Copyright © 2008 McGraw-Hill Ryerson Ltd.1 Chapter Eight Corporate Social Responsibility: In Practice

Chapter Outline Review of Chapter Seven Responses to Corporate Social Responsibility Planning for CSR Trends and Concerns in Corporate Giving Corporate Voluntarism and Sponsorship Social Venture Philanthropy (SVP) Social Enterprise and Entrepreneurship Small Business and CSR Contemporary CSR: Investment and Involvement Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.2

Review: Social Responsibility Theories 1. Amoral view 2. Personal view 3. Social view ◦ Social Contract ◦ Stakeholders ◦ Social Impact Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.3

Review: CSR Concepts Corporate Sustainability (CS) ◦ Activities Reputation Management ◦ Image Social Impact Management ◦ Interdependency Triple-E Bottom Line (TBL) ◦ Measurment Corporate Citizenship ◦ Self Interest Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.4

New Approach to Corporate Citizenship Limited ◦ Obligation ◦ Focus on corporate giving Equivalent ◦ Expectations ◦ Emphasis on sustainability Extended ◦ Rights ◦ Defined as a set of individual, social, civil, and political rights Chapter 7 Copyright © 2008 McGraw-Hill Ryerson Ltd.5 Source: Matten and Crane, 2005

Responses to Corporate Social Responsibility Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.6 Anti-CSRAmoralGreenwash Corporate Giving Corporate Volunteerism Social Venture Philanthropy Social Enterprise (for-profit) Social Enterprise (nonprofit)

Planning for CSR Plan ◦ Conduct CSR assessment ◦ Develop a CSR strategy Do ◦ Develop CSR commitments ◦ Implement CSR commitments Check ◦ Verify and report on progress Improve ◦ Evaluate and improve Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.7 Source: Industry Canada, 2006

Corporate Philanthropy: Definition The effort of business to contribute to society socially, manifested by donations of money or goods and services in kind, voluntarism (where corporate employees work for social causes), and sponsorship of events that contribute to society. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.8

3 Types of Corporate Philanthropy 1. Corporate Giving ◦ Cause-Related Marketing ◦ Strategic Giving 2. Corporate Volunteerism 3. Corporate Sponsorship Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.9

Arguments For Corporate Giving Means to express CSR to community Promotes image of good citizenship Business benefits from volunteer sector Benefits from corporate community investment program Company’s success linked to community’s health Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.10

Arguments Against Corporate Giving Funds given belong to shareholders Social welfare is the job of government Corporation might become accountable for actions of charity No guidelines or standards to measure, evaluate, or monitor corporate giving Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.11

Trends and Concerns in Corporate Giving Social Legitimacy: Gained by conforming to society’s norms and expectations. ◦ Can be improved through association. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.12

Trends and Concerns in Corporate Giving Pressure to become businesslike ◦ Efficient ◦ Reduce administration costs ◦ Produce return  Calculate return-on-investment ◦ Accountability Might move charities away from their mission Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.13

Trends and Concerns in Corporate Giving Cause-related marketing: The purchase of a particular product results in a donation being made by a corporation to a non- profit organization’s program. Concerns: ◦ Charities are selected based on opinion polls not need ◦ The ratio of amount donated vs. amount spent on marketing ◦ May encourage donors not to give to those charities Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.14

Trends and Concerns in Corporate Giving Strategic giving: An attempt to rationalize the shareholder interests with corporate philanthropy whereby the corporation benefits directly from the funds given. ◦ Synergy is necessary in partnerships (win-win) ◦ Enlightened self-interest Concerns: ◦ Controversial nonprofit organizations will be left out Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.15

2. Corporate Voluntarism Definition: The time and talent employees commit to community organizations with support and / or consent from employers who recognize the value of such efforts to society. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.16

2. Corporate Voluntarism Forms of support ◦ Providing facilities, allowing time off, assisting with personal expenses incurred while undertaking voluntary activities, special recognition to employees Corporate policies regarding voluntarism ◦ Encouraging – positive atmosphere ◦ Enabling – policies to help employees volunteer ◦ Promoting – encourage and reward volunteering Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.17

3. Corporate Sponsorship A partnership which has been established for mutual benefit between a business sponsor and an event or a non-profit. Examples: sports, cultural, and educational events, literacy, religious, race relations, drug abuse, environmental issues, etc. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.18

Social Venture Philanthropy The investment of human and financial resources by corporations in non-profit community development agencies to generate a social return instead of only a financial one. Also known as social venturing, the new philanthropy, and high-engagement philanthropy. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.19

Social Enterprise A model of business operation where some or all profits are deliberately used to further social aims. Two types: (1) non-profit enterprises that contribute all profits to social initiatives (e.g., Value Village thrift stores); (2) for-profit enterprises that divide profits between social initiatives and shareholders (e.g., The Body Shop) Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.20

Social Entrepreneurship An innovative, visionary leader of a non- profit with real-world problem-solving creativity and a high awareness of ethical considerations. Also referred to as philanthrocapitalism. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.21

Small Business and CSR Challenges: ◦ Entrepreneurs do not have time ◦ Expenses involved ◦ Lack of knowledge of CSR planning Typical issues for small business: ◦ underground economy; misleading advertising and financial reporting; improper gift giving and receiving; tax evasion; nepotism. Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.22

Contemporary CSR: Investment and Involvement Community investment: The efforts of a corporation to help develop a community and create economic opportunities through a variety of means, from donations to direct involvement in commercial undertakings. Motivation may be based on: religious principles; making a difference in society; personal experience; giving something back; and self-interest (e.g., tax incentives and recognition) Chapter 8 Copyright © 2008 McGraw-Hill Ryerson Ltd.23