Strategic

Corporate
Social
Responsibility
Stakeholders in a Global Environment

William B. Werther, Jr.

University of Miami

David Chandler
University of Texas at Austin

USAGE
Los Angeles | London | New Delhi
Singapore | Washington DC
CONTENTS

List of Figures ix
Glossary of Terms xi
Corporate Social Responsibility Terms xi
Strategy Terms xiv
Foreword to the Second Edition xvii
Mallen Baker
Preface xxi
Why Corporate Social Responsibility Matters xxi
Corporate Social Responsibility xxii
Plan of the Book xxvii
The Strategic CSR Web Site: http://www.sagepub.com/StrategicCSR/
Notes and References xxix
Acknowledgments xxxi

PART I STRATEGIC CORPORATE SOCIAL RESPONSIBILITY 1

1. What Is CSR? 3
Corporate Social Responsibility 5
Corporate Strategy and CSR 8
The Evolution of CSR 9
The Culture and Context 13
A Moral Argument for CSR 14
A Rational Argument for CSR 16
An Economic Argument for CSR 18
Why Is CSR Important? 19
Why Is CSR Increasingly Relevant Today? 19
Growing Affluence 20
Ecological Sustainability 20
Globalization 20
 The Free Flow of Information 20
Brands 22
Beyond Trends 22
Questions for Discussion and Review 22
Notes and References 23

2. Corporate Strategy: A Stakeholder Perspective 27

What Is Strategy? 27
Competing Strategy Perspectives 29
The Resources Perspective 29
Limitations of the Resources Perspective 30
The Industry Perspective 31
Limitations of the Industry Perspective 33
A Stakeholder Perspective 34
Prioritizing Stakeholders 36
The Integration of Strategy and CSR 38
Combining the Resources and Industry Perspectives 38
Integrating CSR 39
Strategic CSR 40
A CSR Perspective 40
Core Operations 42
A Stakeholder Perspective 42
Medium to Long Term 43
A Stakeholder Perspective in Action 47
Questions for Discussion and Review 48
Notes and References 48

3. How Much Does CSR Matter? 53

CSR: A Corporate Responsibility? 55
Milton Friedman Versus Charles Handy 55
CSR: A Stakeholder Responsibility? 57
Do Stakeholders Care? , 58
Stakeholder Advocacy 61
Intention Versus Reality 63
The Walmart Conundrum 65
Is Walmart Good for Society? 66
Prices 68
Suppliers 69
Jobs 69
Competitors 70
Quality and Variety 71
Walmart Is No. 1 . . . Today 71
Walmart and Sustainability 72
So How Much Does CSR Matter? 77
CSR in Implementation 78
Questions for Discussion and Review 79
Notes and References 80
4. The Strategic Context of CSR 85
CSR Through a Strategic Lens 86
Firm Strategy and the CSR Filter 87
Competencies 89
Strategy . 89
Structure ""-"- 91
The CSR Filter ... 91
A Firm's Environmental Context 92
The Five Driving Forces of CSR 94
CSR and Growing Affluence 94
CSR and Ecological Sustainability 96
CSR and Globalization 98
CSR and the Free Flow of Information 101
CSR and Brands 104
The Market for Social Responsibility 107
The CSR Price Premium 108
GreenwashingAbuse of the Market for CSR 108
Strategic CSR 110
Implementing CSR 113
Questions for Discussion and Review 113
Notes and References 114
5. Implementation: The Integration of CSR Into Strategy and Culture 119
The CSR Threshold 119
Variation Among Companies 121
Variation Among Industries 123
Variation Among Cultures 124
CSRAn Integral Aspect of the Firm? 125
Implementation: Short to Medium Term 127
From the Top Down 127
CSR Officer 129
CSR Vision , 130
Measurement and Rewards 131
CSR Audit and Report 132
Code of Conduct 135
CSR Ombudsman 136
Organizational Structure 136
Implementation: Medium to Long Term 137
Stakeholder Involvement 137
Manage the Message 138
Corporate Governance 138
Corporate Activism 139
Implementation: Building CSR Into the Organizational Culture 141
From a Strategic Perspective: Planning 141
From a Firm Perspective: Action 142
Questions for Discussion and Review 143
Notes and References 144
PART II CSR: ISSUES AND CASE STUDIES 149
Part II Structure 152
Issues and Case Studies 152
Organizational Issues and Case Studies 155
Issues ""'"" -- Case Studies
Corporate Charters Federalization 157
Corporate Governance Split CEO/Chair 163
Employee Relations Timberland 169
Executive Compensation Stock Options 174
Shareholder Activism SRI Funds ' 183
Social Entrepreneurship The Body Shop 193
The Corporation Primark Versus Marks & Spencer 198
Wages McDonald's 206
Notes and References 209
Economic Issues and Case Studies 219
Issues Case Studies
Fair Trade Starbucks 224
Finance Citigroup 230
Financial Crisis Countrywide 240
Microfinance Grameen Bank 246
Patents AIDS 256
Product Safety Monsanto 266
Profit One Laptop Per Child (OLPC) 275
Supply Chain Nike 282
Notes and References 289
8. Societal Issues and Case Studies 303
Issues Case Studies
Accountability ISO 26000 305
Compliance Paper Versus Plastic 313
Environmental Sustainability e-waste 326
Ethics Ethics and Compliance Officers 336
Media CNN 344
NGOs Product (RED) 352
Religion Islamic Finance 365
Stakeholder Relations Ben & Jerry's 374
Notes and References 378

lex
Subject Index 389
Company Index 405
About the Authors 415