1. Corporate Social Responsibility
Chapter 4
Corporate Social Responsibility
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2. Learning Outcomes
Describe and explain corporate social responsibility (CSR)
Distinguish between instrumental and social contract approaches to CSR
Explain the business argument for “doing well by doing good”
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3. Learning Outcomes (continued)
Summarize the five driving forces behind CSR
Explain the triple bottom-line approach to corporate performance measurement
Discuss the relative merits of carbon-offset credits
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4. Corporate Social Responsibility (CSR)
Actions of an organization targeted toward the achievement of a social benefit over and above maximizing profits for its shareholders and meeting all its legal obligations
Also known as corporate citizenship and corporate conscience
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5. Approaches to CSR
Instrumental approach: Perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs of its customers
Social contract approach: Perspective that a corporation has an obligation to society over and above the expectations of its shareholders
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6. Impact of Corporation Actions
Actions of corporations impact:
Customers
Employees
Suppliers
Communities
Can be positive or negative depending on the actions taken by the corporation
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7. Management by Inclusion
Going beyond generating profit attracts a lot of attention
Example - Alcohol manufacturers have a long-term perspective and spread awareness about drinking responsibly
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8. The Driving Forces behind CSR
Transparency
Knowledge
Sustainability
Globalization
Failure of the public sector
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9. CSR Risks
Corporations experimenting with CSR initiatives run the risk of creating adverse results
Employees feel that they are working for an insincere organization
Public sees little more than a token action concerned with publicity rather than community
Organization does not perceive much benefit from CSR and sees no need to develop the concept
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10. Triple Bottom Line
Adaptation of annual reports to reflect a triple bottom-line approach is a testament of how seriously companies are taking CSR
They provide social and environmental updates alongside their primary bottom-line financial performance
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11. Types of CSR
Organizations pursue a defined sense of social conscience in managing their:
Financial responsibilities to shareholders
Legal responsibilities to local community and society as a whole
Ethical responsibilities to do the right thing for all their stakeholders
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12. Carbon Footprint Total carbon dioxide emissions on an annual basis
Kyoto Protocol requires developed nations to reduce their greenhouse gas emissions by funding projects in developing countries in return for carbon credits
Purchasing credits from carbon-positive projects can result in operations being made carbon neutral
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.