Chapter 6: Corporate Social
Responsibility
Basic Premises of CSR
Business Leaders- long term
company values is based on
capability of enterprise to respond to
society changing needs.
Consumers- search for products &
services to companies they believe
doing the right thing
Employees- have preference to
work for companies whom share
similar values & mission.
Investors- look for companies that
recognize & manage risk and are
entrepreneurial in terms of attitude.
Local Communities- want to know
that businesses are being good
citizens.
Media- expose some examples best
or worst practices to spotlight
NGO- expose these examples of
irresponsible corporate conduct and
campaign greater corporate
accountability
Regulators- want to make certain
that business activities not only
generate business opportunities,
jobs but also help solve serious
problems.
Specific Relevance of CSR
Changing Social Expectation
Consumer & public expect more
from companies who produce
product and services.
Competitive Labor Markets
Employees nowadays are more
concern not only on other benefits
and take home pays but also
business philosophy that match their
principle.
Disclosure Demands by
Stakeholders
Stakeholder know their roles and
right it includes right to be informed.
People can demand information
about corporate conduct w/ more
pressure than before.
Dwindling Government Role
Govt in past rely in strict legislation
and regulations to deliver social and
environmental services. There is now
what we call govt disconnection or
failure of regulations.
Globalization
Borderless transactions and the
increasing influence of the media on
global perspective. There is power in
number. Consumer can easily initiate
collective action.
Pressure From Investors
Ethical standard is part of the system
in assessing company performance.
Supplier Relations
Stakeholders are more concern in
business dealings, companies take
step in make certain that their
partners do things in a socially
responsible approach possible.
Wealth and Vulnerabilities
Consumer can afford to be choosy
and picky on the products they buy,
corporations therefore has to
operationally align itself w/ this
consumer tendencies.
Ethical Leadership
Is a leadership that is concerned in
leading a manner that respect the rights,
dignity and stake of others. It focuses how
leaders employ their business and
political power in the decisions they make
and actions they engage into.
Ethical Decision Making Process in
Organization
Ethics in an organization refers to the
system , values, philosophies and
principle that govern the behavior of
organizational member which are the
consequences of organizational
pronouncement.
Ethical decision making is the process
of trying to established organizational
values from which ethical decision will
based from.
Decision making is essential process
for organizational effectiveness. The
ff. may help decision makers of
organizations lay down decisions aligned
w/ CSR principle:
Withdraw
Before you look objectively, step back
first. Have a calibrated response for
thrilling, rushed and demanding
scenarios whether self-imposed or
outside sourced. Solutions should
spring instead of imposing decisions
 which might make some parties
unhappy.
Be an Archivist
Organizational history may have
much to learn from. Review how
previous situations are handled to
reduce making mistake. History is a
good warehouse of already invented
wheels w/c can save you time & pain
in making a new one.
The Option of Doing Nothing
Gather the facts from all available
standpoints. Issues offer 3
alternatives 1st is personal view, 2nd
main alternative option & 3rd normally
under estimated doing nothing. In
large number of circumstance doing
nothing is the truly wise way.
Be Conscious of Long-term Effects
Do some base-case modeling and
think of what if scenarios. History
can again be a good source of models
for any given situations.
Consider Legalities and Ethics
Basic to check law first once you clear
legal bar check its ethical issue. Not
all legal are ethical.
Ask Around
Consult with people or party most
affected by situation, when you do
examination and assessment analysis
make sure instrument is balanced
and objective.
Be Comprehensively Sensitive
Be concern about the effect as deeply
as possible.
Do Not be A Dangerous Alpha
Male
Decision makers should defy the
illusion and arrogance that power &
authority tends to be associated with
it. Good number unethical decision
are product of arrogance & delusion.
Find Win-Win Solution
Decision maker should detach himself
from the diff. partialities of the issue
for him to arrive at objective decision.
Myths about Organization Ethics
Being Ethical is Easy
1st Ethical means business conduct
most of the time in legal requirement.
2nd there is no such thing as cost-free
compliance effort 3rd ethical means
bee flying towards huge web of
unethical entities.
It is hard to withstand the pressure
when almost everybody deviates and
their deviation is already part of
system. Being carried into this
bandwagon mentality entice the
decision makers to find justification
for some acts that is unethical
Being Ethical is not part of Doing
a Business
Being ethical is part & parcel of doing
business. When state grants authority
to operates it also mandate to comply
in ethical standard.
