CSR is an increasingly important topic for business students. This revision presentation explains the basic theory behind CSR and outlines the main arguments for and against implementing CSR. Various case studies are also provided together with links to further research.

1. Corporate
Social
Responsibility

2. What is
CSR?

3. A possible problem for students
There is no single accepted
definition of CSR, which
cause confusion about what
constitutes a CSR activity

4. The EU definition!
“a concept whereby companies
integrate social and environmental
concerns in their business operations
and in their interaction with their
stakeholders on a voluntary basis”
Source: European Commission (2010) – Corporate Social Responsibility

5. CSR is called different things…
Corporate Sustainable
Citizenship Business
Corporate Social
Responsibility Responsibility
Corporate
Sustainability

6. The basic questions at
the heart of CSR are as
old as business itself

7. What
What is contribution
business should it make
for? to society?
1 2

8. CSR is based on the concept of interdependence
Society needs Business needs
Business Society
Employment &
Create demand
wages
Investment & Public assets &
innovation infrastructure
Profits and taxes Legal protection
Interdependence of Business & Society

9. Society’s needs are huge
Better
Nutritio
n Financia
Better
l
Health Protect Security
Environ-
Help the ment Protect
Consumer
Ageing s
A threat or an opportunity for business?

10. The new role for CSR?
In today’s world where business
has become global but
governments have remained local,
companies have to bear the social
responsibility for their actions.

11. The debate on social responsibility
• Not all business organisations behave in
a socially responsible manner
• Some argue that it is not the job of
businesses to be concerned about social
issues and problems
• Two schools of thought:
– Free market view: the job of business is to
create wealth for shareholders
– Corporate social responsibility view: business
should be concerned with social issues

13. Contractual
Stakeholders
Employees Suppliers Customers
Have a legal relationship with a business

14. The corporate responsibility view
• Businesses do not have an unquestioned
right to operate in society
• Those managing business should recognise
that they depend on society
• Business relies on inputs from society and on
socially created institutions
• There is a social contract between business
and society involving mutual obligations that
society and business recognise that they have
to each other

15. Arguments for CSR
• It is the ethical thing to do
• It improves a business’ image and reputation
• It is necessary in order to avoid excessive
regulation
• Socially responsible actions can be profitable
• An improved social environment will be
beneficial to a business
• It will be attractive to some investors
• It can increase employee motivation
• It helps to corrects the social problems caused
by business

16. How firms can bring a focus to CSR
Source: McKinsey2010

17. Social responsibility to consumers
• Value for money • Product testing
• Product quality and safety • Responsible selling and
• Fair and honest promotion
advertising • Fair handling of
• After sales service complaints
• Country/place or origin • Labour rights in the
• Local sourcing supply chain
• Availability of information
• Sustainable products
to make informed
decisions

18. CSR in the workplace - issues
• Fair treatment at work
• Workforce diversity and equal opportunities
• Right to be kept informed
• Health and safety
• Work life balance / flexible working
• Opportunities for participation in decision-making
• Training in new skills
• Provision of social facilities
• Job design and satisfaction
• Working conditions
• Attitude to disadvantaged groups

19. CSR in the community - issues
• Minimising noise and other pollution
• Consultation about major change
• Sourcing from local suppliers
• Protecting local employment
• Labour rights in the supply chain
• Product health and safety
• Diversity in the workplace

20. CSR & the environment - issues
• Effects of pollution, noise, waste disposal,
congestion
• Waste management
• Chemical use
• Avoiding excessive packaging
• Use of energy
• Water consumption
• Biodiversity
• Carbon emissions

21. Why do firms engage in CSR now?
• Altruism – being a good citizen
• Window-dressing to appease stakeholders
• Contracting benefits – e.g. helps recruit, motivate and
retain employees
• Customer-related motivation: attract customers; brand
positioning
• Reduction in production costs (packaging, energy
usage)
• Risk management – address potential legal or
regulatory action
• Improve access to capital – ethical investment funds

22. The Theory
The Case Against CSR

23. Shareholder
Value Theory

24. “The
business of
business…
is business”
Milton
Friedman

25. “…the only one
responsibility of business
towards the society is the
maximisation of profits
to the shareholders,
within the legal
framework and the
ethical custom of the
country”

26. “Even in these uncertain Jack Welch
Former Chairman
times, every company & CEO GE
should practice good
corporate citizenship. But
they also need to face the
reality that you first have
to make money before
you can give it away.”
away

