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Published by: Aymen Khakwani on May 06, 2011
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Maryam Jabeen


Corporate Social Responsibility
‡ Social responsibility refers to the obligations of an organization to protect or enhance society. ‡ Corporate social responsibility also known as corporate conscience, corporate citizenship, social performance, or sustainable responsible business ‡ CSR is about how companies manage the business processes to produce an overall positive impact on society.


‡ Concept Of Corporate Social Responsibility evolved in three identifiable crisis in America Formulation of FIRST CRISIS
18601860-1890 Labor rights were over looked and price discrimination by captains of American industry business laws by government

Dissatisfaction among public and government

SECOND CRISIS In 1920s Business laws Narrower representing time span corporate stock social market responsibility crash of 1929 Few dominating firms were held blamed for great depression


HISTORICAL BACKGROUND OF CSR THIRD CRISIS 1960s1960s-early 1970·s Business Boycotts. Protest Marches by young people about social causes Active participation and regulation of business operations by Government 2-6 .

ARGUMENTS AGAINST THE CSR ‡ CSR leads to reduction in corporate profit that is contradictory to the corporation·s reason for existence. ‡ CSR gives too much power to businesses ‡ Such corporations are not accountable for their consequences of their actions ‡ No expertise in area of social responsibility 2-7 .

government and general public are partners in society·s protection. it should solve them. ‡ logical arguments can be used to defend corporate social responsibility 2-8 . ‡ organizations have surplus resources to work for social welfare ‡ business.ARGUMENTS IN FAVOR OF CSR ‡ Like individuals corporations are citizens and have obligations towards improvement of society ‡ since business create some problems (water pollution and air pollution).

APPROCHES TO CSR ‡ There are three approaches to social responsibility  social obligations  social reaction  social involvement 2-9 .

Tobacco Companies In America 2-10 .SOCIAL OBLIGATIONS ‡ Social obligations=economic +legal responsibilities ‡ Organization favoring social obligations are forced by societal norms and government regulations ‡ No spirit to move beyond that. just following legal restrictions ‡ i.e.

SOCIAL REACTION ‡ Broader perspective ‡ not only economic and legal obligations but also voluntarily response to societal requests ‡ Offering meeting space and contributions to the local charities by the organizations 2-11 .

Amina Arshad 2-12 1 .

2-13 .Social involvement  The social involvement approach to social responsibility involves actively seeking ways to make a contribution to society. Social involvement goes beyond obligations and requests and actively seeks ways to benefit society.

‡ General electrics ‡ Captain planet 2-14 .Examples ‡ Ronald McDonald house.

Captain planet foundation ‡ Promote understanding of environmental issues ‡ Focus on hands-on involvement ‡ Involve children and young adults 6-18 (elementary through high school) ‡ Promote interaction and cooperation within the group ‡ Help young people develop planning and problem solving skills ‡ Include adult supervision ‡ Commit to follow-up communication with the Foundation (specific requirements are explained once the grant has been awarded) 2-15 .

Drager In a region where poverty abounds and medical care is inadequate. we provide help for those who normally would not receive any. Supporting child aid organizations Helping tsunami victims Furnishing a school library in Lubeck Girls· Day ‡ ‡ ‡ ‡ 2-16 .

Areas of social responsibility ‡ ‡ ‡ ‡ ‡ Ecology and environmental quality Consumerism Business giving Minorities and disadvantaged persons Labor relations 2-17 .

The government and social responsibility Government regulation is based on four basic areas:  Ensures fair labor practices  Protects the environment  Protects consumers  Guarantees safety and health 2-18 .

Influences legislation by using lobbyists 4. Enhances company image to government officials and the general public. Gains favorable legislation and lessened scrutiny through personal contacts. 3. Aids political candidates through donations. 2.Business influence on government Four common approaches business use to influence government. 1. 2-19 .


2-21 .‡ Corporate social responsibility is the manager·s obligation to pursue activities to insure and protect the well fare of the society as a whole as well as the organization.

‡ ‡ ‡ Davis model of CSR Areas of CSR Arguments for and against CSR 2-22 .

product or service shall be thoroughly calculated and decide whether to produce with it 2-23 . with open receipt of inputs from the society and open disclosure of its operation to the public ‡ the social cost and benefits of an activity.Davis model ‡ Business exerts great influence on the society ‡ business should operate as a two way open system.

