Copyright © 2013 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 4 Corporate Social Responsibility Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4-2 Corporate Social Responsibility Actions of an organization that are targeted towards the achievement of a social benefit over and above maximizing profits for its shareholders and meeting all its legal obligations

4-3 Management without Conscience Instrumental approach: Perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs of their customers Social contract approach: Perspective that a corporation has an obligation to society over and above the expectations of its shareholders

4-4 Management by Inclusion Actions of corporations impact: Customers Employees Suppliers Communities Impacts Positive Negative

4-5 Management by Inclusion Going beyond generating profit attracts a lot of attention Alcohol manufacturers have a long-term perspective and spread awareness about drinking responsibly

4-6 The Driving Forces Behind CSR TransparencyKnowledge SustainabilityGlobalization The Failure of the Public Sector

4-7 The Driving Forces Behind CSR Corporations that choose CSR run the risk of creating adverse results Employees feel that they are working for an insincere organization Public sees little more than a token action concerned with publicity rather than community Organization does not perceive much benefit from CSR and so sees no need to develop the concept

4-8 Types of CSR Organizations pursue a defined sense of social conscience in managing financial responsibilities to shareholders, legal responsibilities to local community and society as a whole, and ethical responsibilities to do the right thing for all their stakeholders Ethical CSR Organizations take a philanthropic approach by underwriting specific initiatives to give back to the company’s local community or to designated national or international programs Philanthropic initiatives are authorized without concern for the corporation’s overall profitability Altruistic CSR Philanthropic activities targeted towards programs that will generate the most positive publicity for the organization, but runs the risk of being perceived as self-serving behavior on the part of the organization Strategic CSR

4-9 Carbon Footprint Total carbon dioxide emissions on an annual basis Carbon neutral - Way to off set damage being done to the environment through greenhouse gas emissions by purchasing credits from carbon-positive projects Kyoto Protocol - Requires developed nations to reduce their greenhouse gas emissions by funding projects in developing countries in return for carbon credits