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Objectives 1. A thorough understanding of the term corporate social responsibility. 2. An ability argue both for and against the assumption of social responsibilities by business. 3. Useful strategies for increasing the social responsiveness of an organization. 4. Insights into the planning, organizing, influencing, and controlling of social responsibility activities. 5. A practical plan for how society can help business meet its social obligations.
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Corporate Social responsibility, is the managerial obligation to take action that protects and improves both the welfare of the society as a whole and the interests of the organization. According to concept of S.R. a manager must strive to achieve societal as well as organizational goals.
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The amount of attention given to the area of S. R
The amount of attention given to the area of S.R. by both management and society has increased in recent years and probably will continue to increase. We will present the fundamentals of social responsibility of business by discussing these topics; 1 -The Davis model of corporate social responsibility 2- Areas of corporate social responsibility 3- Varying opinions on social responsibility 4- Conclusions about the performance of social responsibility activities by business
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The Davis Model of Corporate Social Responsibility
A generally accepted model of corporate social responsibility was developed by Keith Davis. Proposition 1: Social responsibility arises from social power: business has a significant amount of influence on, or power over, such critical social issues as minority employment and environmental pollution.
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P2. Business shall operate as a two-way open system, with open receipt of inputs from society and open disclosure of its operations to the public: business must be willing to listen to what must be done to sustain or improve societal welfare. In turn, society must be willing to listen to business reports on what it is doing to meet its social responsibilities. P3. : the social costs and benefits of an activity, products, or service shall be thoroughly calculated and considered in deciding whether to proceed with it. technical feasibility and economic profitability are not the only factors, consider both long and short term societal consequences
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P4. social costs related to each activity, product, or service shall be passed on to the consumer.
The cost of maintaining socially desirable activities within business should be passed on to consumers through higher prices for the goods or services related to these activities. P5. business institutions, as citizens, have the responsibility to become involved in certain social problems that are outside their normal areas of operation. if a business possesses the expertise to solve a social problem with which it may not be directly associated, it should be held responsible for helping society solve that problem
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Areas of Corporate S.R. : Going green
Areas that can act to protect and improve the welfare of the society are numerous and diverse. urban affairs, consumer affairs, community volunteerism employment practices. The one area that is arguably receiving the most recent attention is the area of ecology conservation, popularly called “going green” United Nations, is currently underway and growing to get large companies to start thinking seriously about ecosystems and how to maintain them. E.g. NATURE FRIENDLY PRODUCTS. Pressure groups also forcing companies to go green.
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Conclusion about the performance of S.R. activities by business
Regardless of which argument particular managers embrace, they generally should make a concerted effort to do following. 1-Performing Required S.R. Activities 2-Voluntarily Performing S.R. Activities 3-Communicating the Degree of S.R. Involvement
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Performing Required S.R. Activities
In some countries legislation requires that business perform certain social responsibility activities. The Environmental Protection Agency, has the authority to require businesses to adhere to certain socially responsible environmental standards.
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Fundamentals of Social Responsibility (S.R.)
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Voluntarily Performing Social Responsibility Activities
Following the legislation is the minimum standard of social responsibility performance that business managers must achieve Managers must ask themselves, however, how far beyond the minimum they should go. It entails assessing the positive and negative outcomes of performing social responsibility activities over both the short and long term and then performing only those activities that maximize management system success because while making a desirable contribution to the welfare of society. Events at Sarah Lee Bakery, employees developed carpal tunnel syndrome, debilitating wrist disorder caused by repeated hand motions. Design tools to alleviate the problem.
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Communicating the Degree of S.R. involvement
Determining the extent to which a business should perform S.R. activities beyond legal requirements is a subjective process. however, Manager should have a well-defined position in this vital area and should inform all organization members of that position.
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Fundamentals of Social Responsibility (S.R.)
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Management Approaches
S. Prakash Sethi presents three management approaches to meeting social obligations. 1- Social Obligation Approach, for example, considers business as having primarily economic purposes and confines social responsibility activity mainly to existing legislation. 2- Social Responsibility Approach, sees business as having both economic and societal goals. 3- Social Responsiveness Approach, considers business as having both societal and economic goals as well as the obligation to anticipate potential social problems and work actively toward preventing their occurrence.
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Social Responsibility Activities and Management Functions
We will consider social responsibility as a major organizational activity subject to the same management techniques used in other major organizational activities, such as production, personnel, finance, and marketing. Managers have known for some time that to achieve desirable results in these areas, they must be effective in planning, organizing, influencing, and controlling. Achieving social responsibility results is no different. We will discuss planning, organizing, influencing, and controlling of social responsibility activities.
