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Corporate social responsibility

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Corporate social responsibility

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The term corporate social responsibility (CSR) refers to practices and policies undertaken by corporations that are intended to have a positive influence on the world. The key idea behind CSR is for corporations to pursue other pro-social objectives, in addition to maximizing profits. Examples of common CSR objectives include minimizing environmental externalities, promoting volunteerism among company employees, and donating to charity

The term corporate social responsibility (CSR) refers to practices and policies undertaken by corporations that are intended to have a positive influence on the world. The key idea behind CSR is for corporations to pursue other pro-social objectives, in addition to maximizing profits. Examples of common CSR objectives include minimizing environmental externalities, promoting volunteerism among company employees, and donating to charity

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Corporate social responsibility

  1. 1. Corporate Social Responsibility 8 modules by Ahmad Thanin Bailasan Healthcare Services ltd
  2. 2. Corporate Social Responsibility (CSR) Module 1: Introduction to business Ethics. Module 2: Approach to Ethical Thinking Module 3: Introduction to CSR Module 4: Timberland CSR Module 5: Importance and Benefits of CSR Module 6: Conducting a CSR Assessment Module 7: CSR and Small Business Module 8: Corporate Social Initiatives Six Option for Doing Good
  3. 3. Module 1: Introduction to business Ethics.
  4. 4. Defining Ethics • Ethics refers to the well- balanced STANDARDS of right or wrong that prescribe what humans ought to do, usually in terms of : • Rights. • Obligations. • Fairness. • Values. • Benefits to society
  5. 5. Examples to standards related to Rights are: to life. Right to freedom. Right to privacy. Right to harmed. Right to respected. Right to pray Right
  6. 6. Ethics refers to standards that impose the reasonable obligation to refrain from: • Bribe. • Stealing. • Untruth. • Assault. • Fraud
  7. 7. Finally, Ethics is what specific rules should be instituted and followed.
  8. 8. Morals • The rules that govern which actions are right and which actions are wrong. • The character of being in accordance with the principles or standards of right conduct. • Morals is a Self perspective • Morals can be individual's beliefs or all of society beliefs.
  9. 9. Examples Of Morals • Do not gossip • Tell the truth • Have courage • Keep your promises • Have patience • Be generous
  10. 10. Moral Standards Moral standards include the norms we have about the kinds of actions we believe are morally right and wrong as well as values we place on kinds of objects, we believe are morally good and morally bad. Moral Norms is expressed as general rules: “ Always Tell the truth”. Moral values as a Statement: “ Honesty” “Courage” “Confidentiality”
  11. 11. Origin of Moral Standards Later, from Life Experience: Learning and Intellectual development During Childhood from family, friends and societal institutions
  12. 12. Moral Responsibilities When the person KNOWINGLY AND FREELY performed or brought about an action/effect which was morally wrong for the person to perform. When the person KNOWINGLY AND FREELY failed to perform or prevent an action/effect which was morally wrong for the person to fail to perform.
  13. 13. Moral Irresponsibility - Ignorance Inability Excusing Conditions: Two conditions completely eliminate a person’s moral responsibility:
  14. 14. Moral Irresponsibility Mitigating Factors: Doubtful about facts or about how seriously the action is wrong Subjected to threat or duress avoiding the action impose heavy cost or burden Diminished active involvement in the action that develop injury
  15. 15. What Is Business Ethics? Business ethics is the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.
  16. 16. the 7 principles of ethics in business Honesty. Integrity. Promise-Keeping & Trustworthiness. Loyalty. Fairness. Concern for Others. Respect for Others. Law Abiding.
  17. 17. Business Ethics • Businesses has faced a lot of challenge in recent time. • Businesses is observed by a variety of stakeholders and public. • To avoid such challenges there was a need to comply with a group of morals and values.
  18. 18. Policies Institutions. Behavior Business ethics is the specialized study of moral rights and wrong. It concentrates on moral standards as they apply particularly to business function areas:
  19. 19. Ethics in business is related to all function areas like: • Accounting • Finance • Management • Marketing
  20. 20. Is Business Ethics Necessary? Two conflicting extreme views of the business world about whether business ethics is necessary or not? Successful businesses work well to enrich society, and business ethicists are interfering and annoying disciplines threatening to ruin our economic welfare. Business needs policing because it’s a dirty enterprise featuring people who get ahead by being selfish.
  21. 21. Importance of Business Ethics Ethical motivations Balancing the needs of stakeholders Global challenges Ethical pay off Prevent criminal penalties Avoid civil lawsuits Employee retention Market leadership Setting an example
  22. 22. How to Do Business Ethics • ARRANGING VALUES TO GUIDE DECISIONS Values need to be clearly defined and serve as a well justified set of priorities about: • What is worth seeking? • What is worth protecting? • What is worth giving up? • What is worth compromising on?
  23. 23. How to Do Business Ethics? • UNDERSTANDING THE FACTS To effectively apply a set of values to any situation, the situation itself must be carefully defined.
  24. 24. How to Do Business Ethics ? • CONSTRUCTING ARGUMENTS To effectively apply a set of values to any situation, the situation itself must be carefully defined. • An argument shows how, given the facts, one action serves our values better than other actions • Arguments need to make sense to outside observers • In practical terms, the test of an ethical argument resembles the test of a recipe for a cook: others need to be able to follow it and come to the same result.
