Fundamentals of Corporate Social

Responsibility

Chapter 2

1
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning.  All rights reserved
 I believe that companies doing business in a
responsible and sustainable way, can help raise
the quality of life and standards of living in some
of the poorest parts of the world- Anthony
Burgmans, Former Chairman Uniliver
 CSR is not just about managing reducing and
avoiding risk, it is about creating opportunities,
generating improved performance, making
money and leaving the risks far behind.

2
 Introduction to Chapter 2
Business allegations…

 Little concern for the consumer

 Cares nothing about the deteriorating social order
 Has no concept of acceptable ethical behavior
 Indifferent to the problems of minorities and the
environment

What responsibility does business have to society?

3
 Corporate Social Responsibility (CSR)

Seriously considering the impact of

a company’s actions on society.
Corporate
Requires the individual to consider
Social his/her acts in terms of a whole
Responsibility social system, and holds him/her
responsible for the effects of acts
anywhere in that system.

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 Corporate Social Responsibility
(CSR)
 Corporate Social Responsibility (CSR) is about building a
socially responsible business striving for social change
along the line of seeking profits.
 The concept of CSR is associated (but, not limited) with
all the stakeholders like customers, employees,
investors, society and government.
 While all companies look for maximizing profit, blending
this ambition with social values and cultural responsibility
helps in enhancing the long term value creation of a
business.
 Corporate houses can perform CSR of different kinds
and scale, which may or may not require an added
investment. 5
 Seeing is Believing-Standard Chartered Bank

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 NMB Bank Heritage Walk

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 Nepal Telecom- Bagmati Cleaning Campaign

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 Ncell- Axiata-Advancing Asia - education, bridging
digital divide and supporting talent

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 Surya Nepal-community empowerment, tourism,
ecological conservation and health

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 Concept of CSR

CSR (Carrol, 1979)

Firms have responsibilities to societies including
economic, legal, ethical and discretionary (or
philanthropic).
 European Commission
• CSR is a concept whereby companies integrate social
and environmental concerns in their business
operations and in their interaction with their
stakeholders on a voluntary basis

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 Concept of corporate social responsibility
(CSR)

• Corporate social responsibility (CSR) means

-Corporation should be held accountable for any of
its actions that affect people, their communities,
and their environment
-Implies that harm to people and society should be
acknowledged and corrected if at all possible
-Require a company to forgo some profits if its
social impacts seriously hurt some of its
stakeholders or
-if its funds can be used to have a positive social
impact
 Concept of corporate social responsibility
(CSR)
Many responsibilities of business
• Being socially responsible does not mean that a
company must abandon its other missions
• Business has many responsibilities: economic, legal,
and social
• Challenge for management is the blending of
these responsibilities into a comprehensive
corporate strategy
• Social responsibility require companies to balance
the benefits to be gained against the cost of
achieving these benefits
(CSR)

Many responsibilities of business

Two schools of thought
•Both business and society gain when firms
activity strive to be socially responsible
• Others are doubtful, stating that business`s
competitive strength is weakened by taking other
social tasks
(CSR)
Social Responsibility & Corporate Power
• Social responsibility of business grow directly out
of two features of the modern corporation
A) Essential function for variety of stakeholders
B) Immense influence it has on life stakeholders
• Corporation is involved in job creation, well being
of community, raise standard of living, pay taxes,
insurance, communication, transportation, utilities,
entertainment
• Positive impact of corporation activities-
encouraging economic growth, expanding
international trade, creating new technology
(CSR)
Social Responsibility & Corporate Power
• Most of 100 largest economies in the world are
global corporation
• World`s largest 200 companies account for more
than a quarter of the world`s activity
• One third of world trade is simply transactions
among units of same company
• Modern business every action it takes can affect the
quality of human life- for individuals, communities,
and for the entire globe
(CSR)
Social Responsibility & Corporate Power
• Iron Law of Responsibility: It says that in a long
run, those who do not use power in ways that
society considers responsible will tend to loose it
 Carroll’s Four-Part Definition of CSR

The social responsibility of business encompasses the

economic, legal, ethical and discretionary
expectations that society has of organizations at a
given point in time.

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 Carroll’s Four-Part Definition of CSR

Societal
Responsibility Examples
Expectation

Be profitable. Maximize sales,

Economic Required
minimize costs.

Obey laws, adhere to

Legal Required
regulations

Avoid questionable practices.