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Planning Social Responsibility Activities
It is, as the process of determining how the organization will achieve its objectives, or get where it wants to go. then involves determining how the organization will achieve its social responsibility objectives or get where it wants to go in the area of social responsibility. - Organization’ Overall planning process. - Social responsibility policy can be converted to into action.
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Organizing Social Responsibility (S.R.) Activities
Organizing for social responsibility activities entails establishing for all organizational resources logical uses that emphasize the attainment of the organization’s social objectives and that are consistent with its social responsibility plans. it has primary responsibility in the area of societal affairs and oversees the related activities of numerous individuals
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Influencing Individuals Performing S.R. Activities
then, influencing is the process of guiding the activities of organization members to help attain organization’s social responsibility objectives More specifically, managers must lead, communicate, motivate and work with groups in ways that result in the attainment of the organization’s social responsibility objectives.
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Controlling Social Responsibility Activities
It is making things happen as they were planned to happen. To control, managers assess or measure what is occurring in the organization and, if necessary, change these occurrences in some way to make them conform to plans. Controlling in the area social responsibility entails the same two major tasks; - Areas of measurement - Social Audit
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Areas of Measurement All companies however, should take social responsibility measurements in at least the following four major areas: 1-The economic function area, a measurement should be made of whether the organization is performing such activities as producing goods and services that people need, creating jobs, paying fair wages, and ensuring worker safety.
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2-The quality of life area-
the measurement of quality of life should focus on whether the organization is improving or degrading the general quality of life in society. Producing high-quality goods, dealing fairly with employees and customers, 3-The social investment area- the degree to which the organization is investing both money and human resources to solve community social problems. Here, the organization could be involved in assisting community organization dedicated to education, charities, and the arts.
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4- The problem-solving area- the measurement of problem solving should focus on the degree to which the organization deals with social problems, such as participating in long-range community planning and conducting studies to pinpoint social problems. The Social Audit: A Progress Report . social audit is the process of measuring the present social responsibility activities if an organization to assess its performance in this area. The basic steps in conducting a social audit are; monitoring, measuring, and appraising all aspects of an organization’s social responsibility performance.
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HOW SOCIETY CAN HELP BUSINESS MEET SOCIAL OBLIGATIONS
There must be an open and honest involvement of both business and society in order for business to meet desirable social obligations. We will emphasize actions that society should take to help business accomplish its social responsibility objectives. Jeffry McAfee, board chair and CEO of Gulf Oil Corporation, says that although business has some responsibilities to society, society also has the following responsibilities to business;
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1.Set rules that are clear and consistent
2. Keep the rules technically feasible 3. Make sure the rules are economically feasible 4. Make the rules prospective, not retroactive 5. Make the rules goal-setting, not procedure-prescribing; Tell us what you want made, but don’t tell us how to make it. Tell us the destination we’re seeking, but don’t tell us how to get there
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BUSINESS ETHICS As a branch of philosophy, ethics investigates the questions "What is the best way for people to live?" and "What actions are right or wrong in particular circumstances. (Wikipedia) How we behave, how we treat each other, about the standards we hold ourselves to... What we do day to day in our life... Business Ethics, the study of standards of business behavior which promote human welfare... The movement to include the study of ethics as a critical part of management education began in the 1970’s, grew significantly in the 1980s, and is expected to continue growing in the twenty-first century.
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A Definition of Ethics Golden Rule: Do unto others as you would have them do unto you. Ethical managers strive for success within the confines of sound management practices that are characterized by fairness and justice.
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Business Ethics The employment of ethical business practices can enhance overall health in three important areas; 1- productivity; When management is resolved to act ethically toward stakeholders, then employees will be positively affected. Example of EAP’s Employee Advisory Programs 2- stakeholder relations; 2nd area positively affecting “outside” stakeholders such as suppliers and customers. A positive public image can attract customers who view such an image as desirable. 3- government regulation; it may help in minimizing government regulations. Where companies are believed to be acting unethically, the public is more likely to put pressure on legislators
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Creating an Ethical Workplace
Managers commonly strive to encourage ethical practices, not only to be morally correct, but to gain whatever business advantage lies in projecting an ethical image to consumers and employees. Creating, distributing, and continually improving a company’s code of ethics is one common step managers can take to establish an ethical workplace. Another step many companies are taking to create an ethical workplace is to appoint a chief ethics officer. Another way to promote ethics in the workplace is to furnish organization members with appropriate training.
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Business Ethics
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? Questions
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