C S R

" Profit and morality are a hard combination to beat ."

— Hubert H . Humphrey U . S . Politician

CSR Timeline
Acting altruisticall y for the greater good

Pure Self Interest

Degree of Ethical Behaviour

CSR Timeline
17th & 18th Century Perspective
Adam Thomas Smith Jefferson 1723 – 1743 – 1826 The Hobbesian assumption of the “State of Nature” 1790 The free market assumption of human motivation American Declaration:
The pursuit of happiness ….. or is that wealth?

Thomas Hobbes 1588 – 1679

20th Century Perspective
John Forbes Nash , Jr . 1928Milton Friedman 1912 – 2006

John Nash and game theory Milton Friedman and the role of government

CSR Timeline
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Commercial logging operations together with laws to protect forests, can both be traced back almost 5,000 years 1622 –Dutch East India Company - management secrecy & “self enrichment”. 1700 BC, King Hammurabi’s code Ancient Rome senators – funding the military campaigns 1930–1940 First corporate responsibility texts appear, including the work of Berle and Means, 1932 1935–1950 New Deal and start of the welfare state 1945–1960 Continued nationalization (Europe), state enterprises (former colonies, Communist bloc) and postwar consensus (US) 1960–1970 Return of business and society debate 1970–1980 Shift from responsibility of leaders to responsibility of companies 1975–1985 Debate about the nature of responsibilities 1975–1990 Corporate responsibility as management practice (e.g. corporate social responsiveness) 1980–1990 Introduction of stakeholder theory, including the work of Edward Freeman 1984 1990–2000 Environmental management 1990–2000 Corporate social performance 1995–now Stakeholder partnerships 2000–now Business and poverty 2000–now Sustainability
Source: Blowfied, M. and Murray, A. (2008) Corporate Responsibility: A Criticial Introduction. Oxford University Press.

Community in a and postmodern Or… why we business and played” pre-modern. modern world expect more from how “the game is .

wealth.Pre-modern • Traditional Entrepreneurial   – Power goes to those who succeed in “the jungle” – Authority resides in those with legitimacy– size. longevity confers authority – Ethics based on individual responsibility and programs minimized  .

Modern • Community of Rational Rules • • • • Bureaucratic Scientific management Reliance on "experts” Comprehensive rules – Power goes to those who make the rules. Relies on expertise – Authority goes to those who can enforce their rules Reach for the top – Ethics are based on “fairness’ and programs based on rules  .

Postmodern • Community of Fleeting Exchanges • • • • Need to interpret Need to build consensus Loose connections Suspicion of authority – Power goes to those who can “make the deal” through networking and can handle uncertainty – Authority goes to those who see and can sell coalitions and deals regardless of other levels of authority – Ethics are situational. programs .

CSR Models Position Minimalist Responsible to Stockholders/owners therefore… Maximizing profit Self interested Stockholders/ owners/ cost Do good when furthers quest “controllers” for growth and profit Social contract Those with social and legal Goes beyond law to spirit of contract commitment Stakeholder Management Stakeholder stewardship Those who influence direction and fortunes Society as whole / future Develop responsive strategies Solutions for social problems .

Modeling the context • Premodern – Minimalist – Self Interested • Modern – The social contract • Postmodern – Stakeholder (management and stewardship)  .

Level of Analysis Corporate Social Identity Corporate Responsibility Benevolance Instituti onal Organisati onal As a member of the business institution An organisational entity with membership in social network As a collection of individual human beings Economic Responsibility Social Responsibility Individu al Moral Responsibility Source: Kang/Wood 1995 .

Environmental protection . human resources . Risk management . supply chain management satisfaction .Social contribution Activities Social Activities Select ive CSR contribution Labour Labour Customer Customer Environmental protection . Compliance . satisfaction . Group control control Core CSR . Information management . safety & hygiene . Group Risk management . Compliance . Information management . supply chain management Extended CSR Product quality & Safety . Corporate governance . human resources . safety & hygiene . Corporate governance . Product quality & Safety .

Ethical Responsibilities Social Responsibilitie s Legal Responsibilit ies Economic Responsibilitie s .

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• Waste management. • Health and safety practices.   PEOPLE – PLANET – PROFITS But it is important to distinguish between these base-line standards and CSR activity which is voluntary. Discussions surrounding the concept are still at an evolutionary stage. • Sustainable development. business-driven  . but for the impact of their activities on society and/or the environment. through a wide range of existing guidelines at national. EU and global levels.     al justice – Environmental quality – Economic prospe The diverse strands that now come under the 'CSR' umbrella – such as • Human resources and environmental issues. although the principles of CSR have long been part of business strategy.Definition CSR is the acknowledgement by companies that they should be accountable not only for their financial performance.

csr. www.com balancing the interest of diverse stakeholders” www. 2005 Chinese Ministry of Commerce Governmental HSBC Corporation CSR Asia Social Enterprise “Means managing our business responsibly and sensitively for long-term success.uk “A concept whereby companies integrate social and environmental concerns in their interactions with their stakeholders on a voluntary basis. socially and environmentally sustainable manner while www. profit at any cost because we know that tomorrow’s success depends on the trust we build today” “A company’s commitment to operating in an economically.gov.hsbc. over and above compliance with minimal legal requirements. and never has been . to address both its own competitive interest and the interest of the wider society.com . 15th Sept.” EC Green Paper 2001 “A concrete action taken by Chinese companies to implement the political aspiration of the new Communist Party collective leasership – putting people first in a harmonoussociety” Chinese definition of CSR.csr-asia. Our goal is not.Organisation Type Definition of CSR Organisation UK Government Governmental European Commission Governmental The voluntaryaction that the business can take.

Authentic Dialogue Decentralised Decision Making Communit y Sense Opening & Sensitivene ss to Environment Knowledge Flexibili ty Shared Vision Systematic Vision Shared Values 5 Basis of CSR Value Creati on Combination Diversi ty Innovation Complex Intangioble Assets Confidenc e Long .term Considerat ion Creativi ty Collaborati Win Win .

Social Benefit / Internal Alignment Competitive Advantage Low High 3 1 Social Benefit 2 6 5 4 Internal Alignment .

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Sustainable report Operational Projects Balanced Scorecard . Budget .Stakeholder Involvement of CSR Mission Values Code of Ethics Involvement of Stakeholders Strategic Plan .

4 Basis of CSR OU R CO ND UC T LE OP PE C S R EN VI RO NM EN T SO C IE TY .

Corporate Responsibility s ns ee io y Un lo mp E Quality of Management l ca Lo s ie it un mm Co s nt e s nm r GO e N ov G a Sh re ld ho er s n Co su rs me .

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Benefits of CSR • • • • • • • • • • Economic considerations Ethical considerations Innovation and learning Employee motivation Risk management or risk reduction Access to capital or increased shareholder value Reputation or brand Market position or share Strengthened supplier relationships Cost savings .

Challenges • Lack of corporate strategic philosophy and vision • Lack of understanding about Community Engagement Frameworks • Not enough sharing of best practices • Insufficient database of good NGO partners • Branding issues .

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Approa ch to CSR .

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Social Bearable Sustaina ble Viable Equitable Environment Economic .