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    Social Responsibility of Business

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    Vinay Jain
    This document discusses corporate social responsibility and its importance for businesses. It covers the traditional view of CSR focusing on philanthropy, the benefits of CSR for businesses and society, the economic, legal, ethical and discretionary responsibilities of CSR, identifying stakeholders and addressing their interests, arguments for and against CSR, how CSR relates to corporate mission and profitability, principles of successful collaborative social initiatives, and the future of CSR.

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    Social Responsibility of Business

    Uploaded by

    Vinay Jain
    95 views21 pages
    This document discusses corporate social responsibility and its importance for businesses. It covers the traditional view of CSR focusing on philanthropy, the benefits of CSR for businesses and society, the economic, legal, ethical and discretionary responsibilities of CSR, identifying stakeholders and addressing their interests, arguments for and against CSR, how CSR relates to corporate mission and profitability, principles of successful collaborative social initiatives, and the future of CSR.

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    This document discusses corporate social responsibility and its importance for businesses. It covers the traditional view of CSR focusing on philanthropy, the benefits of CSR for businesses and society, the economic, legal, ethical and discretionary responsibilities of CSR, identifying stakeholders and addressing their interests, arguments for and against CSR, how CSR relates to corporate mission and profitability, principles of successful collaborative social initiatives, and the future of CSR.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    95 views21 pages

    Social Responsibility of Business

    Uploaded by

    Vinay Jain
    This document discusses corporate social responsibility and its importance for businesses. It covers the traditional view of CSR focusing on philanthropy, the benefits of CSR for businesses and society, the economic, legal, ethical and discretionary responsibilities of CSR, identifying stakeholders and addressing their interests, arguments for and against CSR, how CSR relates to corporate mission and profitability, principles of successful collaborative social initiatives, and the future of CSR.

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    of 21

    Corporate Social Responsibility

    Unit 2 : Introduction to Strategic


    Intent and Choice of Strategy

    Business Policy and Strategic Management


    MHRM Semester IV
    Learning Objectives
    1. Understand the importance of CSR
    2. Compare advantages of collaborative
    social initiatives
    3. Explain the 5 principles of collaborate
    social initiatives
    4. Understanding business ethics
    5. Explain relevance of business ethics to
    strategic management practice.

    3-2
    Why Social Responsibility?
    The traditional model
    Philanthropy in response to
    Social appeals for help from society
    and social investment in
    projects of long-term
    Responsibility importance to the company

    The benefits of business This is the core


    •Investment activity
    Business •Jobs created
    •Taxes paid of the company
    •Goods & Services providing the
    •Technology transfer
    •Import substitution goods and services
    •Export earnings society wants
    •Development of suppliers
    •Human Resources
    Development
    Four Part Model of Social Responsibility
    Economic – the duty of managers, as agents of the company
    owners, to maximize stockholder wealth These include :
     Maximise sales revenue.
     Minimize costs (administrative, production, marketing,
    distribution).
     Make wise strategic decisions.
     Be attentive to dividend policy

    Legal – the firm’s obligations to comply with the laws that


    regulate business activities . These include:
     Obey all laws; adhere to regulations: Environmental
    laws, Consumer laws, Laws affecting all employees.
     Obey Foreign Corrupt Practices Act.
     Fulfill all contractual obligations
    3-4
    Ethical – the company’s notion of right and proper business
    behavior. These include:
     Avoid questionable practices.
     Respond to “spirit” of laws.
     Assume law is a floor behaviour; operate above minimum
    required by law.
     Assert ethical leadership.

    Discretionary / Philanthropic– voluntarily assumed by a


    business organization. These include:
     Corporate contributions.
     Programs supporting community/education.
     Community involvement/improvement; volunteerism
    Stakeholder Approach

    According to the Stakeholder Approach:


     In defining or redefining the company
    mission, strategic managers must
    recognize the legitimate rights of the
    firm’s claimants.
     These include outside stakeholders
    affected by the firm’s actions.

