BUSN9000

SUSTAINABILITY &
CORPORATE
RESPONSIBILITY

DR MARIA BALTA

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Why CR?

WHAT DOES CORPORATE WHY ARE YOU INTERESTED? WHAT ARE ARGUMENTS FOR
RESPONSIBILITY MEAN TO YOU? AND AGAINST CR?
Arguments for and against Corporate Responsibility
(CR)
Against For
Restricts the free market goal of profit Addresses social issues business caused and
maximization allows business to be part of the solution
Business is not equipped to handle Protects business self-interest
social activities
Dilutes the primary aim of business Limits future government intervention
Increase business power
Limits the ability to compete in a global Addresses issues by using business resources
marketplace and expertise
Addresses issues by being proactive
Social
By 2050…

The world is expected to

have 50% more people

85% of the population will

live in developing countries

70% of us will live in cities

(50% today)
Economic

By 2050
• 75% of global GDP is
expected to have shifted
to developing countries
Environmental

• Forests account for 30% of all land

area
• Brazil and Indonesia together account
for half of the global tropical
deforestation
Recent Evidence of CSR Interest
An Internet search turns up 168,000,000 plus
response to “corporate social responsibility”
Journals increasingly “rate” businesses (and
NGOs) on socially responsive criteria:
Best place to work
Most admired
Best (and worst) corporate reputation
Reasons for CSR Activities

CSR activities are important to and even expected by the public

And they are monitored worldwide

CSR activities help organizations hire and retain the people they want

CSR activities contribute to business performance

 The history of
corporate
responsibility
Blowfield & Murray
(2019)

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 History of Corporate Responsibility(cont)
2010 2020
Social Entrepreneurship

Business in an era of climate

change

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Page 10
Sustainability
BUSN 9000 Sustainability & Corporate Responsibility
Aim of the module:

• Is a business just responsible for maximizing profit for its owners/shareholders, or does it
have responsibilities to other groups (stakeholders)?

• Three main aims and key aspects of the module:

• To develop critical thought, insight and debate regarding the changing
role of business in today’s global society
• To broaden your views on the role of business in society
• To provide you with the tools, skills, and knowledge to manage
responsibly
a) Introduction to the Module

• Dr Maria Balta (Module Convenor and Seminar Leader )

• E-Mail: M.Balta@kent.ac.uk
• Office hours: by appointment
• Course Structure and Delivery:
Weeks 24-29, 31-35
Lecture : Tuesday 9-10 (Jennison Lecture Theatre)
Seminars: Tuesday 2-3 (SIBSR4), 4-5 (CHXSR2), 5-6 KS20
a) Introduction to the Module

• Your contribution:
• Moodle
• Group presentation
• Presentation and seminar participation: (20%)
• Attendance, preparation, understanding, critical analysis, contribution – innovation, linking issues,
etc.

• Assessment:
• Presentation and seminar participation: (20%)
scheduled to take place weeks 28, 29 & 31 during seminar time.
• individual piece of work = 80%- 4,000 words due 3rd of April 2024
• Core text:
• Blowfield and Murray (2019,2014, 2012), Corporate Responsibility – A Critical Introduction,
Oxford Press
• Smith and Lenssen (2009), Mainstreaming Corporate Responsibility, Wiley
a) Introduction to the Module
Topics

1. Introduction CR: Concepts and Theories

2. Understanding CR: Globalisation, developing economies, and Sustainability
3. Managing and Implementing CR: How CR is managed/Stakeholder management and engagement
4. Managing and Implementing CR: Corporate Governance and CR reporting activities
5. Managing social responsibility ethically
6. Guest speaker: Simon King-Cline, Aspect LTD
7. Reading week
8. Corporate Social Responsibility in the Workplace
9. Ethical marketing, consumerism and Socially Responsible Investment
10. Guest speaker: Professor Thanos Papadopoulos-CSR in Supply Chain Management
11. Critiques and The Future & Revision
12. CSR in Practice
BUSN 9000 Sustainability
& Corporate
Responsibility-
Introduction

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After today’s session,
you should
Appreciate the meanings, origins and perspectives associated with
corporate responsibility

