MBA 750: BUSINESS ETHICS Nicos Rodosthenous PhD Lecture 5 14/7/20151Dr Nicos Rodosthenous

Business and Visionary Ethics 1. Corporate Social Responsibility (CSR) Definition of the CSR is about how companies manage the business processes to produce an overall positive impact on society. The World Business Council for Sustainable Development in its publication Making Good Business Sense by Lord Holme and Richard Watts, used the following definition: 14/7/20152Dr Nicos Rodosthenous

Business and Visionary Ethics Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. Companies need to answer to the two aspects of their operations. 14/7/20153Dr Nicos Rodosthenous

Business and Visionary Ethics 1. The quality of their management - both in terms of people and processes (the inner circle). 2. The nature of, and quantity of their impact on society in the various areas of Marketplace, Workplace, Community and Environment. Outside stakeholders are taking an increasing interest in the activity of the company. 14/7/20154Dr Nicos Rodosthenous

Business and Visionary Ethics 14/7/20155Dr Nicos Rodosthenous

Business and Visionary Ethics Most look to the outer circle - what the company has actually done, good or bad, in terms of its products and services, in terms of its impact on the environment and on local communities, or in how it treats and develops its workforce. Definitions as different as CSR is about capacity building for sustainable livelihoods and development. 14/7/20156Dr Nicos Rodosthenous

Business and Visionary Ethics It respects cultural differences and finds the business opportunities in building the skills of employees, the community. For example, the government from Ghana, through business to CSR is giving back to the society from the Philippines. Traditionally in the United States, CSR has been defined much more in terms of a philanthropic model. 14/7/20157Dr Nicos Rodosthenous

Business and Visionary Ethics Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving. (the purpose justifies the means). 14/7/20158Dr Nicos Rodosthenous

Business and Visionary Ethics The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in communities for solid business case reasons. This model is more sustainable because: 1. Social responsibility becomes an integral part of the wealth creation process - which if managed properly should enhance the competitiveness of business and maximize the value of wealth creation to society. 14/7/20159Dr Nicos Rodosthenous

Business and Visionary Ethics 2. When times get hard, there is the incentive to practice CSR more and better - if it is a philanthropic exercise and peripheral to the main business. The European Commission hedges its bets with two definitions wrapped into one: 1) A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. 14/7/201510Dr Nicos Rodosthenous

Business and Visionary Ethics 2) A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. The definition now focuses on the impact of how you manage your core business. Today's shoppers aren't just looking for the best price and quality — they expect the companies they patronize to do good with their dollars and make a positive impact on the world around them. 14/7/201511Dr Nicos Rodosthenous

Business and Visionary Ethics 14/7/201512Dr Nicos Rodosthenous

Business and Visionary Ethics Corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society. As consumers' awareness about global social issues continues to grow, so does the importance these customers place on CSR when choosing where to shop. 14/7/201513Dr Nicos Rodosthenous

Business and Visionary Ethics "Technology has brought global connectivity and enabled advocacy and awareness for social situations that were once obscure," said Alexis Magnan-Callaway, whose fashion company Pax Cult donates 10 percent of its profits to an organization of the customer's choice. Culthttp://paxcult.com/ It's not just about having a recycling program or sustainable products. 14/7/201514Dr Nicos Rodosthenous

Business and Visionary Ethics People want to feel good about what their dollar is doing in the world." [Social Responsibility Tips for Your Business][Social Responsibility Tips for Your Business] 2. Unique Examples of Corporate Social Responsibility Socially responsible business is at the core of Designed Good’s mission and we are closely following the discussion revolving around its steady growth. 14/7/201515Dr Nicos Rodosthenous

Business and Visionary Ethics We are especially interested in companies that utilize their tools to do good and realize that such actions are beneficial not only for society but, in the long run, for themselves as well. 3. Google, Microsoft or Disney receive much attention for their efforts and the Body Shop has a long-standing reputation for social sensibility.eceive much attention for their efforts Below, are some other brands you may know that are committed to doing good. 14/7/201516Dr Nicos Rodosthenous

