1. Prepared by Deborah Baker Texas Christian University
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Chapter 2
Prepared by Deborah Baker Texas Christian University
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz Copyright ©2009 by South-Western, a division of Cengage Learning.  All rights reserved

2. Quote of the Day
There is a wonderful law of nature that the three things we crave most- happiness, freedom, and peace of mind- are always attained by giving them to someone else Anonymous

3. Let’s get started…….. Wal-Mart – Merchant of Doom
1. Summary (review format)
2. Stakeholders (1 – 5) “Let’s MAP IT”
(shared vs. opposing interests?)
3. Models from chapter 1
4. Pro’s and con’s
5. How could this be presented?
(hand out rubrics)

4. Wal-Mart Sample Look at sample Grade partners 1, 2, 2
Where were there problems?

5. Corporate Social Responsibility (CSR)
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Social Responsibility (CSR)
Please “MEMORIZE”:
Corporate Social Responsibility
Seriously considering the impact of a company’s actions on society.
Requires the individual to consider his/her acts in terms of a whole social system, and holds him/her responsible for the effects of acts anywhere in that system.

6. Responsibility? @ Business allegations…
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Responsibility?
Business allegations…
Little concern for the consumer
Cares nothing about the deteriorating social order
Has no concept of acceptable ethical behavior
Indifferent to the problems of minorities and the environment
What responsibility does business have to society? @

7. Corporate Citizenship Concepts
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Citizenship Concepts
Corporate Social…
Responsibility
Performance
Responsiveness
Emphasizes…
Obligation, accountability
outcomes, results
action, activity

8. Business Criticism/ Social Responsibility Cycle
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Business Criticism/ Social Responsibility Cycle
Factors in the Societal Environment
Criticism of Business
Increased Concern for the Social Environment
A Changed Social Contract
Business Assumption of Corporate Social Responsibility
Social Responsiveness, Social Performance, and Corporate Citizenship
A More Satisfied Society
Fewer Factors Leading to Business Criticism
Increased Expectations Leading to More Criticism
(have led to)
(which has resulted in)
Figure 2-1

9. Modification of the Economic Model
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Modification of the Economic Model
Philanthropy
Community obligations
Paternalism
Motivation: Keep government at arm’s length

10. Avoid Regulation

11. Corporate Responsibility

12. Historical Perspective on CSR
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Historical Perspective on CSR
Economic Model
Legal Model
Social Model

13. Especially here in PORTLAND!!!
Sustainability: Oregon's brand and niche
Portland Business Journal - 2:13 PM PST Thursday, Jan. 4, 2006
by Aliza Earnshaw
Business Journal staff writer
“Oregon can -- and should -- seize the moment and capitalize on its worldwide reputation for sustainability. That was the recurring theme of the opening remarks and first panel discussion at Oregon's fifth economic-development summit, held Thursday at the Oregon Convention Center.”

14. Acceptance and Broadening of Meaning
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Acceptance and Broadening of Meaning
From the 1950’s to the present, the concept of CSR has gained considerable acceptance and the meaning has been broadened to include specific issues, such as:
corporate governance
product safety
honesty in advertising
employee rights
affirmative action
environmental sustainability
ethical behavior
global CSR

15. CSR: Evolving Viewpoints
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
CSR: Evolving Viewpoints
CSR considers the impact of the company’s actions on society.
CSR requires decision makers to take actions that protect and improve the welfare of society as a whole along with their own interests.

16. CSR: Evolving Viewpoints
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
CSR: Evolving Viewpoints
CSR supposes that the corporation has not only economic and legal obligations, but also certain responsibilities to society which extend beyond these obligations.

17. CSR: Evolving Viewpoints
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
CSR: Evolving Viewpoints
CSR relates primarily to achieving outcomes from organizational decisions concerning specific issues or problems which (by some normative standard) have beneficial rather than adverse effects upon pertinent corporate stakeholders. The normative correctness of the products of corporate action have been the main focus of CSR.

18. Carroll’s Four-Part Definition of CSR
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Carroll’s Four-Part Definition of CSR
The social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that society has of organizations at a given point in time.

