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CSR 1
CORPORATE SOCIAL RESPONSIBILITY
Business Environment
Ch. 5, Steiner & Steiner
CSR 2
Class Objectives
• Corporations will want to establish a Strategic CSR policy consistent with their view of their Social Contract
• CSR can be described for its sources (causes) and its principles, but its effectiveness is hard to evaluate
• Corporations have six responses to the multiple pressures they will receive from society
• There are skills sets that can be developed to improve CSR.
CSR 3
Corporate Social Responsibility (Steiner. P. 120)
• Corporate duty, to
• Create wealth, and
• Protect social assets– Avoid harm– Preserve– Enhance
CSR 4
CSR Related to AIDS
• International Aids Vaccination Initiative– Non-profit, well funded (Bill & Melinda)
• Invest in small US Pharmaceuticals
• Broker US Pharm. & Develop. Countries
• License to manufacture cheap alternative for Africa– Could affect prices in the U.S.
CSR 5
History of Corporate Social Responsibility (CSR)
• Corporate lesson in the Rodney King Riots?– McDonalds – Shell Corporation
CSR 6
“Resistance” to CSR?
• Adam Smith – “invisible hand”
• Social Darwinism
• Ultra Vires
CSR 7
“Justification” for CSR--Bowen
• Ethical duty to consider broad social impacts of decisions
• Reservoirs of skill and energy• Power in keeping with a broad social
contract• Enligtened self-interest to improve society• Voluntary action will head off negative
reactions?
CSR 8
Case Against CSR--Friedman
• Use its resources for profit
• Engage in activities for profit
• Increase its profits
• Within rules of the game
CSR 9
Case Against CSR (cont.)
• CSR money reduces shareholder profit
• Is it what stockholders want?
• Consumers paying for it
• Separation– church/state– corporate/state
CSR 10
Supremacy of CSR in the US
• CED -- 1971– Inner Circle—products & jobs
– Intermediate Circle—environment, hiring, safety
– Outer Circle—evolving
• Business Roundtable Statement on CSR – 1981– Economic/Social responsibilities are compatible
– ALL CORPORATE RESPONSIBILITIES ARE …INTERWINED
CSR 11
Basic Elements (causes) of CSR
• Market forces
• Mandatory programs
• Voluntary Social Programs
CSR 12
General Principles for Strategic CSR
• Law: corporate and stakeholder regulations• Primarily by economic criteria: ROE &
Shareholder value• Address the adverse social impacts they
cause• Varies by corporate characteristics• Meet legitimate shareholder needs• Guided by winds of social direction
CSR 13
Criteria for Rating CSR
• Published Screens– Domini Social Equity Fund– Council on Economic Priorities – p. 138
• Personal screens – what is on your list?
• WSJ in 2000 for top 50 using
CSR 14
CSR and Profit – Related?
• Investing on CSR is noble but less profitable p. 139
• Scholars and profit – no conclusions
• Local programs – examples that work?
CSR 15
CSR Internationally
• European Nations– Regulations and taxes– Unraveling because of US/other competition
• Japan– Confucianism – direct relationship responibility– Emperor Meiji’s “Imperial Oath” – Weaker Stakeholders
• LDCs– India is an exemplar– Economic performance alleviates poverty
CSR 16
Levi Strauss
• Evaluate pros/cons of LS decision to stay/leave in 1993
• Evaluate pros/cons of LS decision to return in 1998
• What is the responsibility of a company like LS in improving HR in China?
CSR 17
Review main points of CSR in Chapter 5:
• Corporations will want to establish a Strategic CSR policy consistent with their view of their Social Contract
• CSR can be described for its – Sources (causes)– Principles, but– Effectiveness is hard to evaluate
CSR 18
IMPLEMENTING CORPORATE SOCIAL
PROGRAMSSteiner & Steiner, Ch. 6
Business Environment
CSR 19
Class Objectives• Corporations will want to establish a Strategic
CSR policy consistent with their view of their Social Contract
• CSR can be described for its sources (causes) and its principles, but its effectiveness is hard to evaluate
• Corporations have six responses to the multiple pressures they will receive from society
• There are skills sets that can be developed to improve CSR.
CSR 20
Royal Dutch Shell
• Responsible corporate member
• Observe county laws
• Support human rights
• Proper regard or health, safety, & environment
• Sustainable development
CSR 21
Six Patterns of Social Response
• Rejection
• Adversary strategy
• Resistance strategy
• Compliance
• Accommodation
• Proactive strategy
CSR 22
Pressures for Undertaking Programs
• Government – jaw boning
• Community interests & demands
• Environmental concerns
• Competitive responses
• Stockholder/investor pressures
• Philanthropy
• Crises
CSR 23
Implementation Procedures (SKILL SETS)
• Issues Management
• Crisis management
• Corporate philanthropy
• Business in education
CSR 24
Issues management
• What is it?– Identify important social issues– Potential of concern to the company– Develop responses
CSR 25
Issues management methodology
• Intuition
• Scenario planning
• Probability/Impact matrix
• Setting priorities
• Shaping public opinion
• Legislation
• Compliance
CSR 26
Crises management
• Examples– Bhopal in India– Exxon Valdez oil spill
• Steps– Assess possibilities – Prepare process – Game it
CSR 27
Corporate philanthropic allocations
• Priorities: education, health,
• 10% of pre-tax “profits” vs 1-2% actual
• Buffett & Gates are significant contributors
• How will you give?
CSR 28
Philanthropic Programs
• Community Economic Development– Target and Home Depot at Habitat
• Strategic philanthropic self-interest
• Cause related marketing– Current web sites
• Business in Education– How much is OK?
CSR 29
Social audits
• Measure program contributions– Central East Rotary summarized giving 6 years
• Kellogg Foundation– 80% of start-ups vanished w/i five years
How would you respond if you were on the board?
CSR 30
Class Objectives
• Corporations will want to establish a Strategic CSR policy consistent with their view of their Social Contract
• CSR can be described for its sources (causes) and its principles, but its effectiveness is hard to evaluate
• Corporations have six responses to the multiple pressures they will receive from society
• There are skills sets that can be developed to improve CSR
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