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CORPORATE SOCIAL RESPONSIBILITY

Definition

The European Commission defines it as “A concept where companies voluntarily decide to contribute
to a better society and a cleaner environment.”

Approaches to Social Responsibility

1. Obstructionist
2. Defensive
3. Accommodative
4. Proactive

Low social responsibility


Obstructionist approach

Defensive approach

Social responsibility

Accommodative approach

Proactive approach

High social responsibility

OBSTRUCTIONIST APPROACH

Total disregard for social responsibility.


Managers engage in and cover up unethical and illegal behavior.
They prevent this info from reaching other organizational stakeholders and society at large.
Eg manufacturers of fruit juices who hide evidence about using industrial sugar in the
manufacture of pure fruit juice products

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DEFENSIVE APPROACH

Minimal commitment to social responsibility, ie little active interest.


Managers are willing to do no more than what the law requires.
Do their utmost to ensure their employees behave legally and do not harm others.
When making ethical choices, they put the interests of their shareholders first at the expense of
other stakeholders.

ACCOMMODATIVE APPROACH

Moderate commitment to social responsibility.


Strive to balance interests of various stakeholders against one another.
Want to make choices that are seen to be reasonable in the eyes of society.
Want to do the right thing when approached to do so.

PROACTIVE APPROACH

Strong commitment to social responsibility.


Eager to behave in socially responsible ways.
Take time to learn about the needs of various stakeholder groups.
Use organizational resources to promote the interests of all organizational stakeholders.

CONTINUUM OF SOCIAL RESPONSIBILITY


Four types:

1. Economic
2. Legal
3. Ethical
4. Discretionary

Economic social responsibility

Are the most basic social responsibilities.


Allows managers to maximize profits whenever possible.
Firm provides productive jobs to its employees and tax payments to the government.

Legal social responsibility

Refers to a firm’s obligation to comply with the laws that govern business activities, e.g. labour
laws, consumer safety, etc.

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Firms should obey civil and criminal laws that apply to all individuals and institutions in their
countries of operation.

Ethical social responsibility

Refers to a firm’s proper business behavior. They are responsibilities that transcend legal
requirements.
Firms are expected, but not required, to behave ethically. Some legal activities may be regarded
unethical, e.g production and distribution of alcoholic drinks is legal. However, considering the
negative health implications, most people consider the continued sale of alcoholic beverages
unethical.

Discretionary social responsibility

Refers to those that are voluntarily assumed by business entities.


Include PR activities, good citizenship and full CSR.
Contains a self-serving angle to it.
Managers try to enhance the image of their firm, products and services by supporting worthy
causes, e.g. charities, public service advertising campaigns, concerns in the interest of the public,
etc.