  25. 25. Argument and Counter-Argument • Broadly, there are three ways to dispute an argument in ethics: • FACTS • VALUES • REASONING
  26. 26. What’s the Difference between Normative Ethics and Descriptive Ethics? • Business ethics is Normative , which means it concerns how people ought to act. • Descriptive ethics represents how people actually are acting.
  27. 27. Module 2: Approach to Ethical Thinking
  28. 28. Objectives This module will consider the dilemma of ethical consideration and cover 5 approaches to ethical thinking: The Utilitarian Approach The right Approach The Fairness and Justice Approach The Common Good Approach The Virtue Approach
  29. 29. Introduction We are attacked daily with situations and questions about: the justice of foreign policy the morality of medical technologies that can prolong lives the rights of the homeless the fairness of our children's teachers to the diverse students in their classrooms.
  30. 30. Dealing with these moral issues is often confusing: • How, exactly, should we think through an ethical issue? • What questions should we ask? • What factors should we consider?
  31. 31. • The first step in analyzing moral issues is obvious but not always easy: GET THE FACTS. • Some moral issues create controversies simply because we do not bother to check the facts. • This first step, although obvious, is also among the most important and the most frequently ignored.
  32. 32. But having the facts is not enough. Facts by themselves only tell us what it is!! Facts do not tell us what ought to be!! In addition to getting the facts, resolving an ethical issue also requires an appeal to values.
  33. 33. • Philosophers have developed FIVE DIFFERENT APPROACHES to values to deal with moral issues. • These approaches represent methods used to evaluate situations and recommend ethical courses of action.
  34. 34. The Utilitarian Approach Started in the 19th century by Jeremy Bentham & John Stuart Mill to help legislators determine which laws were morally best. Both Bentham and Mill suggested that ethical actions are those that provide the greatest balance of good over evil.
  35. 35. The Utilitarian Approach Analysis Identify the various courses of action available to us. Ask who will be affected by each action and what benefits or harms will be derived from each. Choose the action that will produce the greatest benefits and the least harm The ethical action is the one that provides the greatest good for the greatest number of people
  36. 36. Utilitarian Rules The action will be considered ethical, if and only if, when repeating the same action by everyone in the same organization the output of that repeated action will produce greatest benefits to the greatest number of people and with less harm. An action is right from an ethical point of view if and only if the action would be required by those moral rules that are correct. A moral rule is correct if and only if the sum total of utilities produced if everyone were to follow that rule is greater than the sum total of utilities produced if everyone were to follow some alternative rule.
  37. 37. The Rights Approach Has roots in the philosophy of the 18th-century thinker Immanuel Kant and others like him, who focused on the individual's right to choose for herself/himself. People have dignity based on their ability to choose freely what they will do with their lives, and they have a fundamental moral right to have these choices respected. People are not objects to be manipulated; it is a violation of human dignity to use people in ways they do not freely choose.
  38. 38. Types of Rights
  39. 39. Applying the Rights Approach In deciding whether an action is moral or immoral using The Rights Approach, we must ask: • Does the action respect the moral rights of everyone? • Does the action violate the rights of individuals? • The more serious the violation, the more wrongful the action?
  40. 40. The Fairness or Justice Approach The fairness or justice approach to ethics has its roots in the teachings of the ancient Greek philosopher Aristotle, who said that "equals should be treated equally and unequal's unequally." How fair is an action? Does it treat everyone in the same way? Does it show favoritism and discrimination?
  41. 41. Favoritism Vs Discrimination Favoritism gives benefits to some people without a justifiable reason for singling them out Discrimination imposes burdens on people who are no different from those on whom burdens are not imposed. Both favoritism and discrimination are unjust and wrong
  42. 42. The Common- Good Approach • This approach to ethics assumes a society including individuals whose own good is closely linked to the good of the community. Community members are bound by the pursuit of common values and goals. • The common good is a notion that originated more than 2,000 years ago in the writings of Plato, Aristotle, and Cicero.
  43. 43. The Common-Good Approach More recently, contemporary ethicist John Rawls defined the common good as: “Certain general conditions that are...equally to everyone's advantage.
  44. 44. THE COMMON GOOD PRINCIPLES 1-The Common Good The Common Good is the shared life of a society in which everyone can flourish - as we act together in different ways that all contribute towards that goal, enabled by social conditions that mean every single person can participate. We create these conditions and pursue that goal by working together across our differences, each of us taking responsibility according to our calling and ability. The Common Good is built as people participate freely in the shared activities that generate it. It is not a utopian ideal and cannot, by definition, be imposed.
  45. 45. THE COMMON GOOD PRINCIPLES Human Dignity: Every person is worthy of respect simply by virtue of being human. Human Equality: All human beings are of equal worth in the eyes of God. Dignity of work: Work is more than just a way, to make a living – it is good for our humanity, because through work we participate in God’s great creative plan. Respect of life: People matter more than things: each human life has value, from the youngest to the oldest, from the weakest to the strongest. 2- The human person
  46. 46. THE COMMON GOOD PRINCIPLES We have a right and a duty to participate and take up our proper responsibilities, working with others.. We are called to build relationships where there is mistrust, suspicion or estrangement, especially when we encounter people with whom we disagree. Responsibility is taken at the most appropriate level and decisions should always be taken ​closest to where they will have ​their ​effect. A central authority should only do tasks which cannot be performed at a more local level - so that all fulfil their unique roles. We are social beings designed to be interconnected by relationships of mutual concern and support. Solidarity is a determination to work for the good of all and of each individual - all are responsible for all. 3- Social relationships
  47. 47. THE COMMON GOOD PRINCIPLES • 4- Stewardship: • The Earth was here before us and was given to us - our common home. It is God's dominion, but entrusted to us, and it is our shared responsibility to be good stewards of everything we have received – nature, one another, resources, gifts and talents.