Be able to describe the historical development of corporate

responsibility

Be able to explain and apply selected theoretical perspectives of

business ethics in relation to CR
Definitions

• Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society
( different stakeholders in society over the world)
• Corporate responsibility (CR): Corporations have a responsibility to those groups and individuals that
they can affect, i.e., its stakeholders, and to society at large. Stakeholders are usually defined as
customers, suppliers, employees, communities and shareholders or other financiers.
• Corporate citizenship: The extent to which businesses are socially responsible for meeting legal, ethical
and economic responsibilities placed on them by shareholders.
• In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what
"should be done”
• Although the two are linked in most firms, CR activities are no guarantee of ethical behavior
Corporate Responsibility
What is it….?
• Chiquita: “CSR commits us to operate in a socially responsible way everywhere we
do business, fairly balancing the needs and concerns of our various stakeholders –
all those who impact, are impacted by, or have a legitimate interest in the
company’s actions and performance”.

• Intel: “Corporate Social Responsibility “taking a proactive, integrated approach to

our impact on local communities and the environment not only benefits people
and our planet but is good for our business”.

• Tesco Ireland: “As Ireland’s leading retailer, our stores serve a large number of
communities throughout the country. Our interaction with these communities
reminds us daily about our responsibilities as an employer, as a business, and as a
good neighbor. Our customers want to see more local products. They want to eat
healthy food. They want us to be thoughtful about our impact on their
neighborhood. And they want us to take a lead on the environmental challenges
that face us all.”
Corporate Responsibility
What is it….?
• These broad definitions reflect claims about the
values that companies wish to uphold, such as
honesty, fairness and integrity and these may be set
out in standards or codes of practice…
Corporate responsibility

• Corporate responsibility is defined as:

a) the responsibilities of the business in the context of
the wider society,
b) how those responsibilities are defined and negotiated
c) how they are managed and organized.
Reasons behind the adoption of CSR
Values motivations: conscious desire to achieve and be
accountable for societally beneficial outcomes utilizing
operating a profitable business.
Materiality motivation: the recognition that a successful
business can seek out and address societal challenges with
resultant material benefits.
 Corporate Social Responsibility Continuum
Do more than
required; e.g. Integrate
engage in social
philanthropic objectives
Fight social giving and business
responsibility
goals
initiatives
Maximize
Balance profits
firm’s profits to
and social
the exclusion
objectives
of all else

Do what it
takes to Lead the
make a Comply;
industry
profit; skirt do what
Articulate and other
the law; fly is
social value businesse
below legally
objectives s with best
social required
practices
radar
Corporate Responsibility
What is it….?

WHICH ARE THE MOST WHY? WHICH ARE THE LEAST WHY?
ADMIRED COMPANIES? ADMIRED COMPANIES?
Corporate Responsibility
What is it….?

Business
• What is the purpose of a business?
• For what is it responsible?
• How can business be responsible?
• To whom is it responsible?
Shareholders v. Stakeholders
What is the purpose of the organisation?
Shareholders
(Friedman 1970)
 The only group that has a
moral claim on the
corporation is the people
who own shares of the stock
(that is, the shareholders).
• Goal - Profitability
• Duty to shareholders
• Short term value creation
• Firm as ‘closed system’
• Formal links with
Shareholders
Stakeholders
(Freeman 1984)
 Many groups have a moral
claim on the corporation
because the corporation has
the potential to harm or
benefit them (call these
groups stakeholders)
• Multiple Goals
• Duty to stakeholders
• Long term value creation
• Firm as ‘open system’
• Stakeholder engagement
Responsible for what?

Philanthropy/communities -
Obey the law Environment Sustainability
‘giving something back’

Human rights, worker rights

Market relations Corruption Corporate governance
and welfare
Expectations and Purposes

Johnson and Scholes (2005), Exploring Corporate Strategy

 Carroll’s four part definition
CSR encompasses the economic, legal, ethical and discretionary
(philanthropic) expectations that society has of organizations at a given point
in time

Responsibility Societal Examples

Expectation
Economic Required Be profitable. Maximize sales,
minimize costs, etc.
Legal Required Obey laws and regulations.
Ethical Expected Do what is right, fair and just.
Discretionary Desired/ Be a good corporate citizen.
(Philanthropic) Expected

Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved
Pyramid of CSR in the
developed countries

Philanthropic Responsibilities
Be a good corporate citizen.

