Chapter 2 Corporate Citizenship

Arguments against CSR (5)

1) Classical economy: if the market cannot solve the problem, the government has to. 2) Business not equipped - oriented towards finance and not all expertise needed. 3) Dilutes business purpose: may distract? 4) too much power already, why should we add more duties? 5) Global competitiveness: not a valid argument, has become integrated thanks to technology.

Socially Responsible

1) Consists of special interest groups, investors, etc 2) suggests three reasons for it: more reliable research, investment firms have growing track record, no sacrifice gains or principles, and socially conscious 1960's generation is now making investment decisions

Ethical Investing

1) Consists of special interest groups, investors, etc. 2) suggests three reasons for it: more reliable research, investment firms have growing track record, no sacrifice gains or principles, and socially conscious 1960's generation is now making investment decisions.

Concepts of Caroll's 4 part definition of social responsibility

1) Economic: be profitable. 2) legal: obey all laws adhere to regulations and policies. 3) ethical: avoid questionable practices. 4) philanthropic: be a good corporate citizen; provide programs supporting the community.

Arguments supporting CSR (5)

1) Enlightened self interest. 2) warding off government regulations. 3) resources available. 4) pro-acting vs reacting. 5) public support.

Company CSR program eligibility concepts (5)

1) be at best practice level: distinctive, innovative, and effective. 2) have a significant measurable impact. 3) offer broad potential for social and economic benefits. 4) be substantial and feasible within a business environment and its mission. 5) be adaptable.

External drives of corporate citizenship (3)

1) customers and consumers. 2) expectations and responsibility. 3) laws and political pressures.

Business Case for CSR (4)

1) defensive approach. 2) cost-benefit approach. 3) strategic approach. 4) innovation and learning.

Benefits of CSR (4)

1) improved employee relations. 2) improved relationships. 3) improved performance. 4) enhances a company's marketing efforts.

Internal drives of Corporate Citizenship (4)

1) traditions and values. 2) reputation and images. 3) business strategy. 4) recruitment and retainment.

Social and financial relationship performance comparisons (6)

1.) socially responsible firms more likely to be successful. 2.) financial performance is a driver of social performance (not as well studied). 3.) there is an interactive relationship between the two. 4.) Stakeholder bottom line perspective: one or multiple company bottom lines? - stakeholders will influence performance. 5.) Triple bottom line: encompasses 3 key spheres of responsibility (econ, socio, and enviro). 6.) corporate sustainability: goal of above approach, create long term shareholder value.

Lassez-Faire Economy

1950's grew up to include more focus on welfare, safety and other benefits. Now is less general, more focused and diverse in its hot topics.

Vis-a-vis Economic and Legal Objection of Business

A corporation not only has economic and legal obligations, but also responsibilities to society which extend beyond those obligations.

Corporate Social Responsiveness

Action-oriented variant of corporate social responsibility.

Social performance model

Covers social responsibility (pro-action, accommodation, defense, reaction), social issues (stakeholders, occupational safety, environment, consumerism, product safety, discrimination).

Economic Responsibilities

Business institutions should have the objective of producing goods and services that society wants at fair prices - prices that society thinks represent the true value of of the goods and services delivered and that provide business with profits adequate to ensure its survival and growth and to reward its investors.

Community Obligations

Business's responsibility to improve, beautify, and uplift.

Legal Responsibilities

Businesses are expected to operate within the legal boundaries that the law sets. They reflect society's view of codified ethics in the sense that they embody the basic notions of fair practices as established by our lawmakers.

Ethical Responsibilities

Businesses should embrace those activities and practices that are expected or prohibited by society even though they are not codified into law. They embody the full scope of norms, standards, values, and expectations that reflect what consumers, employees, shareholders, and the community regard as fair, just,and consistent with the respect for or protection of stakeholders' moral rights.

Philanthropy

Contributions to charity and other worthy causes.

Corporate Social Performance Model

Developed by Carroll. Brings together 3 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.) Used as a conceptual aid to understand the distinctions among concepts of corporate social responsibility that have appeared in literature: responsibility, responiveness, social issues/stakeholders.

Sustainability

Economic, social, and environmental. Of, relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged.

Primary corporate citizenship concepts (4)

Embraces all that is implied in the concepts of social responsibility, responsiveness and performance. 1) a reflection of shared moral and ethical principles. 2) a vehicle for integrating individuals into the communities they work. 3) form a enlightened self interest that balances all stakeholder's claims and enhances long-term value.

Corporate Sustainability

Encompasses economic, social, and environmental spheres. It is the goal of triple bottom-line, create long term shareholder value.

Business for Social Responsibility (BSR)

Example of CSR being front-burner issue in business. Formed to fill an urgent need for a national business alliance that fosters socially responsible corporate policies. Levi Strauss & Co., Cisco Systems, GE, Wal-Mart, Mattel, Honeywell, Coca-Cola, UPS, Tom's of Maine, are in it. It seeks to create just and sustainable world by working with companies to promote more responsible business practices, innovation and collaboration.

Corporate Social Performance

Intended to suggest what really matters is what companies are able to accomplish - the results or outcomes of their acceptance of social responsibility and adoption of corporate responsiveness philosophy.

Evolving Meaning of CSR

More seriously considering the impact of the company's action on society.

Philanthropic Responsibilities

Not literally responsibilities. They are voluntary, guided only by business's desire to engage in social activities that are not mandated, not required by law, and not generally expected of business in an ethical sense. Reflects current expectations of business by the public.

Corporate Citizenship

Requirement in which the individual has to consider their acts in terms of a whole societal system, and this responsibility holds them responsible for the effects of their acts anywhere in the system. Collectively enhances the host of concepts related to CSR.

Corporate Social Responsibility

Seriously considering the impact of the company's actions on society. Requires individual to consider his or her acts in terms of a whole societal system, and holds him (or her) responsible for the effects of his (or her) acts anywhere in that system.

Pyramid of Corporate Social Responsibility (CSR)

Similar to Caroll's definition of social responsibility but different form. Companies reap rewards from CSR and enjoy enhanced reputations.

Types/Factors of CSR (3)

Social responsibility (obligation and accountability), social responsiveness (action, activity), social performance (outcomes, results).

Triple-Bottom Line

Takes into consideration the three key spheres of sustainability, economic, social, and environmental; rather than only the economic sphere of sustainability.

Historical Aspects of CSR (5)

Traditional/economic model: the invisible hand, legal model (years later) - affected by society's expectations, social model, stakeholder model - sustainability.

Paternalism

When business does a considerable amount of work in governing people. A policy or practice of treating or governing people in a fatherly manner, especially by providing for their needs without giving them rights or responsibilities.