Ethical Expected
Do what is right, fair, and just

Desired/ Be a good corporate citizen.

Philanthropic
Expected Give back.
Figure 2-2 19
 Legal Responsibilities

 Law cannot address all the topics or issues that

business may face

 Law often lags behind more recent concepts of what

is considered appropriate behavior

 Laws are made by lawmakers and may reflect the

personal interests/motivation of legislators rather
than appropriate ethical justifications

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 The Pyramid of CSR

Philanthropic Responsibilities
Be a good corporate citizen.

Ethical Responsibilities
Be ethical.

Legal Responsibilities
Obey the law.

Economic Responsibilities
Be profitable.

Figure 2-3 21
 The CSR Equation

Economic Responsibilities
+ Total
Legal Responsibilities

+ = Corporate
Ethical Responsibilities CSR
+
Philanthropic Responsibilities

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 A Stakeholder View of CSR

Stakeholder Group Addressed and Primarily Affected

CSR Owners Con- Employees Community Others

Component sumers

Economic 1 4 2 3 5

Legal 3 2 1 4 5

Ethical 3 1 2 4 5

Philanthropic 3 4 2 1 5

Figure 2-4 23
Basic elements of social responsibility
Devisable but discretionary acts the
Discretionary contributes to societal good (e.g.
philanthropic works)

Ethical Ethical expectation of a company to

responsibility operate (e.g. acts necessary to
maintain license)
Legal Obligations to fulfill economic
responsibility mission within the confines of the
law
Economic Responsibility to produce goods and
responsibility services that society wants at profit
Basic elements of social responsibility
Economic responsibility
• Fundamental responsibility of business to produce
goods and services that society wants, and sell at
profit
• Some agree that under free enterprise system, creating
jobs, shareholder value , and good and services- and
doing this in a law abiding manner are all inherent
ways in which business contributes to society
•Managers focus on anything than profit they risk
creating enterprise with many creating enterprise with
many function that ends up with no clear
accountability
Basic elements of social responsibility
Legal responsibility
• Obligation of business to fulfill its economic mission
within the confines of the law
• Local, national, international law set out the rules by
which corporations play, and over time has prescribed
what companies can and cannot do with employment,
environmental protection, corruption, human rights,
product safety
• Companies do exercise influence on what is passed as
a law
•If government is too harsh on companies business will
invest elsewhere
Basic elements of social responsibility
Legal responsibility
• Legal requirement vary from country to country e.g.
work week in China is 44 hours; France is 35hours,
South Korea is 50 hours, Nepalese cannot invest
abroad (Act Restricting Investment Abroad, 1964)
• Business criticized for using bribery and corruption
to influence policy, win contracts, distort functioning
of free market and political process
Basic elements of social responsibility
Ethical responsibility
• Responsibilities go beyond legal compliance which
are not determined through economic calculations
• For some people, this is the most interesting part of
corporate responsibility because it is asking what
companies can do beyond what is demanded by
regulations and economic rationality
• In some cases companies do voluntarily go beyond
legal compliance e.g. environment is one area where
companies in the past relied on government to say
what is permissible, but in face of global challenges
from climate change they are willing to go beyond
Basic elements of social responsibility
Ethical responsibility
•Environmental issues found their ways into marketing
strategies and industries focused on environmental
technologies emerged
• Improved environmental performance could have
positive impact on financial bottom line
• Sustainability- ability to sustain high quality of life
for current and future generations requires companies
to rethink what they produce and how they do so
• Example Fairtrade ensures that certified products
meet certain fairtrade standards include minimum
price to growers, wages
Basic elements of social responsibility
Ethical responsibility
• “Bottom of the Pyramid”- harnessing the power of
market for benefit of the poor e.g. Microfinance
model, originally developed in Bangladesh, but now
found throughout the world
Discretionary responsibility
•Discretionary responsibility are one such as
philanthropy, which a company can assume even if
there are no clear cut societal expectations
•Corporate responsibility is what lies beyond the law
and an important area of discretionary responsibility
has been idea of ‘giving back’ to the society
Basic elements of social responsibility
Discretionary responsibility
• Big companies around the globe do have charity (Bill
and Melinda Gates Foundation)
• Some companies adopt cause related or affinity
marketing under which companies invest in social
causes that complement their brands
• Companies are criticized that anything they do to give
back is perceived as public relations exercise
 CSR

 Contemporary definition of CSR should

comprise of:
• Ethical conduct of business
• Stakeholder demands fulfillment
• Integration of economic, social, and environmental
concerns during decision making
• Voluntary activities that goes beyond legal
requirement.