Being Ethical Brings No Benefit
Ethical companies standout it bring
success and stability. It is not true
being ethical has no reward. Only
investment w/out loss is being
ethical.
WHAT IS ETHICS IS NOT
Ethics is not the same as feelings
Feelings provide important info for
our ethical choices.
Ethics is not a Religion
Many people are not religious but
Ethics applies for everyone
Ethics is not Just Following the
Laws
Good system of law does not
incorporate many ethical standards
but law can deviate what is ethical.
Ethics is not Following the
Culturally Accepted Norm
Some cultures are ethical but some
are corrupt & blind. Ex.When in
Rome, do as the Romans do
Ethics is not Science
Science can provide data to help make
better ethical choices. It provide
explanation for what humans are like
but Ethics provides reason for how
humans ought to act.
Corporate Citizenship
It refers to the acceptance by business
of a conscious effort in focusing and
satisfying the economic, legal,
philanthropic and social responsibility
& other acts expected from the corp.
to do its stakeholders.
It recognizes that a company or org is
not and should not act in separation of
community w/in it operates.
 Key elements of Corporate
citizenship:
Commitment to Quality
Ethics and Legal Compliance
Stewardship and Governance
Superior Employee Relation
Social Advocacy
Environmental Advocacy
Community Involvement
Philanthropy and Social Initiatives
Philanthropy is practice of giving
money and time to help make life
better for other people. It manifest of
love and mankind.
Corporate Philanthropy is key
component of corporations broader
social responsibilities. It serves as a
major link between the corporation
and communities it serves.
Benefits to Business
Enhances corporate reputation.
Improves relation w/ the govt, the
community & stakeholders.
Supports company strategic
business goals.
Benefits to Stakeholders
Build employee morale
Enlarge sense of community &
social obligation
Develops future workforce
Benefits to Community
Improves quality of life of
community members
Provides human and capital
resources to non-profit
organization.
Social Screening of Investment
SCARE-OFF FROM STRATEGY
The most rigid way of screening of
investment. It can be characterized
by hard policies such as no
investment to companies w/
questionable environmental records,
engage in child labor, discrimination,
use animals in product testing and
many other anti-earth or anti- green
policies.
IMPACT MITIGATION
Some socially concerned investors
deal w/ the problems inherent in
absolute screening by using the
strategy of balance w/ benefit.
It is founded upon the idea that for
everything the company does there is
always impact to stakeholders.
WHOEVER IS THE BEST
This strategy involves a kind of free
market model where companies w/in
the same industries compete w/ one
another for the best records on a
variety of social issues.
*Human Nature 1st Filipino company to
receive prestigious cruelty- free
recognition from PETA (People for the
Ethical Treatment of Animals).
MAIN OR DERIVATIVE
CONNECTIONS
This strategy requires investors to
decide whether or not they are
concerned if an investment has a
secondary involvement w/ social
problem.
It involves asking how far back in the
industrial process one wants a
particular social screen to go.
Corporate Greenwashing
It refers to the practice of companies
characterized by deceptively making
it appear that their product, services
and policies are environmentally
friendly.
Green marketing tactics refers to the
deceiving use of green PR to win the
hearts of consumer for purpose of
improving image, building goodwill
and drawing more revenue.
Greenwashing Sins:
1. Sin of Hidden Trade-off
Energy efficient electronics that
contain hazardous material.
Candies, drinks and other sweets w/
no sugar label.
Electric Cars appreciated for zero
omission but forget these need
recharging.
2. Sin of No Proof
Shampoo claimed certified organic w/
no verifiable certification
Shampoos w/ aloe vera extract added
claim w/ little or no actual extract
added.
Paints, sprays and aerosols claiming
to be freshner
3. Sin of Vagueness
Product claiming 100% natural when
many naturally occurring substance
are hazardous like arsenic and
formaldehyde.
 Capitalized term biodegradable in
paper bags, cups and other
packaging to improve image
4. Sin of Irrelevance
Product claiming CFC-free even
though CFC were banned 20 yrs ago.
5. Sin of Fibbing
Product falsely claiming to be
certified by an internationally
recognized environmental standard
like EcoLogo.
6. Sin of Lesser of Two Evils
Organic cigarettes or environmental
friendly pesticides.
7. Sin of Worshipping False Labels
This is penetrated by a product
wherein by either words or image,
gives the impression of third party
endorsement while in fact and in
reality no such endorsement happen.