1. Business Responsibility and Sustainability BHS0032
Dr Eshani Beddewela
Week 02

2. Lecture Outline Defining Corporate Responsibility
The Economic and the Stakeholder Views of CSR
Core characteristics of CSR

3. Defining CSR Davis (1973):-
“the firm’s consideration of, and response to, issues beyond
the narrow economic, technical and legal requirements of
the firm”
Carroll (1979):-
“The social responsibility of business encompasses the
economic, legal, ethical, and discretionary expectations that
society has of organisations at a given point of time’
(Carroll, 1979: 500)

4. Carroll’s typology of corporate responsibilities
Blowfield and Murray (2011)

5. Defining CSR Chinese Ministry of Commerce
Organisation
Definition
Chinese Ministry of Commerce
A concrete action taken by Chinese companies to implement the political aspiration of the new Communist Party collective leadership – putting people first to create a harmonious society.
Department for Business Innovation and Skills
The voluntary actions that business can take over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society.
European Commission
The responsibility of enterprises for their impacts on society. CSR concerns actions by companies over and above their legal obligations towards society and the environment. Certain regulatory measures create an environment more conducive to enterprises voluntarily meeting their social responsibilities

6. The Stakeholder View of CSR
Stakeholders can be seen as those individuals and institutions that are influenced by the firms’ actions or inactions (Freeman 1984).
The stakeholder view – as business practices of companies are influenced by a variety of stakeholders, it is important to act ‘responsibly’ towards all of them.
Shareholders - Economic and legal responsibilities
Employees, community residents, consumers and various interest groups - social returns fulfilling a company’s ethical and discretionary responsibilities
Business organisations face a conflicting dilemma - when taking business decisions
The outcomes could either harm or benefit different stakeholders

7. The Economic View of Social Responsibility
“A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague sense” (Friedman, 1970).
Based on the view that efficient competition would result in ultimate benefits for the society.
The need to ensure the long-term maximisation of the firm’s value and of its social welfare, would result in sustained organisational competitiveness and enhance shareholder wealth.

8. The ‘paradox’ of CSR

9. Core Characteristics of CSR
Voluntary
Managing
Externalities
Beyond
Philanthropy
CSR
Multiple
Stakeholder
orientation
Practices
and values
Social and
Economic alignment
Source: Crane et al (2014)

10. Core Characteristics of CSR : Voluntary
CSR is generally accepted as being about voluntary activities which go beyond those required by law.
As such, businesses are allowed to self-regulate themselves in relation to CSR.
Critics of CSR consider the ‘volunteerism’ attached to CSR to be a major problem
The commitment of companies towards the voluntary adoption of CSR could be deficient and CSR should therefore be legally mandated

11. Core Characteristics of CSR Internalising / managing externalities
Regulations can force firms to internalise the cost of externalities CSR represents a more voluntary approach by which companies engage in ethical behaviour aimed towards minimising externalities in the first place.
Such externalities are:-
Human rights of workers
Minimising carbon emissions
Preventing pollution

12. Core Characteristics of CSR Multiple stakeholder orientation
CSR involves taking into consideration the various interests and impacts among a variety of different stakeholders other than shareholders.
Since companies are reliant upon various stakeholders such as consumers, employees, suppliers and local communities to survive – companies do not only have responsibilities to shareholders.

13. Core Characteristics of CSR Alignment of social and economic responsibilities
CSR should not be against profitability
CSR should be about enlightened self-interest where social and economic responsibilities are aligned

14. Core Characteristics of CSR Practices and values
Companies have to manage business practices and strategies which deal with social issues when they engage in CSR
But
CSR is also about the values of the company !

15. Core Characteristics of CSR Beyond Philanthropy
In most countries of the world CSR is considered to be philanthropy or charity
But
Real CSR is about more than juts philanthropy but about the entire operations of the firm – i.e. CORE BUSINESS FUNCTIONS’ and their impact upon society
Strategic CSR

16. References
Crane, A., Matten, D., & Spencer, L. (Eds.). (2014). Corporate Social Responsibility: Readings and cases in a global context (2nd ed.). London: Routledge.
Chapter 02
Garriga, E., & Mele, D. N. (2004). Corporate Social
Responsibility theories: Mapping the territory. Journal of
Business Ethics, 53(1-2),