Corporate social

Resonsibility in
Globalization issue
week 14th
Definition
• ‘a business commitment to contribute to sustainable economic
development, working with employees, their families, local people
and the community at large to improve their quality of life' (World
Business Council on Sustainable Development).
• 'A set of management practices that ensure the company minimizes
the negative impact of its operations on society while maximizing its
positive impact' (Canadian Center for Philanthropy).
• 'The integration of business operations and values in which the
interests of all stakeholders including customers, employees, investors
and the environment are reflected in the policies and actions of the
company.' (The Corporate Social Responsibility Newswire Service).
Pros and cons
a corporation’s sole purpose is to
vs
maximise shareholder wealth
Economist Milton Friedman famously argued
that because shareholders ‘own’ corporations,
the only ‘social responsibility of business is to
increase profits’. Shareholders are ‘principals’
who hire directors as their agents to manage
corporations, and the job of directors is to
increase shareholder wealth through every
means possible, short of violating the law
consider a broader range of stakeholders
in its decision making.
For a corporationʹs long‐term success and
profitability, its’ directors must
consider the interests of shareholders and
other relevant corporate stakeholders. An
evidence that corporations which implement
relevant and sustainable
CSR practices perform better and attain
greater competitive advantage
CSR Advantages
1. For corporation
• Sustainability and positive image
• Easy access to capital
• Ease of risk management
2. For community
• Local employment
• Award the existence of local traditions and cultures
3. For the environment
• Prevention of exploitation
• Emphasis on pollution levels
4. For the State.
• Prevention of corporate misconduct or business malpractice
• Acquisition of revenue from reasonable taxes by the company.
The Abandonment of CSR
• Nestle and The Nike factory in one of Asia's countries was criticized
for its poor working conditions and employing young people;
• The Ford Pinto Scandal where Ford, while aware of its fatal design
flaws, decided that it would be cheaper to face possible lawsuits than
to revoke and repair the affected cars;
• Enron manipulates electricity to maximize profits at the expense of
Californians.
CSR Report
• CSR reporting must be done by the company as an effort to improve
corporate accountability towards the stakeholders.
• In Indonesia the company is required to provide report of corporate
responsibility in accordance with Law 40/2007 of Perseroan Terbatas
Article 66 (2/c)
Standards of CSR Reporting
1. Akuntabilitas atas standar AA1000
2. Global Reporting Initiative ( GRI )
3. SA8000.
4. ISO14000
Global Reporting Initiative
• GRI is an independent international organization that has pioneered sustainability
reporting since 1997 with the mission of empower decisions that create social,
environmental and economic benefits for everyone
• Initiated by CERES (Coalition for Environmentally Responsible Economies) and
UNEP (United Nations Environment Programme), the organization was built in
Boston berbasis
• Since 2002 it based relocated in Amsterdam, the Netherlands.
• GRI reports are produced in more than 100 countries.
GRI Reporting Pinciples
• Organizations must identify their stakeholders, and explain how to meet their
expectations and interests fairly
• The report should present organizational performance in a broader context of
sustainability.
• The report should include aspects that:
Reflects significant economic, environmental and social impacts; or
It substantially affects stakeholder judgments and decisions
• The report should cover material aspects and sufficient restrictions to reflect significant
economic, environmental and social impacts, and enable stakeholders to assess
organizational performance within the reporting period.
Types of CSR Activities
1. Environmental Efforts
2. Philanthropy
3. Ethical practice
4. Volunteerism
Practices of CSR by MNC
1. The Walt Disney Company is a good corporate citizen that protects the
environment and ensuring respectful workplaces to promoting the well-
being of kids and families."
2. Google reach the best perception for ‘workplace’. It is an appealing place
to work, and that it treats its employees well.
• Jacquelline Fuller, director of Google said, giving back is a huge part of what
motivates us as a company, and as individuals. We invest in social entrepreneurs who
are using technology to crack the code on the world's toughest problems. Last year
we invested in tech-based efforts to expand access to clean water, stop wildlife
poaching, prevent the horrible practice of human trafficking and reduce poverty
worldwide. In addition to our dollars, we provide Googlers--everyone from
engineers, marketers to business operations gurus--who help nonprofit teams carry
out their work.
3. BMW is a responsibly-run company that behaves ethically and is open
and transparent in its business dealings.