CORPORATE SOCIAL

RESPONSIBILITY
Definition: CSR
“A corporation should be held
accountable for any of its actions
that affect people, their
communities, & their
environment”
Evolution of Corporate Responsibility
Business and Sustainable Development
• International Initiatives
– Statements of Principle
• UN / Business “Global Compact”
– Management Practice Standards
• ISO 14000 environmental standards
• SA 8000 social accountability standard
• Development of ISO guideline on CSR
– Reporting Guidelines
• GRI Sustainability Reporting Guidelines
– Sectorial Initiatives
• Extractive Industries’ Transparency Initiative
• Forest Stewardship Council
• Equator Principles
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
How Social Responsibility Began
CHARITY PRINCIPLE STEWARDSHIP PRINCIPLE
Business acting as public
Definition Business should give trustee, should consider the
voluntary aid to society’s interests of all who are
needy persons & groups affected by business
decisions & policies
• Acknowledging business &
Type of • Corporate philanthropy society interdependence
Activity • Voluntary action to • Balancing the interests &
promote social good needs of many diverse
groups in society
• Corporate philanthropic • Enlightened self-interest
Example foundations • Meeting legal
•Private initiatives to requirements
solve social problems • Stakeholder approach to
•Social partnership with corporate strategic planning
needy groups
Arguments For & Against CSR
Arguments For CSR
• Balances corporate power
with responsibility
• Discourages govt.
regulations
• Promotes long term profit
for business
• Responds to changing
stakeholders’ demands
• Corrects social problems
caused by business
Arguments Against CSR
• Lowers economic
efficiency & profits
• Imposes unequal costs
among competitors
• Imposes hidden costs
passed on to the stake
holders
• Requires social skills
business may lack
• Places responsibility on
business rather than
individuals
VIDEO SESSION
1. What is CSR: videos\csr.flv
2. A research by IBM on CSR
videos\csr-ibm.flv
3. Examples of organizations working on CSR
1. videos\csr klm.flv
2. videos\koenig csr.flv
RESPONSIBILITIES OF A BUSINESS
Responsibilities of Business
To the General Public

Business’
To Customers Social To Employees
Responsibilities

To Investors & Financial

Community
Responsibilities to General Public
Responsibility towards Environment

• Controlling pollution—the injection of harmful

substances into the environment—is a significant
challenge to contemporary business.
• Air Pollution
• Water Pollution
• Land Pollution
– Toxic Waste Disposal
– Recycling
Responsibilities to Customers
What is Consumerism ?
• Form of social activism dedicated to protecting the
rights of consumers in their dealings with businesses
Consumer Rights
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
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
Ethics in Advertising
• Food product labeling
• Misleading product claims
• Deceptive advertising
• Morally objectionable advertising
Product Labels
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.
Responsibilities towards Investors

• Improper Financial Management

– Check Kiting
– Insider Trading
– Misrepresentation of Finances
IMPLEMENTING CSR
Spectrum of Approaches to Social
Responsibility
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
• 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
Establishing a Social Responsibility
Program
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