  48. 48. THE COMMON GOOD PRINCIPLES • 5- Everyone is included – no one is left behind : • There is to be a preferential option for those who are poor or vulnerable, so we say “Come and join in…we need you!” If the strong are separated from the weak, the strong become impoverished, since being fully human means living together, sharing a common life.
  49. 49. Common Good Approach in Action
  50. 50. Examples of goods common affordable health care effective public safety peace among nations just legal system unpolluted environment
  51. 51. Challenges to Common-Good Approach: Appeals to the common good urge us to view ourselves as: Members of the same community. Reflecting on broad questions concerning the kind of society we want to become. How we are to achieve that society
  52. 52. Challenges to Common-Good Approach: While respecting and valuing the freedom of individuals to pursue their own goals, the common- good approach challenges us also to recognize and further those goals we share.
  53. 53. The Virtue Approach
  54. 54. The Virtue Approach • It assumes that there are certain ideals toward which we should strive, which provide for the full development of our humanity. • These ideals are discovered through thoughtful reflection on what kind of people we have the potential to become. • Virtues are attitudes or character traits that enable us to be and to act in ways that develop our highest potential. • They enable us to pursue the ideals we have adopted.
  55. 55. The Virtue Approach Virtues are like habits; that is, once acquired, they become characteristic of a person. Moreover, a person who has developed virtues will be naturally disposed to act in ways consistent with moral principles. The virtuous person is the ethical person.
  56. 56. Ethical Problem Solving These five approaches suggest that once we have ascertained the facts, we should ask ourselves five questions when trying to resolve a moral issue: What benefits and what harms will each course of action produce, and which alternative will lead to the best overall consequences? What moral rights do the affected parties have, and which course of action best respects those rights? Which course of action treats everyone the same, except where there is a morally justifiable reason not to, and does not show favoritism or discrimination? Which course of action advances the common good? Which course of action develops moral virtues?
  57. 57. Summary and Conclusion for Module 2 The various approaches often disagree on the best thing to do. Even when they agree on what to do, they do so for very different reasons. Each approach often needs certain questions that are irrelevant to another approach. It is handy to know which approach we tend to use for our personal decisions. In business, it is important to know what the company values are and how they integrate into policies guiding our actions as employees.
  58. 58. Summary and Conclusion for Module 2 In Multi-National organizations, it is vital to understand aspects of differing approaches used in the various host-countries in which it operates. Even when two approaches would come to the same result, you should not ignore features that are relevant to the other approach, if for no other reason do not insult your friends, colleagues, family members, hosts, etc. Try always to appreciate the fact that many methodologies can work together well, if first we take the time to understand and integrate them.
  59. 59. Module 3: Introduction to CSR
  60. 60. Introduction Responsible business is good business
  61. 61. Introduction • Businesses are an integral part of the communities in which they operate. • The term “Corporate Social Responsibility" is used extensively by many to cover legal and moral responsibility of business corporation. • CSR aims to hold responsibility for corporate actions and to encourage a positive impact on the environment and stakeholders
  62. 62. Defining CSR Because CSR is an evolving concept, currently there is no universally accepted definition.
  63. 63. Defining CSR • The way firms integrate social, environmental and economic concerns into their values, culture, decision making, strategy and operations in a transparent and accountable manner. • Establish better practices within the firm, creates wealth and improves society by focusing on social, environmental and economic factors • As CSR issues become increasingly integrated into modern business practices, there is a trend towards referring to it as: Responsible Competitiveness and Corporate Sustainability
  64. 64. Two Drivers of CSR 1. Public Policy: • Governments and wider society take a close interest in what business does • The expectations on businesses are rising; governments will be looking for ways to increase the positive contribution of business 2. Business Sector: • CSR as costs e.g., introducing new approaches • CSR as a benefits e.g., improving brand value, or introducing products that meet sustainability demands
  65. 65. Two Drivers of CSR 1. Public Policy: • Governments and wider society take a close interest in what business does • The expectations on businesses are rising; governments will be looking for ways to increase the positive contribution of busines 2. Business Sector: • CSR as costs e.g., introducing new approaches • CSR as a benefits e.g., improving brand value, or introducing products that meet sustainability demands
  66. 66. The UN 17 Sustainable Development Goals
  67. 67. The Global Sustainable Development Goals The Global Sustainable Development Goals are important and require cooperation among governments, international organizations and world leaders. It seems impossible that the average person can make an impact. Fortunately, there are some super easy things we can adopt into our routines that, if we all do it, will make a big difference.
