Globalization Sustainability CSR T. L. Ceranic

“Business has become, in the last half century, the most powerful institution on the planet. The dominant institution in any society needs to take responsibility for the whole…Every decision that is made, every action that is taken, must be viewed in light of that kind of responsibility.” -D.C. Korten

Iron Law of Responsibility: In the long run, those who do not use power in ways society considers responsible will lose T. L. Ceranic

CSR vs. Citizenship  Corporations should be held accountable for any actions that affect people, their communities, and the environment: Academic  The corporation recaptures its rightful place in society, next to other “citizens” with whom the corporation forms a community: Practitioner-driven

T. L. Ceranic Legal requirements vs. CSR/CC  Laws and regulations are enacted to ensure socially responsible conduct by business  Businesses that comply with the laws are meeting MINIMUM levels of CSR  CSR is bringing corporate behavior up to a level where it is in congruence with currently prevailing social norms

T. L. Ceranic Roots of CSR  Turn of 20 th century  Corporations were being accused of being too big, powerful, anticompetitive, and antisocial  Carnegie/Ford/Rockefeller  Shift in 1920s again Community Chest movement

CSR pyramid

T. L. Ceranic

Good Deeds T. L. Ceranic

What about Corporate Responsibility? approach to Corporate Responsibility Ethics Policy & Code Ethical Values underpin…. CSR Programme doing things ethically doing ethical things

Are there different approaches? Test question: Who deals with business conduct in the organisation? Risk Corporate Affairs Company Secretary Board committee HR, CR Internal audit Ethics Officer Legal dept Compliance What is the right thing to do? UK/EuropeUSA The decision is ….. Values basedCompliance with Rules T. L. Ceranic

Forms of CSR  Stewardship Principle: TimberlandTimberland  Charity Principle  Shareholder view

CSR: All grown up  Multiple stakeholder view!  Philanthropy and community involvement: Sophisticated partnerships Sophisticated partnerships  Social auditing T. L. Ceranic

Current hallmarks of CSR  Rapid development  Gradual regulatory support  Growing corporate enthusiasm, right? T. L. Ceranic

Who cares?  Stakeholders!  Especially in a down economy: consumers = risk averse Risk averse consumers are 50 percent more likely to agree that companies have a duty to be socially responsible and support the communities in which they operate (Microfinance Monitor: September 21, 2011) T. L. Ceranic

How to do it well Technology Ethics Strategy Idyllic ImprudentIrresponsible

Companies spend millions of dollars every year on corporate social responsibility; they invest in programs to support local communities, give away products to support people in need, invest in clean technology to lower their environmental footprint, donate money from sales, and engage their employees in nonprofit work. But many are mismanaging their CSR investments. T. L. Ceranic

CSR Sweet Spot T. L. Ceranic

Triple bottom line T. L. Ceranic

Companies need to reassess how to spend their money if they want to improve their return on investment. “You don’t do CSR for the sake of CSR. You do CSR as part of your reputation management strategy to drive business growth, customer loyalty, and employee alignment.” Only a few companies get it right. T. L. Ceranic

How to enact CSR/CC  Social performance audits Benchmarks: mission statement + other organizations Global benchmarks are available  Social/environmental reports Social/environmental reports T. L. Ceranic

Who’s CSR? T. L. Ceranic

# 6-10  Daimler (Mercedes-Benz)  Volkswagen  Sony  Colgate-Palmolive  LEGO Group T. L. Ceranic

Who do you see doing a good job with CSR? T. L. Ceranic

CSR as for-profit foundation

Should consumers have to do something for the CSR to happen? T. L. Ceranic

Does it matter why they do it? T. L. Ceranic

CSR/CC issues  Encroaches on what the government should be doing  It is a sideshow  Involves playing with other people’s $  Imposes unequal costs among competitors  Imposes hidden costs passed on to stakeholders  Requires social skills business may lack  Places responsibility on business rather than individuals  Corporate “citizens” normally assume their role only if it is in their self-interest to do so T. L. Ceranic

CSR/CC benefits  Balances corporate power with responsibility  Discourages government regulations  Promotes long-term profits for business  Responds to changing stakeholder demands  Corrects social problems caused by business

CSR/CC questions…  Is CSR/CC a good thing for business and society as a whole?  Has CSR/CC simply come to be expected?  Is CSR/CC just “a smug form of PR?” T. L. Ceranic