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 CSR

 Therefore, CSR may be defined as the

commitment of business to uphold ethics and
governance while at the same time contribute to
economic, social and environmental aspects for
the benefits of both business and society.

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 Elements of CSR

 Ethical conduct of business

 Good Corporate Governance
 Fulfillment of stakeholder needs
 Environmental Integrity
 Beyond Philanthropy
 Voluntariness

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 Corporate Citizenship Concepts

Corporate Social… Emphasizes…

Responsibility Obligation, accountability

Responsiveness action, activity

Performance outcomes, results

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 Business Criticism/
Social Responsibility Cycle
Factors in the Societal Environment
(have led to)

Criticism of Business

(which has resulted in)

Increased Concern A Changed
for the Social Environment Social Contract

Business Assumption of
Corporate Social Responsibility

Social Responsiveness, Social

Performance, and Corporate Citizenship

A More Satisfied Society

Fewer Factors Leading to Increased Expectations 36

Business Criticism Figure 2-1 Leading to More Criticism
Benefits of CSR to Business and Society

• Triple bottom line: People. planet and profit

•People: relates to fair and beneficial business
practices
•Planet: refers to sustainable human practices
•Profit : is economic value created by organizations
after deducting cost of all inputs
• Human resource: A CSR programme can be aid to
recruitment and retention
• Risk management: building genuine culture of ‘doing
right thing’ within an organization can offset the risks
• Brand differentiation: CSR can play a role in building
customer loyalty based on distinctive ethical values
Benefits of CSR to Business and Society

• License to operate: To avoid interference in their

business through taxation or regulations
• Supplier relation: Emphasizing the importance of
practicing CSR to suppliers & research on current
supply chain
Business and
Society Enhanced
Winning new relationship
Increase in businesses with
customer stakeholders
retention
Attracting,
Retaining and
maintaining a
Saving money happy workforce
on energy &
operating cost
Benefits
of CSR
Media interest
and good
reputation
Differentiating
yourself from
the competitor
Enhancing your Access to
influence in funding
the industry opportunities
Benefits of CSR to Business and Society

•Balances corporate power with responsibility

• Business enterprises possess much power and
influence
• Responsibility must accompany power, holding it
• Business committed to social responsibility are
aware that if they misuse power they have, they
might lost it
•Discourages government regulations
• Voluntary social acts may head off increased
government regulations
• Some regulation may reduce freedom for both
business and society
Benefits of CSR to Business and Society

•Discourages government regulations

• Regulations tend to add economic costs to business
and restrict flexibility
• Business by its own socially responsible behaviour
can discourage new government restrictions
•Promotes long term profits for business
• Social initiatives by businesses produce long run
business profits
• In 1980s several people dies after ingesting extra strength
Tylenol capsules laced with Cyanide, after that incident Johnson
& Johnson recalled the products from the market . Customer`s
rewarded the company's responsible action by buying more of
their products
Benefits of CSR to Business and Society
•Improve business value and reputation
• Social reputation of firm is often viewed as an
important element in establishing trust between
firm & its stakeholders
• Reputation refers to desirable or undesirable
qualities associated with an organisation or its
actors that may influence the organization
relationship with stakeholders
• Reputation valuable intangibles asset, as it
promotes repeat purchase by loyal customers and
helps to attract and retain better employees to spur
productivity and enhance productivity
Benefits of CSR to Business and Society
•Corrects social problems caused by business
• Business has responsibility to compensate society
for the harm it has sometimes caused
• If consumers are injured due to product defect,
manufacturer is responsible
• If business does not recognizes voluntarily the
courts will often step into represent society and its
interests
 Benefit of CSR to Business

 Customer Attraction and Loyalty

 Talent Attraction and Retention
 Reduction in Cost of Operations-7% SCB, 70/71
 Mitigation of Business Risk
 Ability to address change
 Competitive Advantage

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 Benefit of CSR to Society

 Community Development-Nestle
 Quality of Life of People
 Environmental Sustainability
 National Competitiveness

