Ch. 2 Corporate Citizenship: Social Responsibility, Responsiveness, and Performance

External pressures of corporate citizenship

Customers and Consumers Expectations in the communities Laws and Political Pressures

Social And Financial Performance Relationship Perspectives

Perspective 1. CSP drives the relationship Perspective 2. CFP drives the relationship Perspective 3. Interactive relationship among CSP, CFP, and CR

Modification of the Economic model

Philanthropy Community Obligations Paternalism Motivation is to keep government at arm's length

Legal Responsibility

Obey laws, adhere to regulations, societal expectation required

Arguments for CSR

- It addresses social issues brought on by business, and allows business to be part of the solution. - Enlightened self-interest: businesses must take actions to ensure long-term viability. - Wards off future government intervention. - It addresses issues by using business resources and expertise. - It addresses issues by being proactive. - The public supports CSR.

Alternative views to corporate social responsiveness

- Sethi's 3 stage schema - Frederick's CSR 1, 2, & 3 - Epstein's process view

Arguments Against CSR

- The classical economic view that business' only goal is the maximize profits for owners. - Business is not equipped to handle social activities. - It dilutes the primary purpose of business. - Businesses have too much power already. - It limits the ability to compete in a global marketplace.

Broad View of corporate citizenship

1. A reflection of shared moral and ethical principles 2. A vehicle for integrating individual into the communities in which they work 3. A form of enlightened self-interest that balances stakeholders' claims and enhances a company's long-term value

Evolving meanings of CSR

1. Corporate social responsibility is seriously considering the impact of the company's actions on society. 2. The obligation of decision makers to take actions that protect and improve the welfare of society as a whole, along with their own interests. 3. Supposes that the corporation has economic and legal obligations as well as responsibilities to society that extend beyond these obligations.

Upsurge in Socially Responsible Investing

1. More reliable research on CSP than in the past 2. Investment firms using social criteria have a solid track record 3. Socially conscious 1960's generation is now making investment decsisions

Social Screening

A technique used to screen firms for socially-responsible investment purposes.

Corporate Social Responsiveness

An action-oriented variant of CSR

Ethical Responsibility

Avoid questionable practices. Do what is right, fair, and just. Societal expectation expected

Philanthropic Responsibility

Be a good corporate citizen and give back. Societal expectation desired/expected

Economic Responsibility

Be profitable, maximize sales, minimize costs, societal expectation is required

Global Business Citizen

Business enterprise (including managers) that responsibly exercises its rights and implements its duties to individuals, stakeholders, and societies within and across national borders.

Fredrick's 3 CSR

CSR1 is accountability-focused CSR2 is responsibility-focused CSR3 is refers to corporate social rectitude

Responsiveness

Cannotes a dynamic, action-oriented condition

Corporate Citizenship

Collectively embrace a host of concepts related to CSR and seriously consider the impact of a company's actions on society.

Multiple Bottom Line Perspective

Corporate Social Performance -> Owner Stakeholders, Consumer Stakeholders, Employee Stakeholders, Community Stakeholders, Other Stakeholders

Narrow View of corporate citizenship

Corporate community relations. Embraces the functions through which business internationally interacts with nonprofit organizations, citizen goups, and stakeholders at the community level

CSR Pressure Response

Defensive Approach: Alleviate pain. Cost-benefit Approach: Firms will undertake those activities if they can ID direct benefits that exceed cost Strategic Approach: Firms recognize the changing environment and engage with CSR as part of a deliberate emergent strategy Innovation and learning Approach: Active engagement with CSR provides new opportunities to understand the marketplace and enhances organizational learning, which leads to competitive advantage

Internal Motivators and External Pressures

Drivers of Corporate Citizenship are ______ & ______.

The CSR Equation

Economic + Legal + Ethical + Philanthropic = Total Corporate CSR

CSR Historical Perspective

Economic Model Legal Model Social Model Stakeholder Model

REQUIRED components of CSR

Economic, legal, and ethical Philanthropic = DESIRED/EXPECTED

Corporate citizenship

Embraces all the facets of corporate social responsibility, responsiveness, and performance - serves a variety of stakeholders companies have certain responsibilities that they must fulfill in order to be perceived as good corporate citizens

Epstein's Process View

Emphasizes the process of social responsiveness

Responsibility

Implies a state or condition of having assumed an obligation

Benefits of corporate citizenship

Improved Employee Relations Improved customer relationships Improved business Performance Enhanced marketing efforts

Business for Social Responsibility (BSR)

Is a consulting business firm and global business network helping organizations to develop sustainable business strategies and solutions

Triple bottom line perspective

Key Spheres of sustainability by John Elkington are economic, social, and environmental The goal is corporate sustainability.

Global Corporate Citizenship

Multinational enterprises are expected to be good corporate citizens in the countries in which they do business. (Are expected to tailor initiatives to conform to cultural environment) Internatioanl academics and business people do research on and advocate CSR and corporate citizenship concepts

Corporate Social Responsibility

Seriously considering the impact of a company's actions on society. Requires the individual to consider their acts in terms of a whole social system and holds them responsible for the effects of their acts anywhere in that system.

Carroll's CSP Model

Social Responsibility: Economic, legal, ethical, and discretionary (philanthropic) Philosophy of social responsiveness: Reaction, defense, accommodation, and pro-action Social Issues Involved: Consumers, environment, employees, and others

Sethi's Three-Stage Schema

Social obligation social responsibility social responsiveness

Stages of Corporate Citenship

Stage 1: Elementary (Credibility) Stage 2: Engaged (Capacity) Stage 3: Innovative (Coherence) Stage 4: Transforming (Commitment)

4 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.

Stakeholder Bottom-Line Perspective

The view that a firm has multiple bottom lines that benefit for corporate social performance The impacts of benefits of social performance cannot be fully measured or appreciated by considering only the impact on the financial bottom line

Socially Responsible or Ethical Investing

This movement emerged in the 1970's Over 2.7 trillion in socially responsible investments in the US today

Internal motivators of corporate citizenship

Traditions and values Reputation and image Business strategy Recruiting and retaining employees

Corporate Social Responsiveness

_________ emphasizes action and activity

Corporate Social Responsibility

_________ emphasizes obligation and accountability

Corporate Social Performance

_________ emphasizes outcomes and results

Convergence

_________ in global CSR approaches will continue as the world economic stage becomes the common environment within which businesses function