MPU3322

PROFESSIONAL ETHICS

WEEK 8:
C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y
(CSR)

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 OVERVIEW
WHAT IS CSR & ITS AREAS OF FOCUS
CSR PRINCIPLES
FOUR MAJOR MODELS OF CSR
CSR BENEFITS & CHALLENGES FOR BUSINESS

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 LESSON OUTCOMES

At the end of the lesson, you should be able to:

Explain what CSR is
Identify areas of CSR activities
Plan CSR approaches/activities
Assess CSR benefits & challenges for business

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 WHAT IS CSR
CSR is about a companys positive contribution to the social
and physical worlds through the way they conduct business
The goal of CSR is to help create a happy, healthy society
and foster sustainable use of resourcesall of which vital
for the growth and enrichment of future generations.
Adopting the CSR mentality is thus the ethics of a company.
It guides the stakeholders and shareholders of the
company in doing good for the social and physical worlds.

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 RESPONSIBILITY TOWARDS THE SOCIAL & PHYSICAL
WORLDS
Conduct business guided by best practices and ethical
standards
Do no harm (e.g., avoid exploitative practices)
Contribute towards development of social health,
education and civility
Avoid treating young children as consumers
Start at the local level

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 RESPONSIBILITY TOWARDS NATURE &
TECHNOLOGY
Prevent environmental pollution
Recycle, renew resources
Think and Go Green
Responsible, balanced approach to the use of technology

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RESPONSIBILITY TOWARDS THE GOVERNMENT
Follow rules and regulations
Pay taxes regularly
Avoid taking advantage of loopholes in business laws
Cooperate with the government for economic growth &
development
Lead or follow Governmental efforts in promoting
positive social values

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 RESPONSIBILITY TOWARDS SHAREHOLDERS
Ensure a reasonable rate of return to investment over
time
Build and maintain good reputation and goodwill for
the company
Be transparent and accountable

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 RESPONSIBILITY TOWARDS EMPLOYEES
Provide a healthy work environment
Set reasonable working standards
Pay fair wages
Provide reasonable benefits
Give proper recognition of efficiency and hard work
Conduct training to upgrade skills
Provide efficient mechanism to address workers grievances

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 RESPONSIBILITY TOWARDS CONSUMERS
Supply socially and environmentally harmless
products
Supply products/services with quality as promised
Avoid price gouging
Take consumer complaints and address them
seriously
Avoid false advertising & promotion

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 CSR PRINCIPLES
Respect human rights
Respect differences by embracing diversity & non-
discrimination
Be fair as best as possible
Have time for dialogue
Accept and act on feedback from the community
Make some reasonable social contribution

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 MODELS OF CSR

There are now 6 to7models for practicing CSR.

Models are frameworks that give focus and set
parameters for CSR activities
The four below are the more established models:

Friedman Model
Ackerman Model
Carroll Model
Redmans Environmental Integrity & Community Model

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 FRIEDMAN MODEL (MID 1960S)
Named after the U.S. economist famed for being the champion of
modern capitalism :Milton Friedman
His CSR says that the only business of businesses is make money for
the owners of the business within the law.
To him, that is not just a financial duty. It is also a social or moral
duty. How?
Business owners/shareholders have the right to make money
because of the money they put into the business. Whatever owners or
shareholders do with the profits is up to them. They could engage to
do good socially or environmentally. It is their own private affairs.
When businesses have profits, they can pay their employees,
thus helping their families, local community, and larger society.

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 ACKERMAN MODEL (MID 1970S)
Developed by Robert Ackerman, the model focuses on the
internal policy goals and personnel of a company and how
they can generate CSR activities
For many reasons, middle to high level managers could be
interested in social or environmental issues and are willing
to do something about them.
Such managers are willing to use some time to work on the
issues. They might be able to convince business owners or
shareholders to help out with financial and material
resources in order for the owners/shareholders to enjoy
some benefits from helping the managers.

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 ACKERMAN MODEL
The Ackerman model depends heavily on the individual
(at the managerial level) to initiate the CSR activity. It
depends heavily on an individuals ethical values as well
as social/environmental concerns.
It also depends on the time such managerial personnel
have for tackling the social or environmental issues.
Question: is it a good idea to depend heavily on just the
individual for CSR to be adopted and work?

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 CARROLL MODEL (1990S)
It was developed by Archie Carroll and is highly
regarded by many.
It is also comprehensive, covering what CSR activities
should broadly target
As the pyramid on the next slide suggests,
philanthropic activities seem to be the highest form
of CSR activities

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CARROLLS PYRAMID

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 REDMAN ENVIRONMENTAL INTEGRITY &
COMMUNITY HEALTH MODEL
Developed by Elizabeth Redman in the late 1990s
A rather popular CSR approach
It is about corporations targeting environmental and health
issues
The environmental and health issues are, of course, major social
concerns and are often connected: a healthy environment is vital
for sustaining good health and overall well being.

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 GREENWASHING
Redmans model is so popular that some corporations have
a less than honest intention in using the model.
Corporations addressing environmental issues usually just
donate money to them to gain public support to do more
business with them. In truth, they do not really care about
the environment. Their tax-deductible donation is to buy
good public relations (PR) for the corporations
This is called greenwashing. It is based on the idea of
whitewashing, which is to cover up a persons negative
behavior by performing an inadequate investigation intended
to clear the person of any wrong doing.

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 WHAT ARE CSR BENEFITS & CHALLENGES FOR
BUSINESSES?
Reflect on the above question and we will have some
discussion of it later in class.
Before that, feel free to email me your response via CN if
you like

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