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 Arguments against CSR
•Imposes Hidden Costs Passed On to Stakeholders
• Social proposals undertaken by business do not pay
their own way in an economic sense; therefore, someone
must pay for them Society pays all costs
• Socially responsible business will try to recover all of
their costs in some way
• Sometimes government regulations intended to produce
socially desirable business behaviour drive up business
costs, and it increased prices and lowers productivity
• Requires Skills Business May Lack
• Business people are not primarily trained to solve social
problems so they may know about aspects of business but
do not know about inner city issues or poverty or violence
in schools
 Arguments against CSR
•Requires Skills Business May Lack
• Putting businesspeople in charge of solving social problems
may lead to unnecessary expensive and poorly conceived
approaches
• One might question the effectiveness and efficiency of
businesspeople seeking to address social responsibility problems
• Places Responsibility on Business Rather than Individuals
• Only individuals persons can be responsible for their actions
and people make decisions, organizations do not
• Entire company cannot be held liable for its actions, only those
individuals who are involved in promoting and carrying out
policy
• So it is wrong to talk about the social responsibility of business
when it is social responsibility of individual businesspersons
that is involved
 Arguments For CSR

 Addresses social issues  Addresses issues by

brought on by business, using business resources
and allows business to be and expertise
part of the solution
 Addresses issues by
 Protects business being proactive
self-interest
 The public supports CSR
 Wards off future
government intervention

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 CSR: Evolving Viewpoints

1. CSR considers the impact of the company’s actions

on society.

2. CSR requires decision makers to take actions that

protect and improve the welfare of society as a
whole along with their own interests.

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 CSR: Evolving Viewpoints

3. CSR supposes that the corporation has not only

economic and legal obligations, but also certain
responsibilities to society which extend beyond
these obligations.

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 CSR: Evolving Viewpoints

4. CSR relates primarily to achieving outcomes from

organizational decisions concerning specific
issues or problems which (by some normative
standard) have beneficial rather than adverse
effects upon pertinent corporate stakeholders. The
normative correctness of the products of corporate
action have been the main focus of CSR.

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Ways Firms Respond to CSR Pressure

Defensive approach

Cost-benefit approach

Strategic approach

Innovation and learning approach

The Civil Corporation, Simon Zadek

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 Corporate Responsibility
in the 21st Century

 Demonstrate a commitment to society’s values and

contribute to society’s social, environmental, and
economic goals through action.
 Insulate society from the negative impacts of
company operations and its products and services.
 Share benefits of company activities with key
stakeholders as well as with shareholders.
 Demonstrate that the company can make more
money by doing the right thing.

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 Drivers of CSR -Globally

 Instrumental Drivers-community, customers,

cost reduction
 Moral Drivers
 Legitimacy- normal behavior
 Stakeholder Pressure
 Globalization-Branding and hiding

54
 Other Drivers

 Growing Affluence
 Media
 Common Practices in the industry
 Political Legal Factor
 Religious belief and spirituality

55
 Drivers –Developing Nations

 Cultural Tradition
 Political Reform
 Socio-economic priorities
 Governance Gap
 Crisis Response
 Market Access
 International Standardization
 Investment Incentives
 Stakeholder Activism
 Supply Chain Pressure
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Theories of CSR - Shareholder value theory and
Stakeholder theory
A. Shareholder Value Theory
• Shareholder value theory is the dominant economic
theory in use by business
• Maximizing shareholder wealth as the purpose of the
firm is established in our laws, economic and
financial theory, management practices, and language.
Business schools hold shareholder value theory as a
central tenet.
• The roots of this view can be traced back to Adam
Smith and the central tenets within his book The
Wealth of Nations
Theories of CSR - Shareholder value theory and
Stakeholder theory
A. Shareholder Value Theory
• Nobel Laureate Milton Friedman (1970) strongly
argues in favor of maximizing financial return for
shareholders
• He says ‘there is one and only one social
responsibility of business - to use its resources
and engage in activities designed to increase its
profits so long as it stays within the rules of the

game, which is to say, engages in open and

free
competition without deception or fraud
Theories of CSR - Shareholder value theory and
Stakeholder theory
A. Shareholder Value Theory
Friedman’s statements reflect three fundamental
assumptions that lend support to the shareholder
view of the firm
a) Externalization of costs: Management should
run the business to maximize cash flow to
shareholders— maximizing revenue, minimizing
cost, and reducing risk.
(One way to reduce cost is by externalizing it through such
means as polluting the environment. A way to increase
revenue is to sell products that have a greater cost to
society than is covered in the costs of the
product, such as cigarettes or sport utility vehicles)
Theories of CSR - Shareholder value theory and
Stakeholder theory

