Chapter 4

Corporate Social Responsibility
McGraw-Hill/Irwin Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

³A business that makes nothing but money is a poor kind of business´. Henry Ford


Defining CSR
³The New Lemonade Stand«
Consider that age-old icon of childhood endeavors: THE LEMONADE STAND. Within a CSR context, it¶s as if today¶s thirsty public wants much more than a cool, refreshing drink for a quarter. They¶re demanding said beverage be made of juice squeezed from lemons not sprayed with insecticides toxic to the environment, prepared by persons of appropriate age in kitchen conditions which pose no hazard to those workers. It must be offered in biodegradable paper cups and sold at a price which generates a fair, livable wage to the workers ± who, some might argue, are far too young to be toiling away making lemonade for profit anyway. It¶s enough to drive young entrepreneurs«. straight back to the sandbox.´

Defining CSR
Corporate Social Responsibility (CSR) ± The actions of an organization that are targeted towards the achievement of a social benefit over and above maximizing profits for its shareholders and meeting all its legal obligations. The Instrumental Approach ± The perspective that the only obligation of a corporation is to maximize profits for its shareholders in the provision of goods and services that meet the needs of their customers. The Social Contract Approach ± The perspective that a corporation has an obligation to society over and above the expectation of its shareholders.

The Driving Forces Behind CSR
1. Transparency 2. Knowledge 3. Sustainability 4. Globalization 5. The Failure of the Public Sector


The Triple Bottom Line 


The Triple Bottom Line
Coca-Cola¶s 2004 Citizenship Report: ³Our Company has always endeavored to conduct business responsibly and ethically. We have long been committed to enriching the workplace, preserving and protecting the environment, and strengthening the communities where we operate. These objectives are all consistent with²indeed essential to²our principal goal of refreshing the marketplace with high-quality beverages.´

The CSR Bandwagon
Ethical CSR ± Organizations pursue a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to µdo the right thing¶ for all their stakeholders. Altruistic CSR (TSK Pemurah) ± Organizations take a philanthropic approach by underwriting specific initiatives to ³give back¶ to the company¶s local community or to designated national or international programs. Strategic CSR ± Philanthropic activities are targeted towards programs that will generate the most positive publicity or goodwill for the organization.

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