SMO201 CSR

Week 2 Lecture
September 13-17, 2020

Ewout van der Schaft

Ewout.schaft@xjtlu.edu.cn
 1. Who are the people involved?

Module leader: Dr. Yameng Zhang 张雅萌博士

Lecturer in Strategic Management
IBSS. Yameng.Zhang@xjtlu.edu.cn

Ewout.Schaft@xjtlu.edu.cn (Lectures)

Ya.Liang20@student.xjtlu.edu.cn (Teaching assistant)

Quan.Zhang18@student.xjtlu.edu.cn (Teaching assistant)

Visit Yameng during office hours or make an appointment (BS258

10:00-12:00 am every Friday)
 2. Textbook

• E-textbook
• Purchase will be made in the third week
• Please be patient and follow the tutorials and lectures
Part I: Corporate Social Responsibility
Chapter 2: The Driving Forces of CSR
3. The Five Driving Forces of CSR

1. Affluence
2. Sustainability
3. Globalization
4. Communication
 Mobile devices
 Social media
5. Brands

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4. Affluence

• Discuss the following quote from the text:

Affluence raises societal expectations. Firms operating in affluent

societies, therefore, carry a greater burden to demonstrate they
are creating value for their stakeholders. In less affluent societies, a
manufacturer may be able to externalize some of its production
costs to the larger society by polluting the environment. . . . When
most members of a society are desperately seeking food, shelter,
and other basic necessities, CSR concerns appear to be a luxury. As
societies become increasingly affluent, however, the collective
understanding of social issues like pollution grows, as does
society’s ability to afford effective solutions.

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7. Affluence

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8. Affluence

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9. Sustainability
• The argument in favor of action on climate change:

 See Uploaded Video on Climate Change (Learning Mall Week 2)

 The goal is to make people think about climate change and global
warming. Whether you believe in the science or not, the dangers of
not acting far outweigh any dangers associated with acting.

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10. Globalisation
• Some questions:

 What is your definition of globalization?

 How is globalization affecting firms today?
 Is globalization a positive development for firms?
 What are the potential threats posed by globalization?
 Is globalization a stabilizing or destabilizing force?

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11. Globalisation

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 12. Globalisation
• High degree of economic interdependence
• No nation exists in economic isolation
• All aspects of a nation’s economy are linked
to the economies of its trading partners
• Reflects the historical evolution of the
world’s economic and political order
• Complex

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 13. Globalisation

• Globalisation
• Greater interdependence
• Countries and their citizens
• International flows
• Goods and services
• People
• Investments in equipment, stocks, bonds
• Non-economic elements
• Culture and the environment
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 14. Globalisation Drivers
• What forces are driving globalization?
• Technological change
• Multilateral trade negotiations
• Continuing liberalization of trade and
investment
• Widespread liberalization of investment
transactions
• Development of international financial
markets
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 Nike: An “American” Company

Nike HQ:
Beaverton, OR
~8,000 workers
But where are Nike’s actually made?
http://www.nbcnews.com/news/world/worsening-china-factory-strike-threatens-adidas-nike-
sneakers-n87951
Then to the port town of
Shenzhen to be exported
Shenzhen, China
…to Long Beach, California.
…with Oil from the Middle East.
15. The Four Phases of Stakeholder Access
to Information

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16. Globalization in Two Phases of
Empowerment

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17. Communications
• Discuss the positive and negative consequences of the massive
increase in information that is available to us.

“Every day about 300m digital photographs, more than

100 terabytes worth, are uploaded to Facebook. As
estimated 204m emails are sent every minute and, with
5bn mobile devices in existence, the generation of new
content looks set to continue its rapid growth.”

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18. Flow of Information

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22. Brands

The value of brands to firms is quantified by Interbrand in

its annual brand survey, which reveals that brands are more
valuable than ever. Apple’s brand, for example, is estimated
to be worth as much as $184 billion (Interbrand’s No. 1
global brand). Facebook’s brand is estimated to be worth
just over $48 billion, while its tangible assets are worth only
$14 billion (less than a third of the value). In other words,
firms need to take ever greater steps to protect an
investment that is central to their continued success.

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23. The Top 10 Brands
Source: Interbrand, Best Global Brands (2018):

$214,480m $59,890m

$155,506m $53,404m

$100,764m $48,601m

$92,715m $45,168m

$66,341m $43,417m

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 24. A brand is a name, term, sign, symbol or
design, or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them from
those of competitors.
-American Marketing Association
 “A product is something made in a factory; a brand is
something that is bought by a customer. A product can be
copied by a competitor; a brand is unique. A product can be
quickly outdated; a successful brand is timeless.”
- Stephen King (WPP Group, London)
 26. Roles of Brand
• Identify the source of the
product / Maker
• Signify the quality
• Offers legal protection
• Serve as a competitive
advantage
• Emphasizes the bases of
differentiation
• Reduces the primacy of
price upon the purchase
decision
27. Brands Perform Valuable Functions for the
Firm

1.A credible brand signals a certain level of quality so that satisfied buyers
can easily choose the product again.

2.Brand loyalty provides predictability and security of demand for the firm
and creates barriers to entry for other firms.

3.Branding can be a powerful means to secure a competitive advantage.

4.To firms, brands represent enormously valuable pieces of legal property

that can influence consumer behavior, be bought and sold, and provide
their owner the security of sustained future revenues.

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© Pearson Education South Asia Pte Ltd 2013. All rights reserved
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© Pearson Education South Asia Pte Ltd 2013. All rights reserved
31. Strategic CSR Debate

• Motion:

A CEO has a responsibility to advance a social agenda.

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32. Questions for Discussion and Review

1. List the five forces driving CSR for firms today. Of these five forces, is
there one that you feel is more important than the others? Defend
your choice with examples from your own experience and
knowledge?
2. For each of these five forces, can you think of a firm that is
strategically well positioned to take advantage of the changes being
propelled by that force?
3. For each of the five forces, can you think of a firm that is vulnerable to
these shifting dynamics?
4. Ten years from now, do you think these five forces will still be driving
CSR? Do you see any other emerging forces (e.g., religion, technology)
that might reshape CSR in the future to the same extent as the five
forces discussed in this chapter?
5. Is social media helping society advance or is it holding us back?
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 CORPORATE SOCIAL
RESPONSIBILITY (CSR)
Lecturer: Dr. Xuanwei Cao
Office: BS226
Office Hour: 15:00-17:00 Wed.
Email: xuanwei.cao@xjtlu.edu.cn