1. 1 International Business & Social Responsibility Chapter 5

2. 2 International Business & Social Responsibility Issues:  An organization’s responsibility for its activities that effect society, both positively & negatively.  Extent of responsibility that should be born by an organization to solve social problems

3. 3 Examination of Social Responsibility EconomicLegalEthical Discretionary Motivation to undertake social responsibility ranges from pure self-interest to enlightened self-interest and to pure altruism.

4. 4 Pure Altruism Desire to act in best interest of society without looking to self- interest. Enlightenedself-interest Combination of the concern for own interest with the customers. Long-run prosperity of the organization with activities benefiting society. Pure self- interest Purely looking to the self- interest

5. 5 To produce products & services and sell them at profit Non-economic activity robs shareholders of their due. Distracts managers from their profit making goals. Conflict with ordinary business activities. Comments Do not undertake social actions that are economically unviable-Peter Drucker Only social responsibility of business is to maximize profit-Milton Freedman Economic Justification

6. 6 Legal To pursue activities within the bonds of laws & regulations. Ethical Decisions and actions based on rightness. Discretionary Pure voluntary and guided by judgment and choice An activity may have a combination of economic, legal, ethical and discretionary motives.

7. 7 Stakeholder Groups Local Communities Employees Suppliers Competitors Lenders Shareholders Government Social Groups Customers Stakeholders

8. 8 Continuum of Social Responsibility 4. Contribution to Social Responsibility 3. Responsiveness 2. Obligation 1. Opposition

9. 9 1. Firms forced to comply with legal and ethical standards. 2. Social obligation by voluntarily confirming legal & ethical standards. 3. Response to stakeholder’s needs. 4. Ways to help stakeholders, above & beyond expectations. Continuum of Social Responsibility

10. 10 => Public Affairs Department: Serve as a link between organization & stakeholders. Institutionalizing Social Responsibility Functions Identifying social issues. Forecasting social trends. Analyzing social environment. Developing programs to meet the needs of stakeholder groups.

11. 11 Institutionalizing Social Responsibility Advocacy Supporting a cause through financial, material & human resources. Partnership Cooperating with special groups to seek mutually acceptable solutions to social problems. Gifting money, time, services to charitable, humanitarian or educational institutions. Philanthropy Executive Loan Allowing executives to take leave of absence & assume position in non-profit organizations.