do? UK/Europe USA The decision is ….. Values based Compliance with Rules Test question: Who deals with business conduct in the organisation? Risk Corporate Affairs Company Secretary Board committee HR, CR Internal audit Ethics Officer Legal dept Compliance 8

Forms of CSR

Forms of CSR Stewardship Principle: Timberland Charity Principle Shareholder view

CSR: All grown up Multiple stakeholder view! Philanthropy and community involvement: Sophisticated partnerships

(Microfinance Monitor: September 21, 2011) Who cares? Stakeholders! Especially in a down economy: consumers = risk averse Risk averse consumers are 50 percent more likely to agree that companies have a duty to be socially responsible and support the communities in which they operate (Microfinance Monitor: September 21, 2011)

How to do it well: The “sweet” spot Capability Imprudent Irresponsible Culture Strategy Idyllic

How does CSR get mismanaged? Oxfam: Behind the Brands Focuses on international food and beverage companies

CSR programs tend to focus on specific projects and NOT the root causes of hunger and poverty because companies lack adequate policies to guide their own supply chain operations. Good, but not great…

CSR ROI “You don’t do CSR for the sake of CSR. You do CSR as part of your reputation management strategy to drive business growth, customer loyalty, and employee alignment.” Only a few companies appear to get it right.

Companies with best CSR reputations Microsoft Google Disney BMW Apple 6. Daimler (Mercedes-Benz) 7. Volkswagen 8. Sony 9. Colgate-Palmolive 10. LEGO Group

Who do you see doing a good job with CSR?

Triple bottom line

CSR as for-profit foundation

Does it matter why they do it?