1. © 2014 Routledge, Inc., Taylor and Francis Group. All rights reserved. PowerPoint Presentation Design by Charlie Cook CHAPTER 4 Corporate Social Responsibility, Citizenship, and Diversity © Routledge

2. Learning Outcomes After studying this chapter, you should be able to: 1.Compare and contrast corporate social responsibility, citizenship, and social performance 2.List the reasons for and against corporate social responsibility 3.Characterize the three levels of corporate social responsibility 4.Describe the five stages of corporate citizenship 5.Compare the motivation and activity for corporate social responsibility (CSR) and corporate social performance (CSP) and the social audit 6.Describe the Equal Employment Opportunity Commission (EEOC) 7.Define key terms in the chapter.

3. The firm’s conscious effort (enlightened self-interest) to operate in a manner that balances all stakeholder interests. Includes the firm’s social responsibility, responsiveness, and performance. © Routledge Corporate Social Responsibility and Citizenship Corporate Social Responsibility (CSR) Corporate Citizenship

4. 1.Being socially responsible promotes business long-term self-interest. 2.CSR improves business value and reputation—public sentiment. 3.Society expects business to be socially responsible. 4.Business is responsible for correcting the social problems it causes. 5.CSR discourages government regulation. 1.Being socially responsible promotes business long-term self-interest. 2.CSR improves business value and reputation—public sentiment. 3.Society expects business to be socially responsible. 4.Business is responsible for correcting the social problems it causes. 5.CSR discourages government regulation. 1.A firm’s sole responsibility is to maximize profits while obeying the law. 2.The cost of CSR is passed on to stakeholders. 3.Less socially responsible competitors may gain a cost advantage. 4.A firm involved in social issues can lose focus on operating as effectively as possible. 5.Dealing with social problems is the job of the government, not business. 1.A firm’s sole responsibility is to maximize profits while obeying the law. 2.The cost of CSR is passed on to stakeholders. 3.Less socially responsible competitors may gain a cost advantage. 4.A firm involved in social issues can lose focus on operating as effectively as possible. 5.Dealing with social problems is the job of the government, not business. © Routledge Corporate Social Responsibility (CSR) Arguments for Social Responsibility Arguments against Social Responsibility

5. © Routledge Figure 4.1Arguments For and Against Corporate Social Responsibility

6. © Routledge Figure 4.2Levels of Corporate Social Responsibility Focus on profitability and going beyond the law to do what is right, just, and fair. Focus on maximizing profits while obeying the law. Ethical CSR Legal CSR Focus on profitability and helping society through philanthropy. Benevolent CSR

7. © Routledge An Overall Approach to CSR The Situational Approach to CSR Legal CSR Ethical CSR Benevolent CSR

8. © Routledge Figure 4.3Stages of Corporate Citizenship Stage 5. Transform Change the game (Unilever) Stage 4. Integrated Partnerships, triple bottom line (AT&T) Stage 3. Innovative Stakeholder management (Baxter and ABB) Stage 2. Engaged Philanthropy, social issues (Chiquita and Nestlé) Stage 1. Elementary Profit (GE)

9. © Routledge Benefits of Corporate Citizenship Enhanced reputation Awards and recognition Customer loyalty Better employee relations Advantages of CSR

10. © Routledge Stakeholders and the Triple Bottom Line Overall Performance of the Firm Financial Performance Social Performance Environmental Performance

11. © Routledge Corporate Social Performance (CSP) Assessing CSR and responsiveness CSP reporting and social audits Global social audit standards Socially responsible investing

12. Diversity DiversityDiversity  The degree of differences among members of a group or an organization. Protected classes/groupsProtected classes/groups  Groups legally protected by EEO laws from workplace discrimination include: race/ethnicity, gender, age, ability, religion, and others. The Equal Employment Opportunity Commission (EEOC)The Equal Employment Opportunity Commission (EEOC)  Created in 1964 as the major federal agency to administer and enforce job discrimination laws to provide equal employment opportunity for all. © Routledge

13. Discrimination in the Workplace Includes slurs, derogatory comments, or other verbal or physical abuse that creates an intimidating, hostile, or offensive work environment or interferes with an employee’s work performance. Occurs when any employee experiences unwelcome sexual advances or when on-the-job conditions are hostile or threatening in a sexual way. Workplace Harassment Sexual Harassment

14. © Routledge Figure 4.4Employment Laws and Executive Orders Law or Executive Order Description Equal Employment Opportunity Title VII of the Civil Rights Act of 1964 Prohibited discrimination in all areas of the employment relationship (hiring, compensating, promoting, discharging, and other aspects) based on race, religion, color, sex, or national origin. It also made racial and sexual harassment illegal. Civil Rights Acts of 1972, 1991Civil Rights Amendments provided possible compensation and punitive damages for discrimination. Equal Employment Opportunity Act of 1972 Gave greater power to the Equal Employment Opportunity Commission (EEOC) to combat discrimination. Executive Order 11246 of 1965— Affirmative Action Mandated affirmative action for all federal contractors and subcontractors to accelerate the movement of minorities into the workforce. Companies doing business with the government were given preferential treatment if they had set employment percentages and quotas for minorities.

15. © Routledge Figure 4.4Employment Laws and Executive Orders Law or Executive Order Description Equal Employment Opportunity (cont’d) Age Discrimination in Employment Act of 1967 Prohibited age discrimination against people older than 40 and restricted mandatory retirement. Rehabilitation Act of 1973 Prohibited discrimination based on physical or mental disability. Americans with Disabilities Act of 1990 (ADA) Strengthened the Rehab Act to require employers to provide “reasonable accommodations” to allow disabled employees to work and to provide access to facilities (ramps, elevators, rest rooms). ADA also required transportation systems and communication systems to facilitate access for the disabled.

16. © Routledge Figure 4.4Employment Laws and Executive Orders Law or Executive Order Description Compensation (salary and benefits) Equal Pay Act of 1963 Required that men and women be paid the same for substantially equal work. Pregnancy Discrimination Act of 1978 Prohibited discrimination against women because of pregnancy and childbirth. Prior to the act, employers could exclude health coverage to pay the cost of prenatal care and childbirth. Family and Medical Leave Act of 1993 Required employers (with 50 or more employees) to provide up to 12 weeks unpaid leave for family (childbirth, adoption, eldercare) or medical reasons.

17. © Routledge Diversity and Minority Progress

18. © Routledge Benefiting from CSP Business Nonmarket and Market Strategies Information strategies that foster a positive view of the firm Societal strategies that will gain a strategic advantage for the firm Political and legal strategies that help the firm avoid legal and ethical problems

19. © Routledge Key Terms benevolent CSR cause-related marketing corporate citizenship corporate reputation corporate social performance (CSP) corporate social responsibility (CSR) diversity ethical CSR harassment legal CSR levels of CSR protected groups sexual harassment social audit triple bottom line