Social Responsibility

- the idea that businesses should

balance profit-making activities
with activities that benefit
society

- involves developing businesses

with a positive relationship to
the society in which they operate 1
 Social Responsibility
- means that individuals have a
duty to act in the best interests
of their environment and society
as a whole

2
 Corporate Social
Responsibility
-- social responsibility as it applies
to business
Being socially responsible means:
- people and organizations must
behave ethically with sensitivity
toward social, cultural,
economic and environmental
issues
3
 Corporate Social
Responsibility
The International Organization for
Standardization (ISO) states:
“In the wake of increasing
globalization, we have become
increasingly conscious not only
of what we buy, but also how the
goods and services we buy have
been produced.” 4
Social Responsibility can be
“negative”, when it is a
responsibility to refrain from
acting (resistance) or can be
“positive”, meaning there is a
responsibility to act (proactive)

5
Being socially responsible not only
requires participating in socially
responsible activities like
recycling, donating, volunteering
and mentoring, but actually
making it a lifestyle.

6
ONLY THROUGH A
COMMITMENT TO EMBRACE
AND EMBED SOCIAL
RESPONSIBILITY INTO OUR
PERSONAL VALUE AND BELIEF
SYSTEM CAN WE TRULY
BECOME SOCIALLY
RESPONSIBLE IN ALL THAT WE
DO.
7
According to “the Harris Poll” in
June 18, 2007, there are 3 types
of people when it comes to
social responsibility:

a. two-thirds of adults have

“good intentions”
- they do what they can in terms
of volunteering but they do not
sacrifice huge amounts of time
or money 8
b. 8 percent of adults “practice what
they preach” – they believe SR is
extremely important

c. 25 percent of adults follow “To

Thine Own Self Be” – they
believe SR has little
consequence in their lives

9
Social Responsibility – an
organization’s obligation to
maximize its positive impact on
stakeholders and to minimize its
negative impact

10
Levels of Social Responsibility
1. Legal – businesses are expected
to obey all laws and regulations

Legality may be viewed in terms of 3

general categories:
a. Compliance
b. Avoidance of civil litigation
c. Anticipation of the law
11
Compliance is sub-divided into 3
types:
a.1 passive – the company is doing
what it wants and just happens to
be complying with the law
Example: if the speed limit is 60
km/hr, and one drives at or below
60 km/hr because it is safer to do
so, and not because of the speed
limit, he is passively complying
with the law 12
Example 2: if there is a safety
standard for a certain product
that a company adheres to even
if the legal requirements do not
exist, the company is in a
passive compliance mode

13
a.2 restrictive – occurs when a
company is legally compelled to
do something that it would not
otherwise want to do

Example 1: if one is in a hurry and

would like to drive 70 km/hr but
does not do so because of the
60 km/hr speed limit, he is
restrictively complying with the
14
law
Example 2: the payment of taxes,
tariffs, or duties is often done
reluctantly and therefore,
restrictively

Example 3: a company may want to

pollute at higher levels, however,
the law prohibits it from doing
so, leading to restrictive
compliance
15
a.3 opportunistic –
a.3.1 when a company abides by the
letter of the law but not the spirit
of the law
- a company may seek out and
take advantage of loop holes in
the legislation to be able to
engage in activities

16
Example 1: some companies decide
to operate in developing nations
because of less stringent
environmental, consumer-
protection or employee-welfare
protection laws, are
opportunistically complying with
the law

17
a.3.2 when a company has based its
decision on the legal system,
and is still technically complying
with the law
- when a company chooses to
operate in a particular
jurisdiction because of its
weaker legal standards

18
Example 1: the decision to drive
one’s sports car on a highway
because of its higher speed limit
entails opportunistically
complying with the law

19
Avoidance – related to corporate
activities that are motivated by
the desire to avoid possible
current and future civil litigation
for negligent conduct

20
In response to fears of litigation,
companies:
a. disengage in manufacture of
dangerous products
b. voluntarily recall products
c. cease non-environmentally
friendly activities

21
Anticipation – company actions
based on consideration of the
legal system

- before a bill is enacted into law,

companies may wish to engage
in activities that will result to
immediate compliance upon the
legislation’s enactment
22
2. Economic – businesses have an
economic responsibility to be
profitable so that they can
provide an ROI to their owners
and investors, create jobs and
contribute goods and services to
the economy

23
3. Ethical – business ethics are
principles and standards that
guide behavior in the world of
business
- what consumers, employees,
shareholders and the community
considers as fair, just, or in
keeping with the respect or
protection of stakeholders

24
- businesses should adhere to
their principles and standards

4. Philanthropic – activities that are

not required of businesses but
promote human welfare or
goodwill

25
Examples of Legal Motives and
Possible Responses
TYPE OF LEGAL MOTIVE TYPICAL CORPORATE/ MANAGERIAL RESPONSE

Passive Compliance "Well, looking back on it, we did happen to comply with the law."

(Outside Legal Domain)

Restrictive Compliance "We wanted to do something else but the law prevented us."

"We did it in order to comply with the law."

Opportunistic Compliance "Well, the law allows us to do it."

"We operate in that jurisdiction because of the less stringent legal standards."

Avoidance of Civil Litigation "We did it because we might get sued otherwise."

"Lawsuits will be dropped."

Anticipation of the Law "The law is going to be changed soon."

"We wanted to pre-empt the need for legislation."

26
Three General Ethical Standards
a. Conventional
b. Consequentialist
c. Deontological

a. Conventional standard – standards or

norms which have been accepted
by the organization, industry,
profession, society as necessary
for the proper functioning of 27
business
b. Consequentialist standard –
sometimes referred to as
“teleological”
- focuses on ends or
consequences
- includes:
b.1 egoism – promoting the
good of an individual
b.2 utilitarianism – promoting
the good of society 28
- an action is considered ethical,
according to consequentialism,
when it promotes the good of
society or when the action is
intended to produce the greatest
net benefit to society when
compared to all of the other
alternatives

29
c. Deontological standard –
standards that embody those
activities which reflect a
consideration of one’s duty or
obligation
- includes:
c.1 moral rights
c.2 justice

30
Rights – an individual’s entitlement
to something and can be
positive or negative

Justice – the moral principle

determining just conduct
- administration of what is just
by law

31
Types of Justice:
a. Distributive – whether benefits
and burdens have been
distributed equitably
b. Compensatory – the extent to
which people are fairly
compensated for their injuries
by those who have injured them

32
- just compensation is
proportional to the loss inflicted
on a person

c. Retributive – a system of criminal

justice based on the punishment
of offenders rather than on
rehabilitation

33