Csr

1. Corporate Social Responsibility
(CSR)
Preliminary definitions of CSR
Introduction to Corporate Social • The impact of a company’s actions on society
Responsibility • Requires a manager to consider his acts in
(CSR) terms of a whole social system, and holds him
responsible for the effects of his acts
anywhere in that system
Corporate Social Responsibility (CSR)
Corporate Social Responsibility
Business Criticism/ Social Response Cycle
(CSR) Factors in the Societal Environment
Corporate Citizenship Concepts Criticism of Business
• Corporate social responsibility – emphasizes Increased concern A Changed
for the Social Environment
obligation and accountability to society Social Contract
• Corporate social responsiveness – emphasizes Business Assumption of Corporate Social Responsibility
action, activity Social Responsiveness, Social Performance, Corporate Citizenship
• Corporate social performance – emphasizes A More Satisfied Society
outcomes, results Fewer Factors Leading Increased Expectations Leading
to Business Criticism to More Criticism
Corporate Social Responsibility Corporate Social Responsibility
(CSR) (CSR)
Historical Perspective Historical Perspective
• Economic model – the invisible hand of the • Modified the economic model
marketplace protected societal interest – Philanthropy
• Legal model – laws protected societal interests – Community obligations
– Paternalism

2. Corporate Social Responsibility Corporate Social Responsibility
(CSR) (CSR)
Historical Perspective
Historical Perspective From the 1950’s to the present the concept
• What was the main motivation? of CSR has gained considerable acceptance
– To keep government at arms length and the meaning has been broadened to
include additional components
Corporate Social Responsibility Corporate Social Responsibility
(CSR) (CSR)
Evolving Viewpoints
Evolving Viewpoints
• CSR considers the impact of the company’s
actions on society (Bauer) • CSR mandates that the corporation has not
only economic and legal obligations, but also
• CSR requires decision makers to take actions certain responsibilities to society that extend
that protect and improve the welfare of
beyond these obligations (McGuire)
society as a whole along with their own
interests (Davis and Blomstrom)
Corporate Social Responsibility Corporate Social Responsibility
(CSR) (CSR)
Evolving Viewpoints Carroll’s Four Part Definition
• CSR relates primarily to achieving outcomes from • CSR encompasses the economic, legal, ethical
organizational decisions concerning specific issues
and discretionary (philanthropic) expectations
or problems, which by some normative standard
have beneficial rather than adverse effects upon
that society has of organizations at a given
pertinent corporate stakeholders. The normative point in time
correctness of the products of corporate action have
been the main focus of CSR (Epstein)

3. Corporate Social Responsibility (CSR)
Pyramid of CSR
Carroll’s Four Part Definition
Understanding the Four Components
Responsibility Societal Examples
Expectation
Economic Required Be profitable. Maximize sales,
minimize costs, etc.
Legal Required Obey laws and regulations.
Ethical Expected Do what is right, fair and just.
Discretionary Desired/ Be a good corporate citizen.
(Philanthropic) Expected
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
2-16
Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR)
Stakeholder View
CSR in Equation Form Is the Sum of: Stakeholder Group Addressed and Affected
Economic Responsibilities (Make a profit) CSR Owners Con- Employees Community Others
Component sumers
Legal Responsibilities (Obey the law)
Economic 1 4 2 3 5
Ethical Responsibilities (Be ethical)
Legal 3 2 1 4 5
Philanthropic Responsibilities (Good corporate citizen)
CSR Ethical 4 1 2 3 5
Philanthropic 3 4 2 1 5
Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR)
Arguments Against Arguments For
• Restricts the free • Increase business • Addresses social issues • Limits future government
market goal of profit power business caused and intervention
maximization allows business to be • Addresses issues by using
• Limits the ability to part of the solution
• Business is not business resources and
compete in a global • Protects business self- expertise
equipped to handle
social activities marketplace interest • Addresses issues by being
• Dilutes the primary proactive
aim of business

4. Corporate Social Responsibility (CSR) Corporate Social Responsiveness
Business Responsibilities in the 21st Century
• Demonstrate a commitment to society’s values and Evolving Viewpoints
contribute to society’s social, environmental, and
economic goals through action. • Ackerman and Bauer’s action view
• Insulate society from the negative impacts of • Sethi’s three stage schema
company operations, products and services.
• Frederick’s CSR1, CSR2, and CSR3
• Share benefits of company activities with key
stakeholders as well as with shareholders. • Epstein’s process view
• Demonstrate that the company can make more
money by doing the right thing.
Corporate Social Performance Corporate Social Performance
Carroll’s CSP model integrates economic concerns
into a social performance framework
Extensions and Reformulations
• Wartick and Cochran’s extensions
• Wood’s reformulations
• Swanson’s Reorientation
Corporate Social Performance
Corporate Social Performance
Nonacademic Research
• Fortune's ranking of most and least admired
corporations
• Council on Economic Priorities Corporate
Conscience Awards
• Business Ethics Magazine Awards
• WalkerInformation’s Research on the impact
of social responsibility

5. Corporate Citizenship Social—and Financial—Performance
Perspective 1: CSP Drives the Relationship
Corporate citizenship embraces all the facets of Good Corporate
Social Performance
Good Corporate
Financial
Good Corporate
Reputation
Performance
corporate social responsibility, responsiveness
and performance Perspective 2: CFP Drives the Relationship
Good Corporate Good Corporate
Good Corporate
Financial Social
Reputation
Performance Performance
Perspective 3: Interactive Relationship Among CSP, CFP, and CR
Good Corporate
Good Corporate Good Corporate
Financial
Social Performance Reputation
Performance
Social and Financial Performance Socially Conscious or Ethical
A Multiple Bottom-Line Perspective Investing
Social screening is a technique used to
screen firms for investment purposes
Selected Key Terms
• Business for Social • Economic, legal, ethical
Responsibility and discretionary
• Community obligations responsibilities
• Corporate Citizenship
• Paternalism
• Corporate social
responsibility Corporate • Philanthropy
social responsiveness • Pyramid of CSR
• Corporate social • Socially conscious
performance
investing