UNIT Ill CORPORATE SOCIAL RESPONSIBILITY CSR- CONCEPT Corporate Social Responsibility is a management concept whereby companies. integrate social and environmental concems in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives ("Triple-Bottom-Lino- Approach”), while at the same time addressing the expectations of sharoholdors and stakoholdors. In dis senso, itis important to distinguish CSR, which can be a strategic business managomont concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance tho reputation of a company and strengthen its brand, the concept of CSR goes beyond that. Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective needs and capacities of these businesses, and do not adversely affect their economic viability. UNIDO based its CSR programme on the Triple Bottom Line (TBL) Approach, which TEMPhas proved to be a successful tool for SMEs in the developing countries to assist them in meeting social and environmental standards without compromising their competitiveness. The TBL approach is. used as a framework for measuring and reporting corporate performance against economic, social and environmental performance. It is an attempt to align private enterprises to the goal of sustainable global development by providing them wif a more comprehensive set of working objectives than just profit alone. The perspective taken is that for an organization to be sustainable, it must be financially secure, minimize (or ideally eliminate) its negative environmental impacts and act in conformity wif societal expectations. Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures. A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes. "Friends, together, we can achieve a new phase of globalization - one dat creates inclusive and sustainable markets, builds development and enhances international cooperation. We each have a responsibility in moving our agenda forward." 1Economic Eee Social performance issues Capengiaas oe on performance issues staetaise Wornng ecnators| | Rak munagenent sovernmers investors eroloyees Xb enerenmset ture generations Oveeisty tected communtes Eeoeteieney ‘cimate change Product stewardship Bioarersty The Importance of Corporate Social Responsibility for Your Business Ifyou're a business owner, the days of operating solely for profit are gone. Whilst this is still important, many companies now focus largely on corporate social responsibility. Corporate Social Responsibility (CSR) is when a company operates ethically and sustainably and deals with it's environmental and social impacts. dis means careful consideration of human rights, the community, environment, and society in which it operates. dis article outlines the importance of corporate social responsibility and the benefits that sustainable and ethical practices can bring to your business. azImportance of Corporate Social Responsibility i It’s incredibly important that ib your compat responsibility. Although it’ Een coats take into eesti mast a eee requirement, ee eee social Amental Istuga. good practice for you to Social responsibility i y and ethical practi Communications/Ebiqu Sarees ou consumers expect Se eae ope oa ‘ud date sopping 51% oF ab i envi * fe responsi 1g 81% of globs Lee issues. Furthermore, 84% ieee ee wherever possible. y seek out responsible products As the above statistics show, t , consumers are ir i Aone ae pensbil h increasingly a i Se Ta To Stopes oes CSR demons ie TEMPyove a business dat takes an el Cae uae issues, rat same values. T fat impact your profit margins, which will attr ea . Therefore, it makes good business sense to o} a ae perate sustainably. Responsibility Benefits of Corporate So ial imes about how important i The benefits of CSR speak volu an effort to adopt it in your business. it is and why you should make Some clear benefits of corporate social responsibility are: Improved public image. This is crucial, a consumers assess your public image when u. Something simple, like staff members volunteering B deciding whether to buy from yo!8 hour a week F i at i ‘ to helping thers. As a ee Charity, shows that TEMPyou's a brand committed p' you'll appear much more favourable to consumers. \ , Fi praeng82d brand awareness and recognition. If TEMPyou's cominitted to ethical whi ‘ces, this news will spread. More People will therefore hear about your brand, hich creates increased brand awareness. Cost Savings, Many simple changes in favour of sustainability, such as using less Packaging, will help to decrease your production costs. An advantage ver competitors. By embracing CSR, you stand out from competitors In your industry. You establish yourself as a company committed to going one step further by considering social and environmental factors, Greater employee engagement, Similar to customer engagement, you also need to re dat you're employees know you're CSR