    3-6
    Perceived Stakeholders
     Customers
     Suppliers
     Government
     Stockholders
     Employees
     Society

    3-7
    Stakeholder’s View

    Stakeholder Group Addressed and Affected


    CSR Component Owners Consumers Employees Community Others

    Economic 1 4 2 3 5
    Legal 3 2 1 4 5
    Ethical 4 1 2 3 5
    Philanthropic 3 4 2 1 5
    Steps to Incorporate Stakeholders:

    1. Identification of stakeholders
    2. Understanding stakeholders’ specific claims
    vis-à-vis the firm
    3. Reconciliation of these claims and assignment
    of priorities
    4. Coordination of the claims with other elements
    of the company mission

    3-9
    Corporate Social Responsibility (CSR)
    Arguments For
     Addresses social issues  Limits future
    business caused and government
    allows business to be intervention
    part of the solution  Addresses issues by
     Protects business self- using business
    interest resources and expertise
     Addresses issues by
    being proactive
    Corporate Social Responsibility (CSR)
    Arguments Against
     Restricts the free  Increase business
    market goal of power
    profit maximization  Limits the ability to
     Business is not compete in a global
    equipped to handle marketplace
    social activities
     Dilutes the primary
    aim of business
    Dynamics of Social Responsibility
     Inside vs. Outside Stakeholders
     Duty to serve society plus duty to serve
    stockholders
     Flexibility is key
     Firms differ along:
     Competitive Position
     Industry
     Country
     Environmental Pressures
     Ecological Pressures

    3-12
    CSR & Profitability
     Corporate social responsibility
    (CSR), is the idea that business has a
    duty to serve society in general as
    well as the financial interests of
    stockholders.

     The dynamic between CSR and


    success (profit) is complex. They are
    not mutually exclusive, and they are
    not prerequisites of each other.

    3-13
    Factors Complicating a
    Cost-Benefit Analysis of CSR:
    1. Some CSR activities incur no dollar costs at all. In
    fact, the benefits from philanthropy can be huge.
    2. Socially responsible behavior does not come at a
    prohibitive cost.
    3. Socially responsible practices may create savings,
    and, as a result, increase profits.
    4. Proponents argues that CSR costs are more than
    offset in the long run by an improved company
    image and increased community goodwill.

    3-14
    CSR’s Effect on Mission
    Statement
     The mission statement embodies what company
    believes
     Managers must identify all stakeholder groups
    and weigh their relative rights and abilities to
    affect the firm’s success

    3-15
    Management Ethics
    The Nature of Ethics in Business:
     Belief that managers will behave in an ethical
    manner is central to CSR
     Ethics – the moral principles that reflect
    society’s beliefs about the actions of an
    individual or a group that are right and wrong
     Ethical standards reflect the end product of a
    process of defining and clarifying the nature
    and content of human interaction

    3-16
    Satisfying Corporate Social
    Responsibility

     Conflicting pressures on executives


     The CSR Debate: centuries old
     There are mutual advantages to using
    Collaborative Social Initiatives (CSIs)

    3-17
    Continuum of Corporate Social
    Responsibility Commitments

    3-18
    Five Principles of Successful CSIs

    1. Identify a Long-Term Durable Mission


    2. Contribute “What We Do”*
    *This is the most important principle
    3. Contribute Specialized Services to a
    Large-Scale Undertaking
    4. Weigh Government’s Influence
    5. Assemble and Value the Total Package of
    Benefits

    3-19
    The Limits of CSR Strategies
     Some companies have embedded social
    responsibility and sustainability
    commitments deeply in their core strategies.
     Larger companies must move beyond the
    easy options of charitable donations but also
    steer clear of overreaching commitments.
     CSR strategies can also run afoul of the
    skeptics—the speed of information on the
    Internet makes this an issue with serious
    ramifications.

    3-20
    The Future of CSR
     CSR is firmly and irreversibly part of the
    corporate fabric
     Corporations will face growing demands for social
    responsibility contributions far beyond simple
    cash or in-kind donations
     The public’s perception of ethics in corporate
    America is near its all-time low
     Even when groups agree on what constitutes
    human welfare, the means they choose to achieve
    it may differ

    3-21

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