27. The case against CSR
• The only social responsibility of business is
to create shareholder wealth
• The efficient use of resources will be
reduced if businesses are restricted in how
they act
• Businesses cannot decide what is in society’s
interest
• Extra costs will be incurred which must be
passed on to consumers
• CSR stifles innovation

28. Some results of this approach?
• Growing global competition on price
• Short-term performance pressures
from shareholders
• Constant restructuring & downsizing
• Relocation to low-cost regions
• Commoditisation

29. The Theory
The Case for CSR

30. Corporate social responsibility means…
• Conducting business in an ethical way and in
the interests of the wider community
• Responding positively to emerging societal
priorities and expectations
• A willingness to act ahead of regulatory
confrontation
• Balancing shareholder interests against the
interests of the wider community
• Being a good citizen in the community

31. Is CSR the same as business ethics?
• Clearly an overlap
• Both concern values ,objectives and
decisions based on something other than
the pursuit of profit
• Socially responsible firms must act ethically
• The difference:
– Ethics concern actions which can be assessed as
right or wrong by reference to moral principles
– CSR is about the organisation’s obligations to all
stakeholders – and not just shareholders

32. Ethical Stance of a Business
The extent to which a
business will exceed its
minimum obligations to
stakeholders and society at
large

33. CSR has changed in the last 10 years
2000 2012…
CSR was a CSR is an
moral issue Strategic / profit
“We want to do the
issue
right thing; we want to “Ignoring CSR potentially
invest in the damages shareholders.
community” Embracing it creates
value”

34. What
Society
Expects
What
Society
Requires

35. “CSR” has been
around for a
long time

36. The original aims of CSR
Make employees healthier
& more productive…

37. …and
philanthropy

38. Why was 1982 so important for
CSR in the UK?
Lead to the formation of
Business in the Community

39. What happened in 1995?

40. CSR influenced by the rise of activist NGOs

42. Source: Kotler & Lee, 2005

43. Cause
Promotion
Source: Kotler & Lee, 2005

44. Source: Kotler & Lee, 2005

45. Socially
responsible
business
practices
Source: Kotler & Lee, 2005

46. Prof Michael Porter
CSR turns into CSV
Creating
Shared
Value

47. Creating Shared Value (CSV)
Companies can create economic
value (profit) by creating
societal value
Advanced Developing
Economies Economies

48. Porter on CSR
“The capitalist system is under siege. In recent years
business has been viewed as a major cause of social,
environmental and economic problems. Companies are
widely perceived to be prospering at the expense of the
broader community…
The legitimacy of business has fallen, leading to a
diminished trust in business”
Source: Creating Shared Value; Porter & Kramer, HBR, 2010

49. Creating Shared Value (CSV)
Advanced
Economies
Demand for products & services that meet societal
needs is rapidly growing
Healthier fast Fair Energy
food trade efficient

50. Creating Shared Value (CSV)
Developing
Economies
5 billion people living on less than $2 per day

51. How CSV Differs from CSR
Source: The Big Idea: Creating Shared Value, Porter & Kramer,
Harvard Business Review, 2010

52. CSR in Business Strategy

53. CSR into strategy?
What percentage of Global CEOs are
planning to change strategies in the next
three years because they expect
stakeholders to factor companies’
environmental and corporate
responsibility practices into purchasing
decisions.
Source: PwC’s Annual Global CEO Survey 2011

54. CSR into strategy
Source: PwC’s Annual Global CEO Survey 2011

55. But CSR is often peripheral to a firm’s
corporate objectives
One problem is that firms manage their
CSR functions too narrowly, often within
the marketing or investor relations
department. CSR is therefore managed
tactically and tends to operate at a
distance from strategic decision-making
Source: McKinsey Quarterly 2010

56. Sources of CSR Case Studies

57. CSR in action - BITC
http://www.bitc.org.uk/

58. Case studies in CSR excellence
http://www.bitc.org.uk/awards_for_excellence/case_studies/index.h

59. More CSR Examples
http://www.article13.com/csr/CBI_csrcasestudies.asp

60. Quotes on CSR (1)
Niall Fitzgerald
"Corporate social
Former CEO,
responsibility is a hard- Unilever
edged business decision.
Not because it is a nice
thing to do or because
people are forcing us to do
it... because it is good for
our business"

61. Quotes on CSR (2)
Dame Anita
“The business of business Roddick
Body Shop
should not be about
money, it should be
about responsibility. It
should be about public
good, not private greed”

62. Quotes on CSR (3)
Warren Buffett
“It takes 20 years Berkshire
Hathaway
to build a
reputation and
five minutes to
ruin it.”

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