Strategies. It's proven dat employees enjoy working more for a company dat TEMPhas a good public image TEMPthan one dat doesn’t. Furthermore, by showing dat TEMPyou're committed to things like human tights, TEMPyou's much more likely to attract and retain the top candidates. Corporate Social Responsibility- PRINCIPLES (CSR) CSR contributes to another form of self-regulation that goes further and involves firms taking action to help people and the environment. CSR is described as "a belief that Corporations have a social responsibility beyond pure profit." In other words, "Firms are social entities, and so they should play a role in the social issues of the day. They should take seriously there ‘obligations to society’ and actively try to fulfil them." As such, corporations should employ a decision-making process to achieve more than financial success on the assumption dat CSR is integral to an optimum long-term strategy. In the 21st century, Sustainability and corporate social responsibility (CSR) has become Strategic imperatives for organizations as fundamental market forces for financial viability and success, where Consumers are important stakeholders. Businesses worldwide develop CSR initiatives to become better Corporate citizens but also to communicate their activity to both internal and external Stakeholders, which may involve several groups. A study by Horizon Media's Finger on the Pulse found dat "81 per cent of Millennials expect companies to make a Public commitment to good corporate citizenship." 4average).” The 3 P's (profit, the . people, concept (closely related to ond rete or tive of the TBL—also non as 3BL—incorporates and assi in their funding of and suy ipport for soci i benefits to allow for a greater good. eee “the triple bottor | m line” (TBL), is anoth mission of CSR and firm activities. “ ists businesses to Measure accountabili ; aa (ecological), and financial "y Pete 2 r rations hi i sh neities to their business plans to evaluate their overall p ae ecanaerea ae how ci panies are contributing to society. A small sampl of Saeco Coa initiatives makes a difference. For example: mi elcontemperay ese The GE Foundation gave $88 million to community and educational programs in 2016. Thee eee ee $67 million in 2016 to focus on community and the Wironment, along wif educational initiatives boosting st i in sci environmen 1g student interest in science and Apple was named by the environmental organization Greenpeace as the "greenest tech company in the world" for over three years because dat firm's packaging is manufactured wif 99 per cent recycled paper products. Walt Disney Company's social mi: ission to strengthen communities states dat “by providing hope, happiness, and comfort to kids and families wi no need it most”. The Walt Disney Company donated more than $400 million to nonprofit organizations in 2016. Virgin Atlantic's “Change is in the Air” sustainability initiative states its mission as: i i i i ity investment.” dis firm has “Environment, sustainable design and buying, and communit n since 2007 “reduced total aircraft carbon emissions by 22% and {has} partnered ae LanzaTech to develop low carbon fuels for the future. Virgin Holidays ee 200; annually to the Brandon Center for Entrepreneurship Caribbean to suppo' young entrepreneurs in Jamaica.” i i ic brand blueprint to guide its efforts in csr, neon ear fans , is te velopment Wif a business Cee bs eal ee KI ii brands as Nerf, Play-Doh, Transformers, an’ 7 ‘ot near Bees f cuses its CSR efforts on four key areas: pene sal ve wer Head, the company inability human rights ‘and ethical sourcing, es en ny. environment Se featured at the Thanksgiving Day parade in Ne i one of its proEven with the current 2017 U.S. government's executive branch and Congress backing Out of international climate change agreements to expand and promote fossil fuel Production, taking actions to disable the EPA (Environmental Protection Agency), and Rot funding the Consumer Financial Protection Bureau, many corporations continue Practising CSR and 3BL principles to support sustainable environmental goals and objectives, While CSR is not a cure-all that can or will significantly make a difference in ushering in More sustainable environmental practices, help alleviate poverty, and use profits to help lower-income communities, it contributes to both internal and external stakeholder awareness to “do the right thing.” For example, Teng and Yazdanifard argue and Present evidence that some consumers do take CSR into account while making a Purchase decision. Also, CSR initiatives and actions have been shown to positively influence both internal and external stakeholders. A study conducted in New Zealand explored the perceptions of internal stakeholders of New Zealand companies to discover how the CSR, sustainability cultures and identity are communicated