© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Business 2e C ha p t e r 17 Managing Corporate Social Responsibility Globally

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LEARNING OBJECTIVES After studying this chapter, you should be able to: 1.Articulate a stakeholder view of the firm. 2.Apply the institution-based and resource-based views to analyze corporate social responsibility. 3.Participate in three leading debates concerning corporate social responsibility. 4.Draw implications for action.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate social responsibility (CSR) Consideration and response to issues beyond narrow economic, technical, and legal requirements to accomplish social benefits along with traditional economic gains which the firm seeks Stakeholder Any group or individual who can affect or is affected by the organization’s objectives

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. BIG PICTURE PERSPECTIVE A key goal for CSR is global sustainability global sustainability Ability to meet the needs of the present without compromising the ability of future generations to meet their needs around the world ? In your own words, is CSR important and why?

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PRIMARY AND SECONDARY STAKEHOLDERS Primary stakeholder groups Constituents on which the firm relies for its continuous survival and prosperity Secondary stakeholder groups Those who influence or affect, or are influenced/affected by, the corporation but are not engaged in transactions with the corporation and are not essential for its survival

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PRIMARY AND SECONDARY STAKEHOLDERS Triple bottom line Economic, social, and environmental performance that simultaneously satisfies economic, social, and environmental performance measures of all stakeholder groups

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FUNDAMENTAL DEBATE ON CSR As free markets spread around the world, the gap between the haves and have-nots has widened Even within developed economies the income gap between upper and lower echelons of society also has widened In addition new disasters and scandals often propel CSR to the forefront of public policy and management discussions

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INSTITUTIONS AND CSR Code of conduct (code of ethics) Set of written policies and standards outlining proper practices for the organization ? Can you name at least three key issues that you would address if you were writing a code of conduct for a firm?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. INSTITUTIONS AND CSR Reactive strategy Strategy that only responds to CSR causes when required by disasters and outcries Defensive strategy Strategy that focuses on regulatory compliance but with little actual commitment to CSR by top management

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. INSTITUTIONS AND CSR Proactive strategy Strategy that anticipates CSR and endeavors to do more than is required Accommodative strategy Strategy characterized by some support from top managers, who may view CSR as a worthwhile endeavor

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RESOURCES AND CSR Social issue participation Firms’ participation in social causes not directly related to the management of primary stakeholders

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. DOMESTIC VS OVERSEAS CSR When companies have enough resources, it would be nice to take care of domestic employees and communities However, when confronted with relentless pressures for cost cutting and restructuring, managers have to prioritize

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. RACE TO THE BOTTOM VS RACE TO THE TOP MNEs may have an incentive to shift pollution-intensive production to developing countries, where environmental standards may be lower To attract investment, developing countries may enter a “race to the bottom” by lowering (or at least not tightening) environmental standards and some may become “pollution havens

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ACTIVE VS INACTIVE CSR ENGAGEMENT OVERSEAS Increasingly MNEs are expected to actively engage in CSR MNEs that fail to do so are often criticized by NGOs

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.