Corporate Social Responsibility & Corporate Responsiveness

Social Responsibility. and philanthropic (discretionary) dimensions . economic. ethical...  an organization’s obligation to maximize its positive impact on stakeholders and to minimize its negative impact  includes legal.

.  refers to obeying governmental laws and regulations  civil law: rights & duties of individuals and organizations  criminal law: prohibits specific actions and imposes fines and/or imprisonment as punishment for breaking the law .Legal Dimension..

. and society (not codified into law)  standards. norms..Ethical Dimension. or expectations that reflect the concern of major stakeholders . the community.  behaviors and activities that are expected or prohibited by organizational members.

Economic Responsibilities.  how resources for the production of goods and services are distributed within the social system  Do you think consumers favor socially responsible companies or are they most enamored with companies that maximize profits? ...

 business’s contributions to society  strategic philanthropy – Home Depot – Microsoft. IBM – Avon ...Philanthropic Dimension. Hewlett Packard.

acting as a public voluntary aid to trustee. should consider the society’s needy persons interests of all who are and groups affected by business decisions and policies  Corporate philanthropy  Acknowledging business and society interdependence  Voluntary actions to promote the social good  Balancing the interests and needs of many diverse groups in society  Corporate philanthropic  Enlightened self-interest foundations  Meeting legal requirements  Private initiatives to  Stakeholder approach to solve social problems corporate strategic planning  Social partnerships with needy groups Type of activity Examples .Foundation principles of corporate social responsibility Charity Principle Definition Stewardship Principle  Business should give  Business.

Promotes long-term profits for business. Discourages government regulation.The pros and cons of corporate social responsibility Arguments for corporate social responsibility Balances corporate power with responsibility. . Places responsibility on business rather than individuals. Imposes unequal costs among competitors. Imposes hidden costs passed on to stakeholders. Responds to changing stakeholders’ demands. Corrects social problems caused by business. Arguments against corporate social responsibility Lowers economic efficiency and profit. Requires social skills business may lack.

The multiple responsibilities of business Economic Responsibility Legal Responsibility Social Responsibility .

• Relationships with suppliers must be based on mutual trust. • The costs of social responsibility which do not increase the value of stock. • Business can contribute to social reform and honor human rights. The multiple stakeholders view • All customers and employees are treated with dignity. . • Belief in fair economic competition.Two views of corporate social responsibility The shareholder view • The only social responsibility of business is to create shareholder wealth. will be passed on to consumers. • Corporate management cannot decide what is in the social interest.

corporate social responsiveness.Contrast between corporate social responsibility. trustee of the public’s interests Corporate social responsiveness 1960s Demands made by numerous social stakeholder groups Corporate citizenship 1990s Building collaborative partnerships with stakeholder groups Focus Action Practical responses by Discovering business businesses to opportunities through corporate partnerships stakeholders Managing corporate Social programs social and financial performance . and corporate citizenship Corporate social responsibility Origin Basis 1920s Principles of charity and stewardship Moral obligations to society at large Philanthropy.

A three-stage model of corporate social responsiveness STAGE Degree of responsiveness to a specific issue High Policy Learning Organizational Commitment • Organizational changes • Administrative learning • Specialized learning • Formulate policy • Identity problem Low Time (years) .

2) Sets high standards of behavior for all employees. 4) Strives to manage the company for the benefit of all stakeholders. while working to protect the environment. . 3) Exercises ethical oversight of the executive and board levels. 9) Respects the rights of consumers. 7) Fosters a reciprocal relationship between the corporation and community.Principles of corporate citizenship Good corporate citizens strive to conduct all business dealings in an ethical manner. 8) Invests in the communities in which corporation operates. 6) Values and implements dialogue. 5) Initiates and engages in genuine dialogue with stakeholders. make a concerned effort to balance the needs of all stakeholders. 1) Engages in fair and honest business practices in its relationship with stakeholders.

16) Invests in employee development. 17) Strives for a competitive return on investment. 14) Provides an equitable reward and wage system for employees.Principles of corporate citizenship 10) Offers quality products and services. 18) Engages in fair trading practices with suppliers. . 15) Engages in open and flexible communication with employees. 12) Provides a family-friendly work environment. 13) Engages in responsible human-resource management. 11) Provides information that is truthful and useful. 20) Demonstrates a commitment to sustainable development. 19) Demonstrates a commitment to the environment.