  68. 68. The Ten Principles of the UN Global Compact • The United Nations Global Compact is • a United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. • Under the Global Compact, companies are brought together with UN agencies, labour groups and civil society
  69. 69. The Ten Principles of the UN Global Compact Human Rights: • Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and • Principle 2: make sure that they are not complicit in human rights abuses. Labour: • Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; • Principle 4: the elimination of all forms of forced and compulsory labour; • Principle 5: the effective abolition of child labour; and • Principle 6: the elimination of discrimination in respect of employment and occupation. Environment: • Principle 7: Businesses should support a precautionary approach to environmental challenges; • Principle 8: undertake initiatives to promote greater environmental responsibility; and • Principle 9: encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption • Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
  70. 70. The UN Global Compact’s Ten Principles are derived from the: Universal Declaration of Human Rights International Labor Organization’s Declaration on Fundamental Principles and Rights at Work Rio Declaration on Environment and Development United Nations Convention Against Corruption
  71. 71. Principle-5:Child Labor
  72. 72. Child Labor Child Labor refers to the employment of children in any work that deprives children of their childhood, interferes with their ability to attend regular school, and that is mentally, physically, socially or morally dangerous and harmful. This practice is considered exploitative by many international organizations. Legislation across the world prohibit child labor
  73. 73. 9 Famous Companies That Still Use Child Labor
  74. 74. Module 4: Timberland CSR
  75. 75. Responsible business is good business
  76. 76. Is Timberland an ethical company? Timberland is one of only 20 companies to land a spot on the Fortune 100 Best Companies To Work For List since its inception. Timberland has also been included in Ethisphere's 2010 list of the World's Most Ethical Companies.
  77. 77. How does Timberland protect the natural environment? Earth Day events focus on protecting the environment and greening our communities. Our employees may create or maintain trails, install or refurbish community gardens, help expand urban farms, clean up parks or beaches, plant trees or build outdoor classrooms for local schools.
  78. 78. TIMBERLAND AND THE SMALLHOLDER FARMERS ALLIANCE: CHANGING LANDSCAPES, LIVES AND COMMUNITIES IN HAITI Haiti is one of the world’s most severely deforested countries with an estimated 1.5% tree cover. In contrast, Haiti’s neighbor, the Dominican Republic, has 48% tree cover, while U.S. cities have an average of 27% tree cover. Haiti’s deforestation is driven by many factors, including: • dependency on wood for cooking charcoal • rapid population growth • unreliable agricultural practices. These factors contribute to the severity of food insecurity, flooding and erosion.
  79. 79. TIMBERLAND AND THE SMALLHOLDER FARMERS ALLIANCE: CHANGING LANDSCAPES, LIVES AND COMMUNITIES IN HAITI • In 2010, Timberland partnered with Timoté Georges and Hugh Locke, co- founders of the Smallholder Farmers Alliance (SFA), to develop a sustainable agro-forestry business model run by local smallholder farmers that would be self- financed within five years. The farmers voluntarily tend to a network of tree nurseries that annually produce one million trees. In return, the farmers receive training, crop seeds, trees and tools that collectively help restore tree cover and increase crop yields.
  80. 80. TIMBERLAND AND THE SMALLHOLDER FARMERS ALLIANCE: CHANGING LANDSCAPES, LIVES AND COMMUNITIES IN HAITI
  81. 81. TIMBERLAND AND THE SMALLHOLDER FARMERS ALLIANCE: CHANGING LANDSCAPES, LIVES AND COMMUNITIES IN HAITI
  82. 82. THE 5-YEAR IMPACT • A thriving cooperative with 3,200 Haitian farmer members • Five million trees planted, increased production of cash crops • A proven sustainable economic development model that can be replicated elsewhere
  83. 83. TIMBERLAND AND HERPROJECT IMPROVE WOMEN’S HEALTH IN BANGLADESH
  84. 84. Create Sustainable Workplace Programs That Increase Women's Health Awareness. Since May 2012, BSR's HERproject has linked Timberland and Pou Hung Industrial Ltd., a factory partner in Chittagong Bangladesh, with MAMATA, a local NGO, to create sustainable workplace programs that increase women's health awareness.
  85. 85. Create Sustainable Workplace Programs That Increase Women's Health Awareness. BSR’s HER project is a collaborative initiative that strives to empower low-income women working in global supply chains. Bringing together global brands, their suppliers, and local NGOs, HER project drives impact for women and business via workplace-based interventions on health, financial inclusion, and gender equality.
  86. 86. At the end of each VF audit, the factory receives one of the following ratings: Accepted – factory has no serious safety, health, or labor issues and is certified to produce VF products for 18 months, at which time a re-audit is necessary to maintain an 'Accepted' rating Developmental – factory has some minor safety, health, or labor issues. The factory is authorized to produce for VF while the issues identified are corrected in a timely manner and a follow-up audit is scheduled within 6 – 9 months. If the problems are corrected as required, then the status of the factory will be elevated to 'Accepted.' If not, the factory is downgraded to 'Pending Rejection-180 days' ("PR-180 days"), at which time they have a final 6 months to satisfactorily resolve the outstanding issues or be downgraded to 'Rejected'. Rejected – factory has major safety, health or labor issues. Examples would include excessive working hours, incorrect overtime compensation or locked emergency exits. In this situation the factory is not authorized to produce VF products. If a factory is Rejected twice consecutively, they are banned from producing for VF for 12 months.
  87. 87. TIMBERLAND BRINGS CLEAN WATER TO SANTIAGO, DOMINICAN REPUBLIC
  88. 88. TIMBERLAND BRINGS CLEAN WATER TO SANTIAGO, DOMINICAN REPUBLIC • Timberland has operated its footwear factory in Santiago, Dominican Republic since 1982 and is committed to the wellbeing of the communities where its workers live. • In celebration of World Water Day (March 22, 2014), Timberland® partnered with Children International and Planet Water Foundation to construct two clean water towers at primary schools in Santiago. • Each tower provides 10,000 liters of clean drinking water each day to over 2,000 people.
  89. 89. TIMBERLAND BRINGS CLEAN WATER TO SANTIAGO, DOMINICAN REPUBLIC • Previously the schools paid for bottled water to be brought in for teachers and staff. • Now, the water towers ensure that everyone at the school, especially the children, can access clean, safe drinking water throughout the day. • In addition to constructing and installing the water towers, Planet Water also provided important education on hygiene and water-related health to the school and community.
