CORPORATE SOCIAL RESPONSIBILITY (CSR)

Definitions and Relationships Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done” Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior

Recent Evidence of CSR Interest An Internet search turns up 15,000 plus response to “corporate citizenship” Journals increasingly “rate” businesses (and NGOs) on socially responsive criteria: Best place to work Most admired Best (and worst) corporate reputation

Reasons for CSR Activities CSR activities are important to and even expected by the public And they are easily monitored worldwide CSR activities help organizations hire and retain the people they want CSR activities contribute to business performance

Maximize firm’s profits to the exclusion of all else Balance profits and social objectives Do what it takes to make a profit; skirt the law; fly below social radar Fight social responsibility initiatives Comply; do what is legally required Integrate social objectives and business goals Lead the industry and other businesses with best practices Do more than required; e.g. engage in philanthropic giving Articulate social value objectives Corporate Social Responsibility Continuum

CSR are Grounded by Opposing Objectives (Maximize Profits to Balance Profits with Social Responsibility) and so Activities Range Widely Do what it takes to make a profit; skirt the law; fly below social radar Fight CSR initiatives Comply with legal requirements Do more than legally required, e.g., philanthropy Articulate social (CSR) objectives Integrate social objectives and business goals Lead the industry on social objectives

Businesses CSR Activities Philanthropy give money or time or in kind to charity Integrative philanthropy—select beneficiaries aligned with company interests Philanthropy will not enhance corporate reputation if a company fails to live up to its philanthropic image or if consumers perceive philanthropy to be manipulative