2 What is Corporate Social Responsibility? Looks at ethical issues on the organization level.Obligates organizations to act in ways that serve both its own interests and the interests of external stakeholders.
3 Corporate Social Responsibility Definition: The obligation of an organization to act in ways that serve the various interests of stakeholders.Organizational StakeholdersThose who are directly affected by the behaviour of the organization and hold a stake in its performanceE.g. employees, shareholders (people who own stock in the company), customers, suppliers, etc.
4 Figure 3.4 Multiple stakeholders in the environment of an organization. Management Fundamentals - Chapter 3
5 Leadership Beliefs Guiding CSR People – do best in a healthy work environmentCommunities – organizations perform best in healthy communitiesNatural Environment – treat with respectLong Term SuccessReputation – protect to ensure customer and stakeholder success
6 Perspectives on Social Responsibility Classical viewManagement’s only responsibility is to maximize profits.Socioeconomic viewManagement must be concerned for the broader social welfare, not just profits.
7 Arguments For Social Responsibility Adds long-run profitsBetter public imageAvoids more government regulationBusinesses have resources and ethical obligationBetter environmentPublic wants it
8 Arguments Against Social Responsibility Reduced business profitsHigher business costsDilution of business purposeToo much social power for businessLack of public accountability
9 Criteria for Evaluation Is the organization’s …Economic responsibility met?Legal responsibility met?Ethical responsibility met?Discretionary responsibility met?
10 Figure 3.5 Criteria for evaluating corporate social performance. Obstructionist Defensive Accommodative Proactive
11 Strategies for Pursuing Social Responsibility Obstructionist: meets economic responsibilities.Defensive: meets economic and legal responsibilities.Accommodative: meets economic, legal, and ethical responsibilities.Proactive: meets economic, legal, ethical, and discretionary responsibilities.
12 Figure 3.6 Four strategies of corporate social responsibility—from obstructionist to proactive behavior.
13 Government Influence on Organizations Common areas of government regulation of business affairs:Occupational safety and healthFair labor practicesConsumer protectionEnvironmental protection
14 How Organizations’ Influence Government Personal contacts and networksPublic relations campaignsLobbyingPolitical action committeesIllegal acts, such as bribery or illegal financial contributions