  90. 90. Module 5: Importance and Benefits of CSR
  91. 91. CSR Video
  92. 92. CSR as a Sustainable development • Humankind is using natural resources at a faster rate than they are being replaced. • If this continues, future generations will not have the resources they need for their development
  93. 93. 1- Sustainable Development Current unsustainable development can’t be continued for both practical and moral reasons. There is a need for greater attention to poverty alleviation and respect for human rights. CSR is an entry point for understanding sustainable development issues and responding to them in a firm’s business strategy.
  94. 94. 2- Globalization Economic globalization is increasingly rising in terms of: Cross-border trade, multinational enterprises and global supply chains CSR concerns related to: HR, management practices, environmental protection and health & safety CSR can play a vital role in detecting: How business, impacts labor conditions, local communities and economies and ensure business helps maintain & build public good CSP is especially important for export-oriented firms in emerging economies
  95. 95. 3- Governance Governments and intergovernmental bodies, as the UN, the International Labour Organization (ILO) developed various compacts, declarations, guidelines, principles and other instruments that outline norms for what they consider to be acceptable business conduct. CSR instruments often reflect internationally-agreed goals and laws regarding human rights, the environment and anti-corruption.
  96. 96. 4- Corporate Sector Impact The total size and number of corporations, and their potential to impact political, social and environmental systems relative to governments and civil society, raise questions about influence and accountability. Even small and medium size enterprises (SMEs), which collectively represent the largest single employer, have a significant impact. Companies are global ambassadors of change and values. How they behave is becoming a matter of increasing interest and importance
  97. 97. 5- Communications Advances in communications technology makes has had several impacts: • Easier to track and discuss corporate activities. • Facilitate management, reporting and change. • NGOs, the media and others can quickly assess and profile business practices they view as either problematic or exemplary. • Modern communications technology offers opportunities to improve dialogue and partnerships.
  98. 98. 6- Finance Consumers and investors are showing increasing interest in supporting responsible business practices and are demanding more information on how companies are addressing risks and opportunities related to social and environmental issues. A sound CSR approach can help build shareholder value, lower the cost of capital, and ensure better responsiveness to markets
  99. 99. 7- Ethics Serious and high-profile breaches of corporate ethics result in damage to employees, shareholders, communities or the environment as well as elevated public mistrust of corporations. A CSR approach can help improve corporate governance, transparency, accountability and ethical standards.
  100. 100. 8- Consistency and Community Citizens in many countries are making it clear that corporations should meet the same high standards of social and environmental care, no matter where they operate In the CSR context, firms can help build a sense of community and shared approach to common problems
  101. 101. 9- Leadership With the limits of government legislative and regulatory initiatives to effectively capture all the issues that CSR address. CSR can offer the flexibility and incentive for firms to act in advance of regulations, or in areas where regulations seem unlikely.
  102. 102. 10- Business Tool • Adopting an effective CSR approach can: • Reduce the risk of business disruptions • Open new opportunities, drive innovation • Enhance brand and company reputation • Improve efficiency
  103. 103. Outcomes of Effective CSR Potential benefits of implementing a CSR approach
  104. 104. Better Anticipation And Management Of Spectrum Of Risk • Effectively managing the following risks in an increasingly complex market environment, with greater oversight and stakeholder inspection of corporate activities, can improve the security of supply and overall market stability. Governance Legal Environmental Social Economic
  105. 105. Nestle CSR
  106. 106. Improved Reputation Management Even for firms that do not have direct retail exposure through brands, their reputation for addressing CSR issues as a supply chain partner— both good and bad—can be crucial commercially Reputation, or brand equity, is founded on values such as trust, credibility, reliability, quality and consistency. Organizations that perform well with regard to CSR can build their reputation, while those that perform poorly can damage brand and company value when exposed.
  107. 107. Apple Supply Chain- CSR • Apple forced to address the ugly consequences of working practices down its supply chain at Foxconn manufacturing sites in China which had led to worker suicides. • Foxconn is an electronics manufacturer, and its clients include major American, European and Japanese electronics and information technology companies.
  108. 108. Walmart Supply Chain CSP • Walmart faced criticisms over its lack of controls over a supplier in The Tazreen fashions plant in Bangladesh whose factory fire at resulted in the death of over a hundred employees. The plant had failed safety inspections in 2011 and earlier in 2012. • Walmart faces the dilemma of seeking lowest prices from suppliers globally to deliver low price products while projecting a corporate image of high ethical standards and corporate social responsibility.
  109. 109. Enhanced ability to recruit, develop and retain staff. • Direct result of pride in company’s products and practices, or of improved human resources practices, such as “family-friendly” policies e.g. “The Harrods Management Program”. • Indirect result of programs and activities that improve employee morale and loyalty.
  110. 110. Improved Innovation, Competitiveness And Market Positioning. Good business is the one of being alert to trends, innovation, and responding to markets. A firm may become certified to environmental and social standards so it can become a supplier to particular retailers. Advertising features environmental or social benefits of products will improve market positioning (e.g., hybrid cars, unleaded petrol,14 ethically produced coffee, wind turbines).
