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