Corporate Social Responsibility BOH4M

Learning Goals 8. I will be able to explain what Corporate Social Responsibility (CSR) is and its key issues. 9. I will be able to describe what and who are stakeholders 10. I will be able to explain why companies are socially responsible and the consequences of CSR. 11. I will be able to explain the 2 principles of CSR (charity and stewardship)

What is CSR ? – Fill in questions https://www.youtube.com/watch?v=BLUu262pmxU What is CSR? Before CSR, what was the main goal of a company? Why is it annoying that she is drinking coke? Which company do you think is more socially responsible? Why? How do customer’s feel toward companies who are involved in CSR? Do their opinions match their buying trends?

The Positives Good things businesses do? Meet our needs/wants Generate wealth Create jobs Innovate

The Negatives Bad things businesses do? Pollution Sweatshops/child labour Fraud Consumerism

Key Issues in CSR Labour rights: child labour forced labour right to organize safety and health Environmental conditions water & air emissions climate change Human rights cooperation with paramilitary forces complicity in extra-judicial killings (someone killed by the government without legal process) Poverty Alleviation job creation public revenues skills and technology

LG 9: Stakeholders Who is affected by the actions of a business?

Stakeholders Stakeholders are groups or individuals with an interest in a business. Stakeholders may affect or be affected by the decisions of an organisation. Examples of stakeholders include: Owners/shareholders Employees Customers Local community

Internal stakeholders

Internal stakeholders Internal stakeholders are those that are considered to be part of an organisation. The main internal stakeholders are: Shareholders/owners Employees

Shareholders Shareholders: own a part of a business do not get involved in the day-to-day running of the business have a right to vote at the company’s AGM receive a share of the profits – this is called a dividend

Shareholder interests Each stakeholder group will have its own expectations of the business. Shareholders are likely to have an interest in: Increased profits and hence dividends through such things as: Growth Enhanced reputation Greater efficiency

Employee interests Employees are likely to expect: fair pay decent working conditions job security access to training for additional qualifications

Manager interests In addition to the usual employee interests, managers may expect to be able to make their own decisions and have the opportunity of promotion

External Stakeholders

External stakeholders External stakeholders are outside an organisation. The main external stakeholders are: Customers Government Suppliers The local community

Customer expectations Customers are likely to expect such things as: a product range that meets their needs value for money good quality products and customer service a ready supply of goods and services And possibly: ecologically sound/sustainable products

Government interests The government has an interest in businesses because: it receives taxes from business profits, employee incomes and customer purchases businesses provide jobs and therefore employment levels and benefits payments are affected the economy is dependent on the operations of business it has a range of legislation and regulations that businesses must comply with

Supplier expectations Suppliers may provide a range of services to businesses, as well as raw materials and finished goods. Suppliers may expect: to be paid in a timely fashion to receive regular orders

Local community The local community may have expectations about a company regarding: the availability of jobs the level of pollution and congestion created the support provided by a business regarding community projects and concerns

Business expectations of stakeholders Different stakeholders have their own interests and expectations of a firm, however, the business will also have expectations of the stakeholders e.g. suppliers may be expected to comply with ethical and environmental guidelines set down by the business.

How could CSR policies meet stakeholder interest How could CSR policies meet stakeholder interest? How could they go against stakeholder interest? Kellogg's Case Study

LG 10: Social Responsibility Related to “corporate citizenship” and business ethics Corporate social responsibility (CSR) means taking your duty to all stakeholders, especially the community as a whole, seriously

Social Responsibility Doing good things Donating goods, services, or money to charities Sponsoring public service ads Not doing bad things Being environmentally responsible Safe working conditions and fair wages Transparency and accountability

Why CSR? Owner(s) feel strongly about it Good publicity = good for business Tax deductions The right thing to do Companies should solve the problems they cause Ex: pollution Keeps the government out of business Increased market share

The case against CSR Improving the community should be the responsibility of the public sector Diminishes profit to owners/shareholders Makes business less competitive Increases costs A company’s social obligations are discharged when it pays taxes Businesses may exert too much influence over charitable causes Responses to these arguments?

Principles The Charity Principle The Stewardship Principle Two key principles are at the heart of CSR: The Charity Principle The Stewardship Principle

The Charity Principle The wealthy have a responsibility to the poor Corporations are large, powerful, and wealthy “citizens”, and should therefore take up social causes Stems from early 1900s American tycoons Andrew Carnegie and John D. Rockefeller who contributed large sums of money to charitable organizations

The Stewardship Principle When business executives think of themselves as trustees of society Company must ensure that society benefits from their actions, rather than being hurt by them Recognize that company is not a closed system – if affects (and is affected by) its environment Must balance the interests of multiple stakeholders

Fun Art Time - CSR Window Pane You must choose one company that you think demonstrates CSR You will receive a piece of paper. You need to split it into four sections. Section 1 will have your companies name and logo Section 2 will have a summarized version of your companies CSR policy Section 3 will have some of the policies that your companies uses to ensure ethics in the workplace. Any thoughts that you have about sections 2 and 3. Make it beautiful (lots of colour) as it will be going on the wall!

Learning Goals 8. I will be able to explain what Corporate Social Responsibility (CSR) is and its key issues. 9. I will be able to describe what and who are stakeholders 10. I will be able to explain why companies are socially responsible and the consequences of CSR. 11. I will be able to explain the 2 principles of CSR (charity and stewardship)

Nike Video (20 min) http://www.youtube.com/watch?v=M5uYCWVfuPQ&feature=c4-overview&list=UUnkiZ7W-zCpYOp41UVul5rA Based on this video do you think Nike is being socially responsible? Why or why not? Do you think it’s socially responsible to form an opinion based on one video? Why or why not? Do you think it’s ethical to produce a video with such a heavy bias? Why or why not?

Honest Tea http://www.youtube.com/watch?v=cDndc2iNz58 How is this company different from Nike? What are fair trade products? Why should people purchase fair trade products? What is the problem with fair trade products? Why do you think companies like Nike do not use the fair trade model?

Learning Goals 8. I will be able to explain what Corporate Social Responsibility (CSR) is and its key issues. 9. I will be able to describe what and who are stakeholders 10. I will be able to explain why companies are socially responsible and the consequences of CSR. 11. I will be able to explain the 2 principles of CSR (charity and stewardship)