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CORPORATE SOCIAL

RESPONSIBILITY
CHAPTER 6
LEARNING OBJECTIVES:

Explain the concepts of corporate social


responsibility.

Elucidate the basic premises, arguments for and


against CSR.

Reason out on the need of a CSR initiative.


LEARNING OBJECTIVES:

Enumerate and discuss the ethical decision


making process.

Describe the issues considered in social screening


of investments.

Exhibit understanding of corporate greenwashing.


What is CSR?
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

In the eighteenth century, the


greatest economist and
philosopher Adam Smith
CSR
articulated the traditional or
HISTORY
classical economic model of
business.
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

This model suggested that the


CSR
needs and desire of the society
HISTORY
could be best be met by free-for-all
interactions of individuals and
organizations in the marketplace.
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

In the century after Adam Smith,


many of his principles advocated
CSR
were born out as the introduction
HISTORY
of new technologies allowed for
more efficient production of goods
and services.
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

In the late 19th century, many


believed in and practice a
CSR philosophy that called Social
HISTORY Darwinism. in simple form, is the
idea that the principles of natural
selection and survival of the fittest
are applicable to business and
social policy.
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

Around the beginning of the 20th


century a backslash against the
CSR large corporations. They were
HISTORY criticized as being to be too
powerful and for practising anti-
social and anti-competitive
practices.
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

Laws such as Sherman Antitrust


Act were enacted to rein in the
CSR large corporations and to protect
HISTORY employees, consumers and society
at large.
CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

In the 1960s and 1970s, the civil


right movement consumerism, and
CSR environmentalism affected
HISTORY societys expectations of business.
ARGUMENTS FOR AND AGAINST
CORPORATE SOCIAL RESPONSIBILITY

Arguments For: Arguments Against:


Public expectation Violation of profit
Improved financial performance
Ethical obligations
maximization
Enhanced brand image & Dilution of purpose
reputation
Better environment
Costs
Reduce regulatory oversight & Too much power
government control
Increased ability to attract and
Lack of skills
retain employees Lack of accountability
Stockholders interest
Easier access to capital/ resources Lack of broad public
Risk management support
BASIC PREMISES OF CSR
Business
Leaders

investors
Consumers
Employees

Local communities
Media
Regulators
RELEVANCE OF CSR

Changing social expectations

Competitive labor markets


RELEVANCE OF CSR

Disclosure demands by stakeholders


Dwindling government role
Globalization
Pressure from investors
Supplier relations
Wealth and vulnerability
ETHICAL LEADERSHIP

Is a leadership that is concerned in leading in a


manner that respects the rights, dignity, and
stakes of others.
Focuses on how leaders employ their business
and political power in the decisions they make
and actions they engage into.
ETHICAL DECISION MAKING PROCESS IN
ORGANIZATIONS
CSR Principles
The Option of Doing
Nothing

Withdraw

Be Conscious of
Be An Archivist Long-Term Effects
ETHICAL DECISION MAKING PROCESS IN
ORGANIZATIONS
CSR Principles

Ask Around

Be Comprehensively
Consider Sensitive
Legalities and
Ethics
ETHICAL DECISION MAKING PROCESS IN
ORGANIZATIONS
CSR Principles

Do Not Be A
Dangerous Alpha Find a Win-Win Solution
Male
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

Refers to the acceptance by a business of a conscious effort in


focusing and in satisfying the economic, legal, ethical,
philanthropic and social responsibilities and other acts expected
from the corporations to do to its stockholders.
ELEMENTS OF CORPORATE CITIZENSHIP

Commitment to quality

Ethical legal compliance

Stewardship and governance

Superior employee relation

Social advocacy

Environmental advocacy

Community involvement
PHILANTHROPY AND SOCIAL INITIATIVES

What is
Philanthropy?
BENEFITS OF CORPORATE
PHILANTHROPY
Benefits to Benefits to Benefits to the
Business stakeholders community
Enhance Build employee Improves quality
corporate morale and of life of the
reputation engagements community
Improves Enlarge sense of members
relations with the community and Provides human
government, the social obligations and capital
community and Develops future resources to non-
the key workforce profit
stakeholders contributing to a organizations
Supports a sustainable
companys company
strategic business
goals
SOCIAL SCREENING OF INVESTMENTS

Scarce-off from Strategy

Impact Mitigation

Whoever Is The Best

Main or Derivative Connections


CORPORATE GREENWASHING

It refers to the practice of companies characterized by


deceptively making it appear that their products, services
and policies are environmentally friendly by projecting cost
cuts as reduction in use of resources or investments in
Green Concerns like in areas of ecology and environment.
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
The sin of worshiping false labels
WAYS ON HOW TO SPOT
GREENWASHING

Poor use of scientific facts.


The use of buzz words like carbon intensity, sustainable
development, carbon offsets and clean technology.
Look at the environmental label on the product.
Never abandon common sense.
Look out for negligible green claims.