CSR (Chapter 11)

What distinguishes involuntary from voluntary stakeholders?

Involuntary stakeholders, like local communities affected by a company's operations without choice, contrast with voluntary stakeholders who actively engage with the company by choice, like shareholders or employees.

Shareholder Value

The measure of a company's success, often determined by financial returns and benefits for its shareholders, emphasizing profit maximization and shareholder wealth.

Codes of conduct

These are sets of guidelines or rules outlining expected behavior and ethical standards for employees within a company. Examples include policies on anti-corruption, diversity, and environmental sustainability.

Governance mechanisms

These are structures or systems within an organization designed to ensure ethical behavior, compliance with regulations, and effective management practices. This includes boards of directors, oversight committees, and internal control systems.

What can corporate codes of ethics do?

These codes establish ethical guidelines and behavior standards for employees and the organization, promoting integrity, fair practices, and responsible decision-making.

Institutional structures supporting CSR

These refer to frameworks, policies, and initiatives established to promote CSR. Examples include sustainability departments, community engagement programs, and partnerships with non-profit organizations.

Corporate social responsibility (CSR) occurs when .... 1 Organizations establish a minimum code of conduct that guides their behaviour . 2 Organizations market their goods and services as good for the community . 3 None of these . 4 Organizations seek to exceed the minimum legal obligations to stakeholders specified through regulation and corporate governance

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A Code of Conduct is 1 A set of rules that organizations adopt in order to ensure ethical behaviour . 2 A set of rules that translates the law into a more meaningful and ethical organizational guideline . 3 A set of rules that organizations adopt in order to ensure sustainability . 4 A set of practices that organizations adopt in order to ensure ethical behaviour

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According to Chapter 11 of your textbook, Munro (1992) concludes that codes are almost useless to employees who are faced with particular dilemmas because... 1 Ethical rules often compete with each other, so codes are harder to apply . 2 People lie, so it only appears they are following a code . 3 None of these . 4 Employees are too thick (stupid) to make wise decisions

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The Ronald McDonald's house for sick children is a good example of 1 two and three . 2 Ethics as marketing tool . 3 Commitment to the triple bottom line (people, planet, profit) . 4 Strategic philanthropy

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Triple bottom line reporting accounts for 1 People, planet, profit . 2 Fortune, future, flexibility . 3 People, planet, peace . 4 Profit, principles, people

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Ethics as practice focuses on 1 How ethics affects business practice and especially the triple bottom line (people, planet, profits) . 2 Both one. and three. . 3 How practical certain ethical rules are and how they can be implemented effectively . 4 How rules are translated into practices and how are they enacted in everyday organizational contexts

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Serge Latouche's argument that the pursuit of economic growth causes inequality to grow because consuming more goods and services produces greater collective costs is associated with ____________ 1 Growth Economics . 2 Triple Bottom Line . 3 Stakeholder theory . 4 Degrowth economics

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Corporate greening could involve 1 Green facilities that are designed to minimize energy waste and use, . 2 All of these . 3 Educating staff and learning about being green as widely as possible. . 4 A continuing program of educating employees and spreading green transportation

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Corporate greening is defined as 1 A process of introducing principles of Corporate Social Responsibility in as many facets of the business as it is possible . 2 A process that involves trying to adopt green principles and practices in as many facets of the business as it is possible. . 3 All of these . 4 A process of introducing Codes of Conduct in as many facets of the business as it is possible

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Usually business ethics is best understood as .... 1 Reflecting on morals and prescribing what ought to be . 2 Reflecting on and recommending concepts of right and wrong behaviour in business practice. . 3 The science of values and their justification . 4 The theory of making profits while acting ethically

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In the most basic sense sustainability means ... 1 To always act ethically . 2 To do things right . 3 To ensure that resources are renewed . 4 To do the right thing

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Which are the two different schools of thought in the business ethics literature? 1 The descriptive and the moral school . 2 The normative and the sustainability school . 3 The normative and descriptive school . 4 The positive and the normative school

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CSR

A concept where companies integrate social and environmental concerns into their operations, voluntarily going beyond legal requirements to contribute positively to society.

What is aspirational control? And how does CSR work as

Aspirational control involves the use of ideals or aspirations to influence and guide behavior within an organization.

Ethics as Managerial Control: what are their main assumptions and what are their limitations?

Assumption: Codes of ethics function as tools to regulate and control employee behavior within organizations. Limitations: Limits individual ethical autonomy within the organization, potentially suppressing diverse ethical viewpoints among employees. Corporate Example: Company Y establishes strict codes of conduct for employees, regulating their behavior both within and outside of work. It implements surveillance measures and guidelines governing social media usage, aiming to align employees' actions with organizational values.

Ethics as a Political Tool: what are their main assumptions and what are their limitations?