internally. It was found that employee behaviours matter, as organizations that are well regarded in the community attract greater external loyalty, have more stable revenues, and face fewer crisis risks. A positive relationship with staff in organizations through CSR policies will not only attract better employees, it will also influence the morale, motivation, and loyalty of existing staff. The TEMPeffective delivery of CSR initiatives also depends on how responsive employees are. If companies wish to achieve legitimacy by operating within a society's ethical expectations, they must also communicate internally to ensure that CSR activities are integrated into the organizational culture—they cannot "talk the talk” without "walking the walk.” So, does CSR benefit the companies dat practice such measures? A meta-analysis of 52 studies with a sample size of 33,878 observations suggested dat “corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility, is likely to pay off... . CSP [corporate social performance] appears to be more highly correlated with accounting-based measures of CFP [corporate financial performance] than with market-based indicators, and CSP reputation indices are more highly correlated with CFP than are other indicators of CSP". Many business scholars do believe dat some of these relationships are positive. Robbins concludes dat “[oJn balance, surveys and the research literature suggest dat what most executives believe intuitively, dat CSR can improve profits, is possible. And almost no large public company today would want to be seen unengaged in CSR. dat is a clear admission of how important CSR might be to their bottom line, no matter how difficult it may be to define CSR and link it to profits.” Without exception, the managers articulated the importance of communicating CSR initiatives and policy to their employees, as well as recognizing the need to improve 6their CSR internal communicatic unication strategit ives are prot egies. Acco: Isives ae mromotd a reibre: erortenansa merece easel ene cycling, carpoo! pe aataais: Sctivities. External initiatives included Sroluntacring, aoe i . fund-raising, and charitable donations. CSR and stakeholder mai inagement are ches. theor argues dat corpo! ic complementary ai ia : argues dat corporations should treat all thelr constituencies fatly dat eee |panies’ reputations, customer relations, and ener a : ance in the marketplace. “if organizations want to be TI those rganiz EMPeffective, they wil it a , they will pay atte t th Jationships dat can affect or be affected by the enicvenen ofthe. era 11 dat profit maximizaton stakeholder theory is based on the view rights should be extended to all .d dat organizations are not only ible ways. To this end, right thing to purposes.” The ethical dimension of is constrained by justice, dat regard for individual constituencies who have a stake in a business, ant ‘economic” in nature but can also actin socially responsi companies should act in socially responsible ways, not only coz it's the do,” but also to ensure there legitimacy. + management approach first i group or in nsactions, and act volves identifying the stakeholders of dividual who can affect orfs affected By an es. Stakeholders include Hareholders, the government, media, and others. An provided in. The term stakeholder hes ‘and organizations that base their Keholder trust “are likely to yield A stakeholde! company. A stakeholder is any organization's strategies, major tra employees, suppliers, customers, S! illustration of the stakeholder relationships is become commonplace in organizations. Companies strategic decisions on the principle of duty to eam stal tical, social, and reputational several strategic benefits, t00, ‘and can help manage poli risk. Identifying and Influencing Major Stakeholders there are ‘several methods for analyzing stakeholder transactions and relationships wif an organization that goes beyond the purpose of dis chapter.Using an ‘sthical perspective, a goal of dis approach is for organizations to employ Vv transparency, faimess, and consideration of re the stakeholders alues of stakeholder interests in strategic decisions and transactions. Who at ple who have an interes! resisting a proposed course of (that is, peo in supporting or action, resolving an issue, and addressing a change)? orting or resisting the e from the change? change? stakes in either supp! tand to gain and los¢ and lose from the change? wif regard to the change? What are their What do the supporters S' isters stand to gain he supporters have Wat, do the resi rs have about the change? 