Corporate Social Responsibility

BOH4M

The Positives

Good things businesses do?– Meet our needs/wants– Generate wealth– Create jobs– Innovate

The Negatives

Bad things businesses do?– Pollution– Sweatshops/child labour– Fraud– Consumerism

Stakeholders

Who is affected by the actions of a business?

Stakeholders

Owners/shareholders Employees Customers Buyers and Suppliers The community

Social Responsibility

Related to “corporate citizenship” and business ethics

Corporate social responsibility (CSR) means taking your duty to all stakeholders, especially the community as a whole, seriously

Social Responsibility

Doing good things– Donating goods, services, or money to charities– Sponsoring public service ads

Not doing bad things– Being environmentally responsible– Safe working conditions and fair wages– Transparency and accountability

Why CSR?

Owner(s) feel strongly about it Good publicity = good for business Tax deductions The right thing to do Companies should solve the problems they cause

– Ex: pollution

Keeps the government out of business Increased market share

The case against CSR

Improving the community should be the responsibility of the public sector

Diminishes profit to owners/shareholders Makes business less competitive Increases costs A company’s social obligations are discharged when

it pays taxes Businesses may exert too much influence over

charitable causes– Responses to these arguments?

Principles

Two key principles are at the heart of CSR:

– The Charity Principle– The Stewardship Principle

The Charity Principle

The wealthy have a responsibility to the poor Corporations are large, powerful, and

wealthy “citizens”, and should therefore take up social causes– Stems from early 1900s American tycoons

Andrew Carnegie and John D. Rockefeller who contributed large sums of money to charitable organizations

The Stewardship Principle

When business executives think of themselves as trustees of society

Company must ensure that society benefits from their actions, rather than being hurt by them

Recognize that company is not a closed system – if affects (and is affected by) its environment

Must balance the interests of multiple stakeholders

Case Study

Malden Mills