Chapter 6

Corporate Social
Responsibility
Introduction
Key process of constructing a better world

Demonstrate good and accountable

corporate responsibility

Ideology to reality and is now

acknowledged as an important dimension
of contemporary business practices.
Arguments
For CSR
Large corporations create many social
problems and they should attempt to solve
them
Corporations should conduct themselves in
such a way they can assure a favorable
operating environment in the future. (self-
interest)
Private corporations have the resources.
Arguments
Against CSR
Corporations make a profit for its owners.
Government should be the one’s responsible
for solving the problems. (Economic)
Businesses internalize cost of socially
responsible actions. (Competitive)
Business executives and managers are
typically well-trained in functions, but not
well versed in dealing with complex societal
problems. (Capability)
Basic Premises of CSR
Business leaders – understand long-term company value is
based on capability of the enterprise to respond to society’s
changing needs.
Consumers – search for products and services they believe
are doing the right thing
Employees – work for companies whom they share similar
mission and values and where they can contribute to society
Local Communities – businesses are being good citizens
Media – expose some examples of best and worst practices
NGOs – expose examples of irresponsible corporate conduct
and campaign for greater corporate accountability and
transparency
Regulators – business opportunities and economic growth
and solve serious problems
Specific Relevance of CSR
Changing Social Expectations
Competitive Labor Markets
Disclosure Demands by Stakeholders
Dwindling Government Role
Globalization
Pressure from Investors
Supplier Relations
Wealth and Vulnerabilities
Ethical Leadership
Concerned in leading in a manner that
respects the rights, dignity and stake of
others.

Focuses on how leaders employ their

business and political power in their
decisions and actions

Stakeholder-oriented
Ethical Decision Making Process in
Organizations
1. Withdraw
2. Be an Archivist
3. The Option of Doing Nothing
4. Be Conscious of Long-term Effects
5. Consider Legalities and Ethics
6. Ask Around
7. Be Comprehensively Sensitive
8. Do Not be a Dangerous “Alpha Male”
9. Find a Win-Win Solution
Myths about Organizational Ethics

Being Ethical is Easy

Being Ethical is Not Part of Doing Business

Being Ethical Brings No Benefit

What Ethics is Not
Ethics is Not the Same as Feelings

Ethics is Not Religion

Ethics is Not Just Following the Laws

Ethics is Not Following Culturally Accepted Norms

Ethics is Not Science

Corporate Citizenship
Acceptance by business of a conscious
effort in focusing and satisfying the
economic, legal, ethical, philanthropic, and
social responsibilities and other acts
expected of the business.

Recognizes that a company is not and

should not act in separation of the
community within which it operates.

Striving to become a good corporate citizen

is now considered a responsible and
Corporate Citizenship
Key Elements
Commitment to Quality
Ethical Legal Compliance
Stewardship and Governance
Superior Employee Relation
Social Advocacy
Environmental Advocacy
Community Involvement
Philanthropy and Social
Initiatives
Philanthropy – giving money and time to
help make life better for other people
Social Initiatives
Corporate Philanthropy
Intention of helping and improving the
quality of life
Key component of corporation’s social
responsibility
Major link of the company to the
communities it serves
Philanthropy and Social
Initiatives
 Benefits
Business
Enhance corporate reputation
Improves relation with stakeholders
Supports a company’s strategic business goals
Stakeholders
Build employee morale and engagements
Enlarges sense of community and social
obligation
Develops future workforce contributing to a
sustainable company
Community
Improves quality of life
Provides human and capital resources to non-
Social Screening of
Investments
“Scare-off From” Strategy

Impact Mitigation

Whoever is the Best

Main or Derivative Connections

Corporate Greenwashing
Practice of deceptively making it appear that
their products, services and policies are
environmental friendly.

Greenwashing sins
Sin of the Hidden Trade-off
Sin of No-Proof
Sin of Vagueness
Sin of Irrelevance
Sin of Fibbing
Sin of Lesser of Two Evils
Sin of Worshiping False Labels
Ways On How To Spot
Greenwashing
Poor use of scientific facts or lack any
common scientific knowledge
Use of buzz words; “carbon intensity”,
“carbon offset”, “clean technology”.
Look at the environmental label
Never abandon common sense
Look out for negligible green claims