7 What type(s) of power do tl What type(s) of power do the resiste!CSR and st lakeholder m; and profitability, Snagement have demonstrated benefits to firms’ reputations Similarly, Govern i milarly, ‘ance Metrics Internati i rating agency, found that the ste ational, an independent corporate governance perform better TEMP yn ne, StOCKS of companies run on more celle principles Ge pea ac fun ina self-serving manner. Top-ranked companies : ‘on Controls, and Sunoco also outperformed | ; lower-ranking firms o1 measures such as return on assets, return on investment, and return on capiteh : How do sustainable business practices benefit consul R programs serve in organizations. Are these mers? Differentiate the roles compliance and Cs the same, or are their differences? Explain. What value do CSR (corporate social responsibility) Programs offer to organizations and society? Corporate social responsibility is about an organization taking responsibility for the impacts of its decisions and activities on all aspects of society, the community, and the environment. Corporate social responsibility is about contributing to the health and welfare of society. MANAGEMENT EDUCATION TOWARDS ETHICAL BEHAVIOR The Importance of Teaching Ethics at Business Schools Business ethics is vital for success in the modern world, and so is a fundamental requirement for any business school program. Without ethics and trust, snore ise ch foundation to build a successful career. Accordingly, business schools ns See values in their students. Businesspeople haven't exactly garnered a an ros nae when it comes to moral conscience. Headlines about pharmaceutical price gouging, companies cheating on emissions testing, fraudulent accounts being re uponclients, the financial crisis, a man . and too other scan the challenge faced. "her scandals to name, reveal the ten @, fe e extent of Teaching ethics Does Wat responsibility do busines: , : S schools has in all thi : i this? sue ayaa managers; ethics is an important pan Ge aoe the sake of the jottom line (triple or otherwise), and to sta 7 Pores Schools are also in a strong position to research and shai Peas ethical decision making — or lack thereof, fe their findings reteted to Of the aforementioned scandalous events, in September 2015 that greater scrutiny is caied Tee a ee cree waste clear that there is a need to look at the broader cultural iia decisions in business, particularly the perception that the only wea i 4 det lei eer aan Toney 7 of dstermining value The challenge for business schools is that graduate students — the ones who go on t lead organizations — are older and typically have a full-fledged set of values ty the ie they enter a classroom. Teaching ethics to them seems daunting at best and impossible at worst. ). Methods for bringing ethics to the classroom As students’ principles shift so do the schools’ responses. In recent years, top business schools have made an effort to infuse ethics into the curriculum through workshops, panel discussions, and courses. In 2004, a task force run by accrediting body AACSB determined that business schools had to improve ethics education, but it left schools wif the freedom to decide how. Discover some ways business schools are teaching ethical leadership: ave long used case studies to illustrate the Case studies - Business schools h ries spark classroom challenges businesses regularly face. These real-life sto . discussions about what leaders did right and what they did wrong. Case studies are a good way to demonstrate the sort of ethical dilemmas business executives may face in their future career. Guest speakers - Business schools provide frameworks and theories to help students. learn how to make decisions about investments, hiring, and marketing. But it is significantly harder to bring reality into the classroom. ‘Along with wif case studies, one way to address this is to host guest speakers from industry. They can talk about their ‘own experiences wif ethics. Simulations - Simulations allow students the chance to apply what they have learned without any risk. Technology is utilized to replicate situations similar to those experienced in business reality. Replicating ethical dilemmas In simulation 7illing to compromise. students to evaluate their values and decide where they are wiliNd © biggest Often, these simulations ask students to work in teams, reflec! i ie challenges faced when encountering ethical quandaries in rea . Integration - One criticism business schools have faced is that ethics are ee vacuum, Educators now believe that a pedagogical approach which sees et! od ai into all courses is more effective. Slowly, business ethics is becoming better integrate into MBA curricula. Self-assessment and reflection - An MBA is a time away from the pressures of the workplace when individuals can reflect on their personal goals and develop a strategy for a there upcoming career. It is, therefore, a critical period for the embedding of ethical principals that can act as a compass to navigate the challenges of the future. Leadership and Business Ethics Training for MBAs