Business and society Chapter 3

Corporate Social Responsibility

CSR

Social enterprise

A business that adopts social benefits as its core mission and uses its resources to improve human and environmental well-being. Primary purpose is not to maximize return to shareholders.

B Corporation

A business that is certified by an external organization to verify the blending of its social objectives with its financial goals. Also called a "benefit corporation"

The Meaning of Corporate Social Responsibility

A corporation should act in a way that enhances society and its inhabitants and be held accountable for any of its actions that affect people, their communities, and their environment

Social entrepreneur

An individual driven to create and sustain social value rather than solely economic value in business. Are individuals who act boldly to pursue opportunities, attract support, and build new organizations. Social entrepreneurship

1960s - 1970s

Corporate social responsiveness

1950s - 1960s

Corporate social stewardship,

1980s - 1990s

Corporate/business ethics

1990s - 2000s

Corporate/global citizenship,

arguments for corporate social responsibility balances corporate power with responsibility.

Discourages government regulation. Promotes long-term profits for businesses. Improves stockholders relationships. Enhances business reputation.

Multiple responsibilities of business include

Economic responsibilities Social responsibilities Legal responsibilities

The Meaning of Corporate Social Responsibility

It implies that harm to people and society should be acknowledged and corrected if at all possible

The Meaning of Corporate Social Responsibility

It may require a company to forge 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

Arguments against corporate social responsibility

Lowers economic efficiency and profit. Imposes unequal cost among competitors. Imposes hidden costs passed on to stockholders. Requires skills business says may lack. Places responsibility on businesses rather than individuals

Microfinance

Occurs when financial organizations provide loans to low-income science or a community of borrowers who traditionally lack access to banking or related services.

Reputation

Refers to the desirable or undesirable qualities associated with an organization or its actors that may influence the organization's relationship with its stockholders.

Bottom of the pyramid

Refers to the poorest people in the world - nearly four million who earn less than $2.50 a day.

Iron law of responsibility

in the long run, those who do not use power in ways that society considers responsible will tend to lose it

Positive effects to corporate power

include commanding more resources, producing at lower costs, planning further into the future, and bring new products, technologies, and economic opportunities to developing societies

Negatives effects to corporate power

include disproportionate influence on politics, shape tastes, dominate public discourse, divide markets, and squash competition

The tremendous power of the world's leading corporations has both

positive and negative effects

Corporate power

refers to the capability of corporations to influence government, the economy, and society, based on their organizational resources