19. Carroll’s Four-Part Definition of CSR
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Carroll’s Four-Part Definition of CSR
Responsibility
Societal
Expectation
Examples
Economic
Required
Be profitable. Maximize sales, minimize costs.
Legal
Obey laws, adhere to regulations
Ethical
Expected
Avoid questionable practices. Do what is right, fair, and just
Philanthropic
Desired/ Expected
Be a good corporate citizen. Give back.
Figure 2-2

20. Legal Responsibilities
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Legal Responsibilities
Law cannot address all the topics or issues that business may face
Law often lags behind more recent concepts of what is considered appropriate behavior
Laws are made by lawmakers and may reflect the personal interests/motivation of legislators rather than appropriate ethical justifications

21. Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
The Pyramid of CSR
Philanthropic Responsibilities Be a good corporate citizen.
Ethical Responsibilities Be ethical.
Legal Responsibilities Obey the law.
Economic Responsibilities Be profitable.
Source: Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,” Business Horizons (July-August 1981). © 1991 by the Foundation for the School of Business at Indiana University. Used with permission.
Figure 2-3

22. + Total Corporate CSR = The CSR Equation Economic Responsibilities
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
The CSR Equation
Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities
Philanthropic Responsibilities + =
Total Corporate CSR

23. Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Arguments Against CSR
Restricts the classic economic goal of profit maximization
Business is not equipped to handle social activities
Dilutes the primary purpose of business
Increases the power of business
Limits the ability to compete in a global marketplace

24. Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Arguments For CSR
Addresses social issues brought on by business, and allows business to be part of the solution
Protects business self-interest
Wards off future government intervention
Addresses issues by using business resources and expertise
Addresses issues by being proactive
The public supports CSR

25. Ways Firms Respond to CSR Pressure
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Ways Firms Respond to CSR Pressure
Cost-benefit approach
Strategic approach
Innovation and learning approach
Defensive approach
The Civil Corporation, Simon Zadek

26. Capitalism

27. Corporate Responsibility in the 21st Century
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Responsibility in the 21st Century
Demonstrate a commitment to society’s values and contribute to society’s social, environmental, and economic goals through action.
Insulate society from the negative impacts of company operations and its products and services.
Share benefits of company activities with key stakeholders as well as with shareholders.
Demonstrate that the company can make more money by doing the right thing.

28. Corporate Social Responsiveness
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Social Responsiveness
Responsibility
Implies more of a state or condition of having assumed an obligation
Responsiveness
Connotes a dynamic, action-oriented condition

29. Corporate Social Performance
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Social Performance
Figure 2-10

30. Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Citizenship
Corporate Citizenship…
…embraces all the facets of corporate social responsibility, responsiveness, and performance.
…serves a variety of stakeholders.

31. Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Corporate Citizenship
A reflection of shared moral and ethical principles
A vehicle for integrating individuals into the communities in which they work
A form of enlightened self-interest that balances stakeholders’ claims and enhances a company’s long-term value
Charles J. Fombrum, “Three Pillars of Corporate Citizenship”

32. Drivers of Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Drivers of Corporate Citizenship
Internal Motivators
External Pressures
Traditions and values
Reputation and image
Business strategy
Recruiting and retaining employees
Customers and consumers
Expectations in the community
Laws and political pressures

33. Benefits of Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Benefits of Corporate Citizenship
Improved employee relations
Improved customer relationships
Improved business performance
Enhanced company’s marketing efforts

34. Stages of Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Stages of Corporate Citizenship
Figure 2-11

35. The future is in our hands……….

36. Development Challenges of Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Development Challenges of Corporate Citizenship
Figure 2-12

37. Business’s Interest in Corporate Citizenship
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Business’s Interest in Corporate Citizenship
Nonacademic Research
Fortune's ranking of “Most Admired” and “Least Admired” corporations
Conference Board’s Ron Brown Award for Corporate Leadership
CRO Magazine Awards

38. Most Admired…. 1 Apple 2 Berkshire Hathaway 3 General Electric
4 Google
5 Toyota Motor
6 Starbucks
7 FedEx
8 Procter & Gamble
9 Johnson & Johnson
10 Goldman Sachs Group

39. And the TRUTH is….. http://walmartwatch.com/
Don’t believe just one “story”. Seek counter claims.

40. “Multiple Bottom Line” Perspective
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
“Multiple Bottom Line” Perspective
Consumer Stakeholders’ “Bottom Line”
Employee Stakeholders’ “Bottom Line”
Community Stakeholders’ “Bottom Line”
Owner Stakeholders’ “Bottom Line”
Other Stakeholders’ “Bottom Line”
Corporate Social Performance
Figure 2-14

41. “Triple Bottom Line” Perspective
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
“Triple Bottom Line” Perspective
Key Spheres of Sustainability
Economic
Social
Environmental
“Worm Poop” – Terra Cycle Site

42. Socially Responsible or Ethical Investing
A technique used to screen firms for socially-responsible investment purposes
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Socially Responsible or Ethical Investing
Social Screening

43. Reasons for Upsurge in Socially Responsible Investing
Chapter 2
Corporate Citizenship: Social Responsibility, Responsiveness, and Performance
Reasons for Upsurge in Socially Responsible Investing
More reliable research on CSP
Investment firms using social criteria have solid track record
The socially conscious 1960s generation is making investment decisions
Gen “Y” is looking for purpose and meaning

44. Next Time… Enron Movie Activity in lieu of quiz
No chapter to read – but do read case (33- Hudson River) just in case you have questions….
Have a great weekend!