  111. 111. Hybrid Car
  112. 112. Hybrid Car
  113. 113. Enhanced Operational Efficiencies And Cost Savings Improved efficiencies identified through a systematic approach to management that includes continuous improvement. For example, assessing the environmental and energy aspects of an operation can reveal opportunities for turning waste streams into revenue streams
  114. 114. Attract And Build Effective And Efficient Supply Chain Relationships • Form profitable long-term business relationships by improving standards, and thereby reducing risks. • Stimulate smaller firms to implement a CSR approach. • For example, some large apparel retailers require their suppliers to comply with worker codes and standards.
  115. 115. Enhanced Ability To Address Change Regular stakeholder dialogue is in a better position to anticipate and respond to regulatory, economic, social and environmental changes that may occur. Firms use CSR as a “Radar” to detect evolving trends in the market.
  116. 116. More Robust “Social License” To Operate In The Community • Improved citizen and stakeholder understanding of the firm’s objectives and CSR activities • More robust and enduring public, private and civil society alliances
  117. 117. Access To Capital Financial institutions are increasingly incorporating social and environmental criteria into their assessment of projects When making decisions about where to place their money, investors are looking for indicators of effective CSR management. A business plan incorporating a good CSR approach is often seen as a proxy for good management.
  118. 118. Improved Relations with Regulators • In a number of jurisdictions, governments have accelerated approval processes for firms that have undertaken social and environmental activities beyond those required by regulation. • In some countries, governments use CSR indicators in deciding on procurement or export assistance contracts.
  119. 119. A Catalyst For Responsible Consumption “Responsible consumerism” is not exclusively about changing consumer preferences, it is also about: • what goods are supplied in the marketplace • Goods relationship to consumer rights and sustainability issues • how regulatory authorities mediate the relationship between producers and consumers.
  120. 120. Module 6: Conducting a CSR Assessment
  121. 121. Objectives Identify why we do CSR Assessment Enumerate factors affecting CSR Assessment Learn the five phases of doing CSR Assessment Introduced to different working definition of CSR Pick up some examples of CSR Projects
  122. 122. CSR Assessment • The assessment identify the main risks and opportunities, and culminate in a thorough gap analysis: • Where is the organization strong and where is it weak relative to internal goals, peers and best practices? • How well is the firm’s strategy responding to emerging issues and opportunities? • The collected essential information is to identifying priorities and selling the approach within and outside the firm.
  123. 123. Introduction A logical first step is to gather and examine relevant information about the firm’s: Decision making processes Products Services Activities To determine where the firm currently is with respect to CSR activity To locate its “pressure points” for CSR action.
  124. 124. Proper CSR Assessment Should Provide An Understanding Of The Following: The firm’s values and ethics The internal and external drivers motivating the firm The key CSR issues that are affecting or could affect the firm The key stakeholders who need to be engaged, and their concerns. The current corporate decision-making structure and its strengths and inadequacies in terms of implementing a more integrated CSR approach The human resource and budgetary implications of such an approach Existing CSR-related initiatives
  125. 125. Why Do An Assessment? When the board of directors, CEO and top management or owners do not have an accurate snapshot of how far the firm is down the CSR Road, it is unlikely they will be able to make informed decisions about moving ahead. Gathering the form of a CSR assessment can save a firm from launching an ineffective CSR approach or heading in a direction that is not sustainable in business terms.
  126. 126. Why Do An Assessment? An assessment can also help identify CSR gaps and opportunities and thereby improve business decision making. Importantly, too, it can act as a reminder of existing legal requirements.
  127. 127. How To Do An CSR Assessment? A five stage CSR assessment process is set out below: • Assemble a CSR leadership team; • Develop a working definition of CSR; • Identify legal requirements; • Review corporate documents, processes and activities; and • Identify and engage key stakeholders.
  128. 128. 1. Assemble A CSR Leadership Team Like any successful management strategy, a CSR process needs both high level management vision and support and buy-in at all levels of the company. • High level management vision • Buy-in at all levels of the company
  129. 129. 1. Assemble A CSR Leadership Team For this reason, a CSR leadership team would include representatives from within the firm that are affected by or involved in CSR issues including: • Board of Directors • Top Management • Owners • Volunteers from various units
  130. 130. 1. Assemble A CSR Leadership Team • Other representatives could be: • Senior personnel from human resources. • Environmental services • Community relations. • Communications. • Legal affairs. • Finance, marketing
  131. 131. 2. Develop A Working Definition Of CSR The first task of the leadership team is to develop a working definition of CSR for the firm. This will become the basis for the rest of the assessment. The definition for CSR should be something quite general.
  132. 132. The Definition For CSR CSR is the way the company integrates economic, environmental and social objectives while, at the same time, addressing stakeholder expectations and sustaining or enhancing shareholder value.
  133. 133. 3. Identify legal requirements • As noted above, CSR is all above voluntary choices a firm makes to improve its performance and the way it relates to society. • In this context, an essential step is to ensure that the business already respects existing laws, whether in relation to such things as governance, taxation, bribery, labour, or environment. • A good CSR strategy and the firm’s reputation can be quickly damaged if it is found to be in breach of basic laws.
  134. 134. 4. Review Corporate Documents, Processes And Activities With a working CSR definition and an initial understanding of the motivations behind the firm’s interest in CSR, the team should then review key corporate documents, processes and activities for actual and potential CSR implications. Documents Processes Activities
  135. 135. Documents mission statements Policies & codes of conduct & principles operating documents programs or initiatives standards, principles or guidelines
  136. 136. Processes Firms who have specific decision-making processes and associated decision-making bodies in place can address aspects of operations, and these may affect the CSR approach. For example: • Health And Safety Committee: may take the lead in determining the resources, training and implementation of worker health and safety programs. • Senior Legal Counsel: may play a key role in decisions about environmental protection activities, in conjunction with senior engineers and other staff
  137. 137. Processes Decision making concerning suppliers is an area that touches on CSR in many regards, including training, wages, and health and safety protection. It is instructive for the leadership team to review these types of decisions, who makes them and how. It is important to determine whether there is a unit or process in place to coordinate decisions about issues with a societal dimension.