Business and Visionary Ethics 14/7/201517Dr Nicos Rodosthenous

Business and Visionary Ethics 3.1 Costa Coffee Costa is a British coffeehouse chain that has branched out to Europe, the Middle East and Asia. Costa Coffee in India is taking big steps in their approach to employees. Since 2008, the company’s CSR program hires differently-able employees, including the speech and hearing.Since 2008, the company’s CSR program hires 14/7/201518Dr Nicos Rodosthenous

Business and Visionary Ethics Costa’s CSR initiative is benefits both those whose opportunities may have otherwise been limited. This program has been so successful that speech and hearing impaired employees account for 15% of company’s overall employee ratio, a number that the Costa plans to increase over the coming year. 14/7/201519Dr Nicos Rodosthenous

Business and Visionary Ethics 3.2 LinkedIn 14/7/201520Dr Nicos Rodosthenous

Business and Visionary Ethics Innumerable people log onto LinkedIn every day to search for employment opportunities and career advice. LinkedIn as a company, however, is giving its own employees a unique opportunity to give back and invest in themselves. One Friday each month employees participate in “InDay.” The purpose is to encourage the LinkedIn community to explore volunteer opportunities and allows different departments to unite for common causes. 14/7/201521Dr Nicos Rodosthenous

Business and Visionary Ethics Often the company also invites guest speakers discussing global issues, learning programs, volunteer experiences, and other topics. "The next generation of employees is seeking out employers that are focused on the triple bottom- line: people, planet and revenue," Cooney told Business News Daily. "Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back." 14/7/201522Dr Nicos Rodosthenous

Business and Visionary Ethics 4. Types of corporate social responsibility CSR can encompass a wide variety of tactics, from giving nonprofit organizations a portion of a company's profits, to giving away a product or service to a worthy recipient for every sale made.nonprofit organizations Here are just a few of the broad categories of social responsibility businesses are practicing: 14/7/201523Dr Nicos Rodosthenous

Business and Visionary Ethics 4.1. Environment: One primary focus of corporate social responsibility is the environment. Businesses, both large and small, have a large carbon footprint.environment Any steps to reduce them are considered both good for the company and the society as a whole Philanthropy: Businesses also practice social responsibility by donating to national 14/7/201524Dr Nicos Rodosthenous

Business and Visionary Ethics and local charities. Whether it involves giving money or time, businesses have a lot of resources that can benefit charities and local community programs Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with different labor laws than those in the United States. 14/7/201525Dr Nicos Rodosthenous

Business and Visionary Ethics Tom's Shoes, another notable example of a company with CSR at its core, donates one pair of shoes to a child in need for every pair a customer purchases. Tom's Shoes Starbucks has created its C.A.F.E. Practices guidelines, which are designed to ensure the company sources sustainably grown and processed coffee by evaluating the economic, social and environmental aspects of coffee production. Starbucks 14/7/201526Dr Nicos Rodosthenous

Business and Visionary Ethics Creating Shared Value There is another approach that is gaining increasing corporate responsibility interest. This is called Creating Shared Value, or CSV. The shared value model is based on the idea that corporate success and social welfare are interdependent. A business needs a healthy, educated workforce, sustainable resources and adept management to compete effectively. 14/7/2015Dr Nicos Rodosthenous27

Business and Visionary Ethics For society to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues, and opportunities for philanthropy. CSV received global attention in the Harvard Business Review article Strategy & Society: “The Link between Competitive Advantage and Corporate Social Responsibility”. The article provides insights and relevant examples of companies that have 14/7/2015Dr Nicos Rodosthenous28

Business and Visionary Ethics developed deep linkages between their business strategies and corporate social responsibility. 5. Concluding remarks: Taking socially responsible initiatives with your business is truly a win-win situation. Not only will your company appeal to increasingly socially conscious consumers and employees, but you'll also make a real difference in the world. 14/7/201529Dr Nicos Rodosthenous

Business and Visionary Ethics Keep in mind that in CSR, transparency and honesty about what you're doing are paramount to earning the public's trust. Corporate responsibility, corporate governance and corporate citizenship. Case study: The tobacco industry Business Ethics and Values Book, Page /7/201530Dr Nicos Rodosthenous