Assumption: Corporations undertake regulatory roles traditionally managed by governments, becoming rule-makers rather than just rule-takers. Limitations: Raises concerns about corporate power, potentially granting excessive political influence without democratic accountability. Criticized for self-regulating to avoid government intervention rather than addressing underlying issues. Corporate Example: Company W engages in self-regulation regarding labor standards and environmental impact, but observers note it does so primarily to preempt strict government regulations, rather than to genuinely solve ethical issues.

Business Case Approach: what are their main assumptions and what are their limitations?

Assumption: Ethical behavior aligns with improved financial performance. Ethical conduct leads to increased profits, presenting a win-win scenario . Limitations: Assumes ethics always correlate positively with financial gains. Critics argue it can lead to selective ethics, focusing only on situations where ethics align with profitability. Corporate Example: An example illustrating this approach could be Company X, which emphasizes ethical practices in its supply chain, asserting that sustainability efforts result in increased profitability. It showcases its commitment to sustainability in public statements and reports.

Ethics as Risk Management: what are their main assumptions and what are their limitations?

Assumption: Ethics serve as a protective measure against reputational harm and financial risks for organizations. Limitations: Prioritizes risk avoidance over genuine ethical behavior, potentially leading to using codes of ethics as a shield against accountability for systemic issues. Corporate Example: Company Z incorporates sustainability measures into its ethical code, stating that any ethical violations are against organizational policy. It uses its code to deflect responsibility in case of any ecological misconduct by individual employees.

What is the difference between believers and straddlers?

Believers embrace CSR positively, either due to ethical reasons (believing in CSR's purpose) or for personal gain (using CSR for career advancement). Straddlers, on the other hand, exhibit ambivalence towards CSR, acknowledging its importance but maintaining skepticism, particularly regarding its corporate utilization and branding.

What is aspirational control? And how does CSR work as aspirational control? Furthermore: why is CSR particularly effective in exercising aspirational control?

CSR (Corporate Social Responsibility) operates as aspirational control by creating an idealized image of the corporation, linking employees' personal aspirations, values, and ethics with the organization's objectives. It is effective in exercising aspirational control because CSR aligns with employees' desires to feel socially responsible and morally upright. It connects career advancement with a sense of personal fulfillment, motivating employees to excel in their roles and fostering organizational commitment.

How would you differentiate CSR as 'greenwash' from other commitments?

CSR might be considered 'greenwash' when companies exaggerate or falsely project their commitment to environmental responsibility without genuine action or substantial impact on sustainability.

What is corporate social responsibility (CSR)?

CSR refers to a company's voluntary commitment to consider social and environmental impacts in its operations, going beyond legal requirements to contribute positively to society

Describe in your own words the term CSR and what it is about.

Corporate Social Responsibility (CSR) is a business concept focusing on a company's responsibility to operate ethically and contribute positively to society. It involves integrating social and environmental concerns into business operations while maintaining profitability. CSR goes beyond financial gains, emphasizing moral and ethical obligations towards various stakeholders, including employees, communities, and the environment.

What are corporate codes of conduct? What standards do they contain? Describe in your own words and

Corporate codes of conduct are specific documents that outline ethical guidelines or moral rules governing the behavior and operations of a company. These codes serve as management tools aimed at offering ethical guidance, support, and setting expectations for employees or suppliers affiliated with the company. They typically include various standards related to labor practices, environmental impact, human rights, and business conduct. For example, standards within codes of conduct might encompass fair labor practices, workplace safety, non-discrimination policies, fair wages, environmental sustainability, and compliance with local laws and regulations. An example of a standard within a corporate code of conduct could be the prohibition of child labor, ensuring that no workers under the legal working age are employed in any part of the supply chain. Another standard might focus on workplace safety, emphasizing the provision of adequate safety measures and training to prevent accidents.

Do cynics resist corporate CSR practices? What is the effect of their attitude?

Cynics participate in corporate CSR practices despite their skepticism. Their attitude highlights a nuanced perspective where they see through the facade of CSR but engage in it, viewing it as an inevitable part of corporate reality. The effect of their attitude is that despite their cynicism, they contribute to maintaining the idealist image promoted by CSR within the organization.

Codes of Conduct

Defined sets of guidelines or principles that outline expected behavior and ethical standards for individuals or organizations within a specific context.

What is 'ethical sealing' and how does it work? What are the broader societal effects of ethical sealing?

Ethical sealing' refers to the phenomenon where CSR practices divert attention from potentially questionable corporate practices by focusing on philanthropic aspects like 'giving back' to society. It works by highlighting the positive contributions of the firm while ignoring the ethical implications of resource acquisition or other questionable actions. The broader societal effects include the masking of negative externalities and the portrayal of the organization as exceptionally ethical or virtuous, which deflects attention from fundamental issues.

What is an individual and what is an organizational (bureaucratic) responsibility?

Individual responsibility relates to personal moral actions and decisions, while organizational responsibility encompasses an entity's duty to act ethically and sustainably within its operations and interactions with stakeholders.