  138. 138. Activities Examine activities relate directly to products or services to users Examine competitors and firms' activities in other sectors is helpful indications of areas in which the firm might wish to concentrate attention. Examine activities in other jurisdictions, such as the level of security or conflict overseas, since these may be indicators of challenges or opportunities to come. Activities of business partners (particularly supply-chain partners), since these may significantly affect the firm.
  139. 139. 5. Identify And Engage Key Stakeholders Leadership team should hold discussions with key external stakeholders about CSR. Mapping the interests and concerns of stakeholders against those of the firm can reveal both opportunities and potential problem areas. Leading firms see stakeholder engagement as central to task of identifying issues most material to them. Be clear about the purpose of discussions, since stakeholders might view it as an opportunity to express their views more generally about the company’s behavior in relation to them.
  140. 140. 5. Identify And Engage Key Stakeholders Key to engaging effectively with stakeholders is to map their definition of “success” in working with the company. Identifying the results from this task (e.g., a summary of the CSR assessment) would be helpful. Larger firms may choose to engage one of the many independent consultants specialized in stakeholder mapping to help them with this or other CSR processes. As noted below, another consideration to bear in mind is the capacity of stakeholder groups to remain engaged in any ongoing consultation.
  141. 141. Module 7: CSR and Small Business
  142. 142. Objectives Identify what is small business Identify how small business can help Improving the environment through CSR Recognize how small business can Improving human resource management practices through CSR Recognize how small business can Promoting diversity and human rights through CSR Topics where small business can contribute to Helping the community by applying CSR initiatives
  143. 143. Introduction to Small businesses Business is defined as "small" in terms of government support and tax policy varies depending on the country and industry. Small businesses are common in many countries, depending on the economic system in operation
  144. 144. Introduction to Small businesses Small Businesses are normally privately owned corporations, partnerships, or sole proprietorships.
  145. 145. CSR And Small Businesses In small business, the front-line personnel carrying out the functions of the business, therefore, employees are often very aware of several ways in which the firm’s activities affect stakeholders, and frequently have suggestions for improvement. Also, many small businesses operate closely with local communities and understand the issues. The small size of operations may make it easier to find information on actual and potential CSR activities and impacts.
  146. 146. Practical CSR initiatives for small business
  147. 147. Improving The Environment • Reduce consumption of energy, water and other natural resources, and emissions of hazardous substances • Use or produce recycled and recyclable materials, increase the durability of products, and minimize packaging through effective design (“reduce, reuse and recycle”) • Train and encourage staff to look for additional ways to reduce the firm’s environmental footprint • Use “green” (i.e., renewable energy) power electricity suppliers and energy-efficient lighting;
  148. 148. Improving The Environment • Join or start a local “green business” club that can help local firms access conservation grants and expertise for reducing waste, water use and • Consider using video-conferencing to meet a potential supplier or customer rather than always physically travelling to meetings • Establish an environmental management system with objectives & procedures for evaluating progress, minimizing negative impacts & transferring good practices.
  149. 149. Improving Human Resource Management Practices Establish policies to ensure the health and safety of all employees and make the policies known to employees; Involve employees in business decisions that affect them and improve the work environment Consult employees on how to handle a downturn in business (e.g., offer the option of all staff taking pay cuts or reduced hours instead of layoffs) When layoffs or closures are unavoidable, offer outplacement services, retraining and severance benefits
  150. 150. Promoting Diversity And Human Rights Having explicit policies against discrimination in hiring, salary, promotion, training or termination of any employee based on gender, race, age, ethnicity, disability, sexual orientation or religion. Do not tolerate jokes or behavior in the workplace that insult employees based on gender, race, age, ethnicity, disability, sexual orientation or religion. When hiring, think creatively about where to advertise the job and whether there are any local employability schemes (e.g., run by a local council or employer) to help find work for people who are homeless or disabled. Support organizations that promote fair trade and human rights compliance. Check where products are manufactured and look into any associated human rights concerns.
  151. 151. Helping The Community • Encourage employee volunteering in the community and with financial contributions and help in kind. • Make some of the business’s product or services available free or at cost to charities and community groups. • Look for opportunities to make surplus product and redundant equipment available to local schools, charities and community groups. • Buy from local suppliers and strive to hire locally.
  152. 152. Module 8: Corporate Social Initiatives Six Option for Doing Good
  153. 153. We have more work to Do because we all passenger in that Planet
  154. 154. What Are The Trends in Business? Increased Giving Increased Reporting Establishment of a Corporate Social Norm to Do Good A Shift from Obligation to Strategy
  155. 155. Why Do Good? Increased sales and market share. Strengthened brand positioning. Enhanced corporate image and power. Increased ability to attract, motivate, and retain employees. Decreased operating costs. Increased appeal to investors and financial analysts.