A. Shareholder Value Theory

b) Self-Interest as the Prime Human Motivator
- The fundamental assumption of modern economic theory is a
view of the individual self, acting rationally in self- interest
-The view of Friedman is traceable back to Adam Smith (1776)
—every person acting rationally in their own self interest
maximizes efficiency and value for society
c) The Firm as a Nexus of Contracts in Service of
Profitability
- The nexus of contracts theory depicts the firm in a web of
implicit and explicit contracts with stakeholders;
however, the shareholder has primacy over other
stakeholders
Theories of CSR - Shareholder value theory and
Stakeholder theory
B. Stakeholder Theory
• The intention of stakeholder theory is to offer an
alternative purpose of the firm. Stakeholder theory
suggests the purpose of the firm is to serve broader
societal interests beyond economic value creation for
shareholders alone.
• It is becoming central to the important story of business
in society
• The concept of Stakeholder theory is ascribed to R.
Edward Freeman (1984) whose original concept was
that managers have a moral obligation to consider
and appropriately balance the interests of all
stakeholders
Theories of CSR - Shareholder value theory and
Stakeholder theory
B. Stakeholder Theory
• Evan and Freeman (1993) stated, “A stakeholder theory
of the firm must redefine the purpose of the firm…the
very purpose of the firm is…to serve as a vehicle
for coordinating stakeholder interests”
• Stakeholder theory expresses the idea that business
organizations are dependent upon stakeholders for
success, and stakeholders have some stake in the
organization
• Stakeholder theory extends the concept of ownership of
the firm beyond that of the traditional notion
Theories of CSR - Shareholder value theory and
Stakeholder theory
The Conflict
• One competitive analysis revealed that companies
focusing on stakeholders outperformed others even
during times when the focus was on shareholder
wealth
• In assessing the arguments for shareholder theory,
Lynn Stout pointed out in her book that despite the
pervasive extent of shareholder value ideology, it
remains a managerial choice, rather than a legal
obligation or practical necessity
• Stakeholder theory offers a more holistic approach
that includes more parties than shareholder theory.
Yet it has its detractors as well.
Theories of CSR - Shareholder value theory and
Stakeholder theory
The Conflict
• According to economist Michael C. Jensen, stakeholder
theory does not provide a complete specification of the
corporate objective function , unlike the clarity provided by
the single objective of shareholder value theory
• Stakeholder theory directs managers towards many
objectives, creating confusion, conflict, inefficiency, and
competitive failure for the organization
• A final argument against stakeholder theory is that it
undermines fundamental features of society that it denies
owners the right to dictate the use of their assets, stipulating
that assets should be used for the benefit of all stakeholders
corporate
social performance
Corporate Citizenship
• Corporate citizenship means putting a commitment to
social and environmental responsibility into practice
• It involves:
 Building positive relationships with stakeholders
 Discovering business opportunities in serving society
 Transforming a concern for financial performance into
a vision of integrated financial and social and
environmental performance
 Establishing effective structures and processes to meet
a company’s social responsibilities, assess results, and
report them to the public
 corporate
social performance
Corporate Citizenship
Examples:
• Mattel Toy Company (makers of Barbie doll, also
brands like Hot Wheels, Fisher Price) hires outside
auditors (from academic filed and also NGOs) to
investigate working conditions in outside factories
in Mexico, China, Indonesia, Malaysia and
Thailand. Company ended its contract with factory
in Mexico after audit revealed about underage
workers, forced overtime, harmful chemical fumes
and factory owners missed deadlines to fix the
problems
corporate
social performance
Corporate Citizenship
Examples:
• Novo Nordisk, MNC of health care sector , dedicated to
treatment of diabetes. It markets range of products
including synthetic insulin and device such a “pen” that
diabetic can comfortably inject medicine. Company linked
to core mission of fighting diabetes and as part of “Take
Action” project its employees visit schools around the
world to work with teachers to promote exercise and
healthy eating . Another is initiative to design to reduce
adverse effect of pharmaceuticals excreted in the urine-
damages aquatic life when these chemicals enter the
sewage system and discharge in waterways
corporate
social performance
Corporate Citizenship
• It used to be simple and optional but with globalization
and quick access to information , and heightened
expectations of stakeholders have compelled all
organization regardless of size , to establish “integrated