Ethical Responsibilities
Be ethical.

Legal Responsibilities
Obey the law.

Economic Responsibilities
Be profitable.
Four Fields of activity of CR
• The starting points, topics and entry opportunities are different for each
company, there is no single path

Market Environment Workplace Community

 Climate protection
 Product quality  Resource consumption  Compatibility of  Company donations
 Product information  Renewable energies family & profession  Sponsoring
 Consumer protection  Environmental burden  Further training &  Award of contract to
 Excluded customer at the site qualification social organizations
segments  Environmental  Equal opportunities &  Foundations
 Suppliers & Purchasing consciousness of diversity  Voluntary engagement
 Fair dealing with employees  Working safety of employees
business partners  Environmental  Employee participation …
management

Economy Ecology Sociology

Business Ethics Development

Consequentialism/Utilitarianism: end justifies the means (consequences of one’s conduct are the ultimate basis
for any judgement about the rightness or wrongness of that conduct)

Non-Consequentialism
•Kantianism: An ethic of Duty (disregards the consequences of an act as a determinant of its moral worth)
•Natural Law: An Ethic of Rights-complementary to Kantian deontologism
 the ‘natural law’, sets limits to the power of rulers. Governments which behave unjustly
transgressed that moral order and their laws could, in extreme cases, be disobeyed.
 The social contract between the government and the people give governments power and through
elections the people can take that power away.
 The natural law conferred rights to the governed. The job of the government is to recognise and
protect human rights (John Locke 1632-1714)
BUT…
•Human rights are not absolute.
Business Ethics Development
Relativism: Values are different. They
are relative to, for example, cultures,
times, places, individuals.
Pluralism: There is no one single moral
theory or principle that should be
accepted as preferable to others. There
are different, diverse, and even mutually
inconsistent ethical positions that should
be recognised; and there is not
necessarily any single moral principle or
set of principles that everyone should
accept.
The Evolving Context for
Business Ethics

• The standards of conduct and moral values governing actions and decisions in the work environment.
• Social responsibility.
• Balance between what’s right and what’s profitable.
• Often no clear-cut choices.
• Levels: individual, organisational, association, societal and international
• The cultural context influences organizational ethics
• Top managers also influence ethics
• The combined influence of culture and top management influence organizational ethics and ethical
behaviors
The Evolving Context for
Business Ethics

• From domestic where ethics are shared

• To international where ethics are not shared when companies:

• Make assumptions that ethics are the same
• Ethical absolutism - they adapt to us
• Ethical relativism - we adapt to them

• To global which requires an integrative approach to ethics

Cultural
Frames of
Reference

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Ferrell, Hirt & Ferrell (2008)
Ways Companies Integrate Ethics

• Top management commitment in word and deed

• Company codes of ethics
• Supply chain codes
• Develop, monitor, enforce ethical behavior
• Seek external assistance
Four Possible Ethical Stances

Johnson and Scholes (2005), Exploring Corporate Strategy

Four Possible Ethical Stances

Johnson and Scholes (2005), Exploring Corporate Strategy

Four Possible Ethical Stances

Johnson and Scholes (2005), Exploring Corporate Strategy

Four Possible Ethical Stances

Johnson and Scholes (2005), Exploring Corporate Strategy

Tesco Steering Wheel
Based on The Balanced Scorecard, Kaplan and Norton (1992, 1993)
Four Possible Ethical Stances

Johnson and Scholes (2005), Exploring Corporate Strategy

What can Managers do?
① Develop effective internal reporting procedures and
processes – guidelines, codes of conduct etc.

② Reward people for using such channels

③ Appoint senior executives to investigate and report on

wrong doing

④ Heavy sanctions for wrong doing

Today, we have:

• Gained an over view of the BUSN 9000 module

• Explored the meaning and origins of corporate responsibility
• Examined business ethics and the links to corporate responsibility
• Discussed some selected theoretical perspectives
• Found some managerial measures to manage ethical dilemmas
Thank You.