  156. 156. Different Approaches to Do Good The Traditional Approach: Fulfilling an Obligation The New Approach: Supporting Corporate Objectives as Well
  157. 157. What Are The Major Current Challenges To Doing CSR Practices? Choosing a Social Issue Selecting an Initiative to Address the Issue Developing and Implementing Program Plans Evaluation
  158. 158. 1- Challenges of Choosing a Social Issue How does this support our business goals? How big of a social problem is this? Isn’t the government or someone else handling this? What will our stakeholders think of our involvement in this issue? Is this something our employees can get excited about? Will this cause backfire on us and create a scandal? Is this something our competitors are involved in and own already?
  159. 159. 2- Challenges of Selecting an Initiative to Address the Issue How can we do this without distracting our core business? How will this initiative give visibility to our company? Do these promotions really work? Who pays attention to them? What if we tie our funding commitment to sales and end up writing them a check for only US$ XX? How will that look?
  160. 160. 3- Challenges of Developing and Implementing Program Plans How can we do this when money is needed for increased performance? What do we say to shareholders who see this as money that belongs to them? Why is our department being asked to fund this? Will we be doing enough good for the cause to justify the expense? Isn’t this just brand advertising in cover?
  161. 161. 4- Challenges of Evaluation Science of measuring return on investments in corporate social initiatives is very young, with little historic data and expertise. Marketing professionals and academic experts in the field confirm this challenge. “…Since the benefits related to CSR are not directly measurable, and most firms do not disclose expenses related to such activities, it is difficult to directly assess the return on CSR investment…” (Sinha, Dev, and Salas) “…Rarely do firms fully assess a cause marketing alliance and its potential impact on both the for-profit and the nonprofit entities. Most for-profit businesses would be hard-pressed to document long-term business impact of their cause marketing campaigns and most nonprofits would have trouble pinpointing the value they bring to the partnership …..” (John Gourville and Kash Rangan)
  162. 162. Corporate Social Initiatives: Six Options for Doing Good
  163. 163. The Six Social Initiatives Cause Promotions Cause-Related Marketing Corporate Social Marketing Corporate Philanthropy Community Volunteering Socially Responsible Business Practices
  164. 164. 1. Cause Promotions The corporation may initiate and manage the promotion on its own (i.e., The Body Shop promoting a ban on the use of animals to test cosmetics) It may be a major partner in an effort (Aleve sponsoring the Arthritis Foundation’s fundraising walk) It may be one of several sponsors (Keep America Beautiful 2003 sponsors for the “Great American Cleanup” included Lysol, PepsiCo, and Firestone Tire & Service Centers, among others).
  165. 165. 2. Cause-Related Marketing A corporation commits to contributing or donating a percentage of revenues to a specific cause based on product sales. Most commonly this offer is: For an announced period For a specific product For a specified charity
  166. 166. 3. Corporate Social Marketing Corporation supports development and/or implementation of a behavior change campaign intended to improve: The distinguishing feature is the behavior change focus, which differentiates it from cause promotions that focus on supporting awareness, fundraising, and volunteer recruitment for a cause. • Public Health • Safety • Environment • Community Wellbeing.
  167. 167. 4. Corporate Philanthropy A corporation makes a direct contribution to a charity or cause, most often in the form of cash grants, donations, and/or in-kind services. This initiative is perhaps the most traditional of all corporate social initiatives and for many decades was approached in a responsive, even unplanned manner. Corporations are now experiencing pressures, both internally and externally, to move to a more strategic approach, choosing a focus and tying philanthropic activities to the company’s business goals and objectives
  168. 168. 5. Community Volunteering A corporation supports and encourages employees, retail partners, and/or franchise members to volunteer their time to support local community organizations and causes. This activity may be a stand-alone effort (i.e., employees of a high-tech company tutoring youth in middle schools on computer skills) It may be done in partnership with a nonprofit organization (Shell employees working with The Ocean Conservancy on a beach cleanup).
  169. 169. The Ocean Conservancy on a beach cleanup
  170. 170. 6. Socially Responsible Business Practices A corporation adopts and conducts optional business practices and investments that support social causes to improve community well-being and protect the environment. Initiatives may be conceived of and implemented by the organization (i.e., Kraft deciding to eliminate all in-school marketing) Initiative may be in partnership with others (Starbucks working with Conservation International to support farmers to minimize impact on their local environments).
  171. 171. Starbucks & Conservation International support farmers minimize impact local environments
  172. 172. DELL INC. Dell is a global company that delivers products and services in more than 190 countries and has more than 40,000 employees who live and work on six continents. Major products include enterprise computing products, desktops, monitors, printers, notebooks, handhelds, software,and peripherals.
  173. 173. Social Initiatives of DELL INC. Cause Promotions • Dell Recycle Cause-Related Marketing • Discounts for Recycling Online Corporate Social Marketing • Printer Recycling Corporate Philanthropy • Direct Giving Community Volunteering • Eco-Efficiency Team Socially Responsible Business Practices • Design for Environment Program
  174. 174. MCDONALD’S ORPORATION McDonald’s Corporation is among Fortune’s “Most Admired Companies” for social responsibility (2000–2002, 2004) and in 2001 was ranked in the Wall Street Journal as number five in reputation for corporate social responsibility.1
  175. 175. McDonals’s: We can not predict future, but we can help to shape it
  176. 176. McDonald’s Six CSR Initiatives Cause Promotions • International Youth Day Cause-Related Marketing • World Children’s Day Corporate Social Marketing • Immunize for Healthy Lives Corporate Philanthropy • Ronald McDonald House Charities Community Volunteering • Disaster Relief Socially Responsible Business Practices • Recycling
  177. 177. Ronald McDonald House Charity
  178. 178. Ahmad Thanin Thank you

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