corporate citizenship strategy”
• Benefits of Corporate Citizenship
 Improved employee relationship (e.g., improves
employee recruitment, retention, morale, loyalty,
motivation, and productivity)
 Improved customer relationships (e.g., increases
customer loyalty, acts as a tiebreaker for consumer
purchasing, enhances brand image)
corporate
social performance
Corporate Citizenship
• Benefits of Corporate Citizenship
 Improved business performance (e.g., positively
impacts bottom-line returns, increases competitive
advantage, encourages cross-functional integration)
 Enhanced company1s marketing efforts (e.g., helps
create a positive company image, helps a company
manage its reputation, supports higher prestige
pricing, and enhances government affairs activities)
 corporate
social performance
Core Elements of Corporate Citizenship
Ethical Business Behavior
1. Engages in fair and honest business practices in its
relationship with stakeholders.
2. Sets high standards of behavior for all employees
3. Exercises ethical oversight of the executive and
board levels.
Stakeholder Commitment
4. Strives to manage the company for the benefit of all
stakeholders
5. Initiates and engages in genuine dialogue with
stakeholders
 corporate
social performance
Core Elements of Corporate Citizenship
Stakeholder Commitment
6. Values and implements dialogue
Community
7. Fosters a reciprocal relationship between the
corporation and community
8. Invests in the communities in which the corporation
operates
Consumers
9. Respects the rights of consumers
10. Offers quality products and services
11. Provides information that is truthful and useful
 corporate
social performance
Core Elements of Corporate Citizenship
Employees
12. Provides a family-friendly work environment
13. Engages in responsible human-resource
management
14. Provides an equitable reward and wage system for
employee
15. Engages in open and flexible communication with
employees
16. Invests in employee development
Investors
17. Strives for a competitive return on investment
 corporate
social performance
Core Elements of Corporate Citizenship
Suppliers
18. Engages in fair trading practices with suppliers
Environment Commitment
19. Demonstrates a commitment to the environment
20. Demonstrates a commitment to sustainable
development
 corporate
social performance
Core Elements of Corporate Citizenship
Suppliers
18. Engages in fair trading practices with suppliers
Environment Commitment
19. Demonstrates a commitment to the environment
20. Demonstrates a commitment to sustainable
development
corporate
social performance
Corporate Social Performace
• For the past few decades, there has been a trend
toward making the concern for social and ethical
issues increasingly pragmatic
• Possible to integrate some of these concerns into a
model of corporate social performance (CSP)
• What companies are able to accomplish
• Results or outcomes of their acceptance of social
responsibility and adoption of a responsiveness
philosophy
corporate
social performance
Corporate Social Performace
• In developing a conceptual framework for CSP, we
not only have to specify the nature (economic, legal,
ethical, philanthropic) of the responsibility, but we
also need to identify a particular philosophy, pattern,
mode, or strategy of responsiveness
• Finally we need to identify the stakeholder issues or
topical areas to which these responsibilities are
manifested
• As the times change, so does the emphasis on the
range of social/stakeholder issues changes and also
varying concern to businesses, depending on the
industry in which they exist
corporate
social performance
Corporate Social Performace
• A bank, for example, is not as pressed on
environmental issues as a manufacturer. Likewise, a
manufacturer is considerably more concerned with
the issue of environmental protection than is an
insurance company
Carroll’s corporate social performance model,
brings together the three major dimensions
1. Social responsibility categories—economic, legal,
ethical, and discretionary (philanthropic)
2. Philosophy (or mode) of social responsiveness e.g. reaction,
defense, accommodation, and proaction
3. Social (or stakeholder) issues involved
consumers, environment, employees, etc.)
 Corporate Social Performance

Figure 2-10 78
 Corporate Citizenship

Corporate Citizenship…

…embraces all the facets of corporate

social responsibility, responsiveness,
and performance.

…serves a variety of stakeholders.

79
 Corporate Citizenship

 A reflection of shared moral and ethical principles

 A vehicle for integrating individuals into the

communities in which they work

 A form of enlightened self-interest that balances

stakeholders’ claims and enhances a company’s
long-term value

Charles J. Fombrum, “Three Pillars of Corporate Citizenship” 80

 Drivers of Corporate Citizenship

Internal Motivators External Pressures

Traditions and values Customers and consumers

Reputation and image Expectations in the community

Business strategy Laws and political pressures

Recruiting and retaining

employees

81