‡ ‡ the social cost related to each product and activity or service shall be pass on to the customers business institution. as a citizen have the responsibility to become involved in certain social problems that are out side their normal areas of operation. 2-24 .

education.Case of IBM ‡ The example of such an organization is IBM. employee giving. art and culture. environment.e. adult training and work force development. ‡ It has initiated many csr activities i. 2-25 . helping communities in need.

‡ The areas in which the business can act to improve the welfare of society are numerous . ‡ employment ‡ environmental affair ‡ consumer affair etc 2-26 .e.i.

‡ Second argument in the favor of csr is that profitability and growth go side by side. 2-27 .Arguments in favor of CSR ‡ since the business is the sub set of the society and it has great influence on thy society so it must be held responsible.

2-28 . ‡ Is un ethical.Arguments against CSR ‡ This argument was presented by Milton Friedman ‡ creates conflict between organizations objective.

Airmen Khakwani 2-29 .

Social Responsibility Activities:‡ Every federal government states every business should perform a certain level of social responsibility activities. 2-30 .In order to monitor the business. federal government has established the agencies.

Social Responsiveness Social responsiveness is defined as follow:´The degree of effectiveness and efficiency an organization shows in performing social responsibilitiesµ. ‡ Thus the relationship between them is direct and positive 2-31 .

Issues related to Social responsiveness There are three issues ‡ Determining if social obligation Exists ‡ Social responsiveness and Decision Making ‡ Approaches to meet social responsibilities 2-32 .

2-33 .Management Approaches to meet Social Obligations ‡ Social Obligation Approach: It considers business as having primarily economic purposes and confines social responsibility activity mainly to existing legislation.

2-34 .‡ Social Responsibility Approach This Approach states that business as having both economic and societal goals.

Social Responsive Approach: It considers business as having both societal and economic goals as well as the obligation to anitcipate potential social problems and work actively toward preventing their occurence. 2-35 .

Hira Jamshaid 2-36 .

Management Functions 2-37 .

Social Responsibility Activities & Management Functions 2-38 .

e. Planning includes both the broadest view of the organization. e.Planning CSR Activities Planning is the ongoing process of developing the business' mission and objectives and determining how they will be accomplished.. Environmental Forecasts Social Political Economic Technological Long-run Plans Short-run Plans Management Actions Feedbac k 2-39 .g. and the narrowest.. its mission. a tactic for accomplishing a specific goal.g.

Staff personnel give technical advice at this point.Converting Policies into Action Phase 1: ‡ Recognition of social obligation by top management. Formulation & communication of policy about the acceptance of obligation. Phase 3: ‡ Top management obtain organizational commitment & change performance expectations. Phase 2: ‡ Top managers gather information. 2-40 . Staff specialists encourage responses within the organization to meet the social obligation. Division management commits resources and modifies procedures so that social obligations can be performed.

‡ Organizing for social responsibility activities entails establishing for all organizational resources logical uses that emphasize the attainment of the social objectives an that are consistent with its social responsibility plans.Organizing CSR Activities ‡ Organizing is establishing the internal organizational structure of the organization. 2-41 . ‡ Organizing is the managerial function of arranging people and resources to work toward a goal.

‡ The purpose of influencing is to channel the behavior of all personnel to accomplish the organization's mission and objectives.Influencing CSR Activities ‡ Influencing is guiding people's behavior through motivation. communication. ‡ Through influencing management can direct the members of organization to help attain the organization·s social responsibility objectives. group dynamics. leadership and discipline. 2-42 .

AHMAD RAO 2-43 .

make changes 2-44 .Controlling CSR activities Making the things happen as they planed to happen. Controlling includes: ‡ what is happening ‡ If necessary.

Areas of Measurement Different organizations have different areas to measure according to objectives. Major includes:  The economic function area  The quality of life area  The social investment area  The problem solving area 2-45 .

fair dealing & preserve the natural environment. e. The quality of life area: Either improving or degrading the general Quality of life in society.The economic function area: How much Participate in economic activities & contribution for society.g high quality goods & services. 2-46 .

g community planning & conducting studies 2-47 . The problem solving area: Measure the degree to which organization deals with social problems. e.g education.The social investment area: How much Organization is investing both money and human capital to solve social problems. e. charities and the arts.

‡ Monitoring ‡ Measuring ‡ Appraising all aspects 2-48 .The Social Audit: Measuring the present social responsibility.

How society can help Business meet Social obligations Not only business but society also responsible for society benefits. Society can help by:  Set Rules clear and consistent  Keep the rules Technically feasible  Make sure the rules are econimically feasible 2-49 .

not Procedure prescribing 2-50 . not Retroactive  Make the rules Goal setting. Make the rules prospective.

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