1. UNDERSTANDING CORPORATE SOCIAL RESPONSIBILITY
Chapter 1

2. Understanding corporate social responsibility
Learning objectives
Offer an explanation of the emergence of corporate social responsibility in relation to the evolving role of business in the society.
Reflect on the concept of corporate social responsibility, taking account of different definitions of the term.
Describe and assess a model of corporate social responsibility.
Identify and evaluate the key arguments for and against the concept of corporate social responsibility.
Critically discuss the concept of corporate citizenship.

3. Understanding corporate social responsibility
TOPICS
Emergence of corporate social responsibility
Defining corporate social responsibility
Carroll’s pyramid of corporate social responsibility
Arguments for and against corporate social responsibility
Social responsiveness and performance
Corporate citizenship

4. EMERGENCE OF CORPORATE SOCIAL RESPONSIBILITY
Understanding corporate social responsibility
EMERGENCE OF CORPORATE SOCIAL RESPONSIBILITY
Corporate social responsibility becomes a general concern for businesses
Legislation of many of the CSR issues that were considered in the 1960s
Renewed interest due to stakeholder pressure. CSR becomes a strategic issue
Modest attention to CSR in the 1980s and early 1990s
The first substantial publications on the role of business and society
1930s
1960s
1980s
1990s
2000-

5. Understanding corporate social responsibility
DEFINING CORPORATE SOCIAL RESPONSIBILITY
Has been defined as:
CSR refers to corporate behaviour that extent beyond the economic motives and legal requirements
The firm’s consideration of, and response, to, issues beyond the narrow economic, technical and legal requirements of the firm
Accommodation of corporate behaviour to society’s values and expectations
However, corporate social responsibility is context dependent and is generally agreed to be an ambiguous concept.

6. Understanding corporate social responsibility
DEFINING CORPORATE SOCIAL RESPONSIBILITY
Boundaries of corporate social responsibility:
How far can expectation of corporate social responsibility go?
Where should one draw the line between what is a reasonable requirement of corporate social responsibility and what is not?
Is corporate social responsibility a voluntary concept or is it a requirement for businesses to obtain a ‘licence to operate’?

7. Understanding corporate social responsibility
CARROLL’S PYRAMID OF CORPORATE SOCIAL RESPONSIBILITY

8. Understanding corporate social responsibility
CARROLL’S PYRAMID OF CORPORATE SOCIAL RESPONSIBILITY
Economic responsibilities: The primary responsibilities of companies is to produce goods and services in a way that is profitable to their owners.
Legal responsibilities: While assuming their fundamental economic role, companies are expected to comply with the laws and regulation that reflect society’s values and norms.
Ethical responsibilities: Businesses are also expected to abide by the ethical norms of society. They are more ambiguous than legal requirements and therefore more difficult for companies to anticipate and follow.
Philanthropic responsibilities: Business may engage in activities that go beyond the expectations of society, including volunteer work, sponsorship, and donations.

9. Lack of accountability The ‘Iron Law of Responsibility
Understanding corporate social responsibility
ARGUMENTS FOR AND AGAINST CORPORATE SOCIAL RESPONSIBILITY
Main areas of disagreement about the effects of corporate social responsibility on individual companies and society at large:
Profit maximisation
Resource fit
Lack of accountability
The ‘Iron Law of Responsibility

10. Understanding corporate social responsibility
ARGUMENTS FOR AND AGAINST CORPORATE SOCIAL RESPONSIBILITY
Arguments for CSR
CSR improves a firm’s performance, through goodwill, reputation, customer and employee satisfaction
Businesses has valuable resources to tackle societal problems, e.g. management talent and innovation
“Iron Law of Responsibility”. Businesses will lose their power if they do not act responsibly.
Arguments against CSR
CSR is a waste of resources
Businesses lack the specific knowledge to deal with societal problems
Businesses are accountable to shareholders not the public

11. Understanding corporate social responsibility
SOCIAL RESPONSIVENESS AND PERFORMANCE
SOCIAL RESPONSIVENESS
Re-active
Defensive
Accommodative
Proactive
McDonalds only started offering vegetarian burgers as a results of the “mad cow” health scare in mid-1990, which affected customer demand
Many tobacco companies have aggressively attempted to undermine the link between smoking and cancer
Many firms have ensured that there employment policies conform to the various protections required by EU legislation
Toyota’s hybrid fuel car “Prius” was not initially successful and hardly met its cost, but Toyota persisted in the belief that this was the future

12. Understanding corporate social responsibility
SOCIAL RESPONSIVENESS AND PERFORMANCE
Corporate social policies are formal statements or informal practices and ways of behaving that reflect organizational values and principles.
Social programmes concerns the allocation of corporate resources to some activity that the company view as social desirable
Social impact refer to the effects of corporate behaviour on society

13. Understanding corporate social responsibility
CORPORATE CITIZENSHIP
Two school of thoughts
Companies as individuals citizens
Companies as state-like providers
The individual citizen
The universal citizen
The corporate citizen
The business citizen
Social rights
Civil rights
Political rights

14. Understanding corporate social responsibility
CORPORATE CITIZENSHIP
Companies as individuals citizens

15. Understanding corporate social responsibility
CORPORATE CITIZENSHIP
Companies as state-like providers, and increasingly performing roles traditionally linked to governments
Social rights provide individuals with the freedom to realize their human potential and aims in life
Civil rights protect the individual against interference that makes them unable to enjoy their rights
Political rights enable people to participate in the political process and governance of society

16. Understanding corporate social responsibility
SUMMARY
CSR has developed in cycles
CSR may be defined at the attuning of corporate behaviour to societal norms and values
Carroll’s Pyramid model of responsibilities, highlights the four responsibilities of a firm, starting with economic, legal, philanthropy and ethical
The argument against CSR related to business competence to deal with societal problems and their primary responsibility to shareholders. The arguments for CSR is that such practices creates an “licence to operate” and improve performance through reputation, goodwill, customer and employee satisfaction.
The development of the concept Corporate Citizenship has two schools of thoughts: Companies as individuals; and Companies lie state-like providers

17. Resources and examples within organisational context
Cisco systems
Tesco
Report