3. Corporate Social Responsibility

4. Corporate Social Responsibility
refers to a corporation’s responsibilities or obligations toward society.

5. Whose interests should a company be responsible for?

6. Views on CSR
Shareholder
Stakeholder

7. Shareholder View
a company’s only responsibility/obligation is to (legally and ethically) “make as much money as possible” for its owners
The Purpose of Business is to make money for the owners or stockholders.

8. Assumptions of the Shareholder View
compliance with regulations
natural constraints of the market will help keep companies in check. (i.e. if a company is known to be dishonest or terrible to their employees, then consumers will not buy from that company.)

9. Shareholder View
Companies ultimately provide great benefits for society.
When a company tries to maximize stockholders’ profits in a “free-enterprise” economy, competition will force it to use resources more efficiently than competitors, to pay employees a competitive wage, and to provide customers with products that are better, cheaper, and safer than those of competitors.
So when managers aim at maximizing profits for stockholders in competitive markets, the companies they run will end up benefiting society.

10. Arguments for Shareholder View
Executives/Managers have a fiduciary Responsibility to its stockholders
Selfish Businesses Actually Promote Overall Well-Being
Actions that benefit society is the government’s responsibility
Businesses people are not moral authorities

11. Views on CSR
Shareholder
Stakeholder

12. Stakeholder View
Companies should give all its stakeholders a fair share of the benefits that they produce

13. Stakeholder View
A stakeholder is any identifiable group or individual who
can affect the achievement of an organization’s objectives or;
is affected by the achievement of an organization’s objectives.

14. Arguments for Stakeholder View
People who own stock in a business are not the only people who stand to gain or lose something when businesses make decisions
Utilitarianism (non-egoism)
Not all which are legally allowed are morally permissible

15. CSR
a concept whereby organizations consider the needs of all stakeholders when making decisions.
CSR extends beyond legal compliance to include voluntary actions that satisfy stakeholder expectations.

16. Example of a Corporate Mission Statement
“We are a leading, dynamic Filipino financial services group with a global presence committed to delivering a whole range of quality products and services that will create value and enrich the lives of our customers, employees, shareholders and the communities we serve.”

17. Stakeholders

18. Stakeholders
Customers
Suppliers
Stockholders
Employees
Communities

19. Customers Safe, high-quality products that are fairly priced.
Competent, courteous, and rapid delivery of products and services.
Full disclosure of product-related risks.
Easy-to-use information systems for shopping and tracking orders

20. Suppliers Fair contract terms and prompt payments.
Reasonable time to prepare orders.
Hassle-free acceptance of timely and complete deliveries.
Cooperative rather than unilateral actions.

21. Stockholders Competent management
Easy access to complete and accurate financial information.
Full disclosure of enterprise risks.
Honest answers to knowledgeable questions.

22. Employees Safe and humane working conditions.
Nondiscriminatory treatment and the right to organize and file grievances.
Fair compensation.
Opportunities for training, promotion, and personal development.

23. Communities Payment of fair taxes.
Honest information about plans such as plant closings.
Resources that support charities, schools, and civic activities.
Reasonable access to media sources.

24. What is CSR?
CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis.
~European Commission

25. What is CSR?
CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
~World Business Council for Sustainable Development

26. Dimensions of CSR INTERNAL DIMENSION
Focuses on organizational practices with respect to internal stakeholders that should be aligned to CSR standards
Human Resource Management
Health and Safety
Impact on the Environment
Adaptability to Change

27. Dimensions of CSR EXTERNAL DIMENSION
Focuses on organizational practices with respect to external stakeholders that should be aligned to CSR standards
Human Rights
Community
Business Partners

29. Domains of CSR

30. Concentric Circle Model by the Committee on Economic Development (1971) summarized by Archie B. Carroll.

31. INNER CIRCLE:
Focus: Production, jobs and economic growth

32. INTERMEDIATE CIRCLE:
Examples - Environmental conservation, hiring and relations with employees; and more rigorous expectations of customers for information, fair treatment, and protection from injury

33. OUTER CIRCLE:
Examples – Fight against poverty, environmental advocacy and philanthropy.

34. Carroll’s CSR Pyramid

35. Economic Responsibility

36. Economic Responsibility
It is important to perform in a manner consistent with maximizing earnings per share
It is important to be committed to being as profitable as possible
It is important to maintain a strong competitive position
It is important to maintain a high level of operating efficiency
It is important that a successful firm be defined as one that is consistently profitable

37. Legal Responsibility

38. Legal Responsibility
It is important to perform in a manner consistent with expectations of government and law
It is important to comply with various federal, state, and local regulations
It is important to be a law-abiding corporate citizen
It is important that a success firm be defined as one that fulfills its legal obligation
It is important to provide goods and services that at least meet minimal legal requirements

39. Ethical Responsibility

40. Ethical Responsibility
It is important to perform in a manner consistent with expectations of societal mores and ethical norms
It is important to recognize and respect new or evolving ethical moral norms adopted by society
It is important to prevent ethical norms from being compromised in order achieve corporate goals
It is important that good corporate citizenship be defined as doing what is expected morally or ethically
It is important to recognize that corporate integrity and ethical behaviour go beyond mere compliance with laws and regulations

41. Philanthropic Responsibility

42. Philanthropic Responsibility
It is important to perform in a manner consistent with the philanthropic and charitable expectations of society
It is important to assist the fine and performing arts
It is important that managers and employees participate in voluntary and charitable activities within their local communities
It is important to provide assistance to private and public educational institutions
It is important to assist voluntarily those projects that enhance a community’s quality of life.

44. CSR ISSUES

45. CSR Issues

46. Sample CSR Issues for XYZ Company
Corporate Accountability & Transparency
Socially responsible Investing
Community Development
Work Life Balance
Job Security
Environment

47. Criteria to Evaluate CSR Issues
Internal Significance
How important the issue is to your company?
External Significance
What is important to Stakeholders?
Internal Significance
Potential to affect your revenue, or your cost
Reputation or your brand
Ability to attract customers, be more competitive
Ability to attract employees

48. Materiality Matrix for XYZ Company
Internal Significance
Potential to affect your revenue, or your cost
Reputation or your brand
Ability to attract customers, be more competitive
Ability to attract employees

49. END

51. CSR In the Philippines

52. Approaches to CSR Philanthropy
Integration of CSR into Business Strategy
Creating Shared Value

53. Integration of CSR into Business Strategy
i.e.
Fair Trade
Tatak Pinoy Seal
Risk Management
Occupational Safety and Hazzard
Environmental Standards
Fair labor practices

54. Creating Shared Values
The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent.
Mechanism:
Reconceiving products and markets 
Redefining productivity in the value chain
Enabling local cluster developmen

55. Creating Shared Values
The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent.
Mechanism:
Reconceiving products and markets 
Providing what society needs efficiently
Redefining productivity in the value chain
Act as a steward for essential natural resources and drive economic and social development
Enabling local cluster development
Companies do not operate in isolation from their surroundings