CORPORATE SOCIAL

RESPONSIBILITY

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Definition: CSR
“A corporation should be held
accountable for any of its actions
that affect people, their
communities, & their
environment”

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Evolution of Corporate
Responsibility

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 Social Responsibility &
Corporate Power
Social Responsibility grow from two
features of corporation:
◦ Essential function it performs for a variety of
stakeholders
◦ Immense influence it has on the lives of the
stakeholders

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 The Stakeholder Concept

Stakeholders are those people & groups

that affect or can be affected by, an
organization’s decisions, policies, &
operations.

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Primary & Secondary Stakeholders

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Primary Stakeholders

Buy Sell
Products Materials

Distribute Lend
Products Money

Sell Invest
Labor Capital

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Secondary Stakeholders

Jobs,
environment
+ve / -ve
opinions Regulation,
taxes

Advice, Friendly,
Research Hostile

Image, Social
Publicity demands

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 How Social Responsibility Began
CHARITY PRINCIPLE STEWARDSHIP PRINCIPLE

Business acting as public trustee,

Definition Business should give should consider the interests of
voluntary aid to society’s all who are affected by business
needy persons & groups decisions & policies

• Acknowledging business &

Type of • Corporate philanthropy society interdependence
Activity • Voluntary action to promote • Balancing the interests & needs
social good of many diverse groups in
society

• Corporate philanthropic • Enlightened self-interest

Example foundations • Meeting legal requirements
•Private initiatives to solve • Stakeholder approach to
social problems corporate strategic planning
•Social partnership with
needy groups

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Arguments For & Against CSR

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RESPONSIBILITIES OF A
BUSINESS

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 Responsibilities of Business
To the General
Public

Business’
To Customers Social To Employees
Responsibilities

To Investors &
Financial Community 12
Responsibilities to General Public

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 Responsibility towards
Environment
Controlling pollution—the injection of harmful
substances into the environment—is a
significant challenge to contemporary business.
 AirPollution
 Water Pollution
 Land Pollution

◦ Toxic Waste Disposal

◦ Recycling

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 Responsibilities to Customers

What is Consumerism ?
Form of social activism dedicated to
protecting the rights of consumers in
their dealings with businesses

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Consumer Rights

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 Basic Consumer Rights
 Consumers have a right
1. To safe products.
2. To be informed (about all relevant aspects of
a product)
3. To be heard
4. To choose (what they buy)
5. To be educated (about purchases)
6. To courteous service
Source: Griffin, 2007

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 Unfair Pricing
Collusion occurs when two or more
firms agree to collaborate on such
wrongful acts as price fixing
Price gouging is a response to increased
demand with overly steep price
increases

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 Ethics in Advertising
Food product labeling
Misleading product claims
Deceptive advertising
Morally objectionable advertising

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 Legal & Social Commitment
 Businesses cannot practice illegal discrimination
against people in any facet of the employment
relationship.
 Businesses should provide employees with equal
opportunities for reward and advancement without
regard to race, sex or other irrelevant factors.
 Businesses should strive to ensure that the workplace is
physically and socially safe.

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 Responsibilities towards
Investors
Improper Financial Management

◦ Check Kiting
◦ Insider Trading
◦ Misrepresentation of Finances

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IMPLEMENTING CSR

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Spectrum of Approaches to Social
Responsibility

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 Approaches to Social
Responsibility
Obstructionist stance: involves the firm
doing as little as possible and may involve attempts
to deny or cover up violations

Defensive stance: involves the firm meeting

only minimum legal requirements in its
commitments to groups and individuals in its
social environment

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Accommodative stance: involves the firm, if
specifically asked to do so, exceeding legal
minimums in its commitments to groups and
individuals in its social environment

Proactive stance: involves the firm actively

seeking opportunities to contribute to the well
being of groups and individuals in the firm’s
social environment

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Establishing a Social
Responsibility Program

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 Social Audit
A social audit examines the social & ethical impact
of the business from two perspectives: from
inside, assessing performance against the
company’s mission objectives; & from outside,
using comparisons with other organizations’
behaviors & social norms

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