Stakeholders

Individuals or groups affected by or involved in a company's actions, including shareholders, employees, customers, suppliers, communities, and more.

Business Ethics

Moral principles guiding business conduct, involving fair practices, honesty, integrity, and responsible decision-making.

Critical Views of Business Ethics

Perspectives that challenge the alignment of business practices with ethical principles, often questioning the ethics of profit-driven motives and corporate behavior.

Describe philanthropic and the risk management approach to CSR.

Philanthropic approach: This involves charitable giving and community support as part of CSR activities. Companies donate to charities, sponsor events, or initiate community development projects to demonstrate social responsibility. Risk management approach: This approach focuses on minimizing risks associated with unethical practices that could harm a company's reputation or lead to financial losses. It involves implementing compliance systems, ethical guidelines, and risk assessment strategies.

Name some of the main criticisms on using codes of conduct for improving labor standards in global supply chains.

Several criticisms are leveled against the use of codes of conduct to enhance labor standards in global supply chains. Some of these criticisms include: Lack of effective enforcement mechanisms: Codes of conduct may lack robust enforcement measures, leading to non-compliance by suppliers or firms. Inadequate monitoring and auditing: The effectiveness of audits to detect and address labor violations within the supply chain might be limited or biased. Reliance on voluntary compliance: Codes of conduct are often voluntary and might lack legal obligations, resulting in companies adhering to them at their discretion. Insufficient transparency: Some critics argue that codes of conduct lack transparency, and information about supplier compliance might not be readily accessible to external stakeholders.

what are some of the criticisms that have brought forward with regards to this view?

Short-Term Focus: Critics argue that the emphasis on maximizing shareholder wealth may result in short-term decision-making rather than considering long-term sustainability. Neglect of Other Stakeholders: The view neglects the interests of other stakeholders (employees, communities, environment), leading to potential societal and ethical concerns. Lack of Accountability: It doesn't hold firms accountable for externalities or societal impacts beyond profit margins.

Describe the term stakeholder in your own words and name at least five different examples of stakeholders.

Stakeholders are individuals or groups that have an interest in or are affected by the actions of an organization. Examples include: Employees Customers Shareholders Suppliers Government/regulatory bodies

What are the different types of stakeholder interests? Which are the most contested?

Stakeholders can have diverse interests, including financial gains (shareholders), employee welfare, customer satisfaction, supplier partnerships, and community well-being. Shareholders' financial interests are often more contested.

To which of the shortcomings of corporate codes of conducts does the Bangladesh Accord respond?

The Bangladesh Accord addresses various shortcomings associated with corporate codes of conduct, particularly in terms of enforcing labor standards in global supply chains. Specifically, it responds to the shortcomings related to: Transparency: The Accord significantly enhances transparency by making all inspection reports publicly available, enabling external stakeholders to scrutinize and hold accountable the participating firms and factories. Legal binding: Unlike voluntary codes of conduct, the Accord imposes legal obligations on its members. Companies joining the Accord commit to adhering to its outlined rules and requirements, thus enhancing accountability through legal enforcement. Support for improvement: The Accord provides support to suppliers in improving factory safety, offering financial assistance and committing to sustained relationships to facilitate remediation efforts. Collective effort: It represents a shift from individually implemented and audited codes of conduct to a more collective approach, fostering cooperation between firms and trade unions to address labor standards more effectively within the garment industry supply chain. These responses by the Bangladesh Accord signify a departure from the limitations commonly associated with traditional corporate codes of conduct, aiming to enhance accountability and improve labor standards in a more comprehensive and enforceable manner.

Corporate Greening

The adoption of environmentally friendly practices by businesses, such as reducing carbon emissions, recycling, or implementing sustainable operations.

In what ways are these approaches limited?

The philanthropic approach might lack systemic change and might be more about perception than genuine impact. The risk management approach may focus on avoiding negative impacts rather than proactively creating positive social change.

What are the basic assumptions underlying the shareholder view of the firm

The shareholder view of the firm is rooted in the belief that the primary goal of a corporation is to maximize profits for its shareholders. Some basic assumptions underlying this view include: Profit Maximization: The primary responsibility of the firm is to generate maximum financial returns for its shareholders. Legal Compliance: Firms should operate within the boundaries of the law while pursuing profit. Shareholder Primacy: The interests of shareholders take precedence over those of other stakeholders.

Describe the characteristics of the different reactions of employees to CSR.

The text illustrates three distinct reactions of employees to CSR: Believers: Individuals strongly advocate for CSR, perceiving it positively either due to ethical purposes (idealists) or for career advancement (opportunists). Straddlers: Employees exhibit ambivalence towards CSR, acknowledging its importance but expressing skepticism, particularly about its use for corporate branding. Cynics: Employees express skepticism and cynicism towards CSR, seeing through the facade of idealized CSR while still participating in CSR activities.

Greenwashing

When companies falsely project an environmentally responsible image or exaggerate their commitment to sustainability to mislead consumers or stakeholders.