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When I do good, I feel good; when I do bad, I feel bad.

Thats my religion Abraham Lincoln Always do rightthis will gratify some and astonish the rest - Mark Twain

A fundamental ingredient of any successful market economy is respect for basic human values: honesty, trust, and fairness. These values must become an integral part of business culture and practice for markets to remain free and to work effectively. Private business is at the strategic center of any civil society. Its where people go for a job or to invest savings to realize their aspirations for their families.
Donald L. Evans U.S. Secretary of Commerce

Starting point
Why do businesses exist? 2. What is the purpose of a business, or, in the bigger picture, any economic system?
1.

The derivation of the word company? Two Latin words, cum and panis, which mean: breaking bread together. How does this origin translate in todays business environment? What are or should be the goals of the modern corporation? Opinions differ and cover a wide spectrum:

Corporate social responsibility (CSR) is:

An obligation, beyond that required by the law and economics, for a firm to pursue long term goals that are good for society The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large About how a company manages its business process to produce an overall positive impact on society

Corporate social responsibility means:


Conducting business in an ethical way and in the interests of the wider community Responding positively to emerging societal priorities and expectations A willingness to act ahead of regulatory confrontation Balancing shareholder interests against the interests of the wider community

Is CSR the same as business ethics?


There is clearly an overlap between CSR and business ethics Both concepts concern values, objectives and decision based on something than the pursuit of profits And socially responsible firms must act ethically

The difference is that ethics concern individual actions which can be assessed as right or wrong by reference to moral principles. CSR is about the organizations obligations to all stakeholders and not just shareholders.

Four dimensions of corporate responsibility


Economic - responsibility to earn profit for owners Legal - responsibility to comply with the law (societys codification of right and wrong) Ethical - not acting just for profit but doing what is right, just and fair Voluntary and philanthropic promoting human welfare and goodwill

CSR vocabulary CSR is also referred to as:

corporate or business responsibility corporate or business citizenship community relations social responsibility.

Why is CSR important?


consumers want to buy products from companies they trust; suppliers want to form business partnerships with companies they can rely on; employees want to work for companies they respect; and NGOs, increasingly, want to work together with companies seeking feasible solutions and innovations in areas of common concern.

Why is CSR relevant today?


CSR as a strategy is becoming increasingly important for businesses today because of three identifiable trends: Changing social expectations Consumers and society in general expect more from the companies whose products they buy. This sense has increased in the light of recent corporate scandals, which reduced public trust of corporations, and reduced public confidence in the ability of regulatory bodies and organizations to control corporate excess. Increasing affluence This is true within developed nations, but also in comparison to developing nations. Affluent consumers can afford to pick and choose the products they buy. A society in need of work and inward investment is less likely to enforce strict regulations and penalize organizations that might take their business and money elsewhere. Globalization The growing influence of the media sees any mistakes by companies brought immediately to the attention of the public. In addition, the Internet fuels communication among like-minded groups and consumersempowering them to spread their message, while giving them the means to co-ordinate collective action (i.e. a product boycott).

Spectrum of Approaches to Corporate Social Responsibility

Obstructionist Stance

Defensive Stance

Accommodative Stance

Proactive Stance

LOWEST LEVEL OF SOCIAL RESPONSIBILITY

HIGHEST LEVEL OF SOCIAL RESPONSIBILITY

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Approaches to Social Responsibility


Obstructionist Stance
Approach to social responsibility that involves doing as little as possible and may involve attempts to deny or cover up violations

Defensive Stance
Approach to social responsibility by which a company meets only minimum legal requirements in its commitments to groups and individuals in its social environment

Accommodative Stance
Approach to social responsibility by which a company, if specifically asked to do so, exceeds legal minimums in its commitments to groups and individuals in its social environment

Proactive Stance
Approach to social responsibility by which a company actively seeks opportunities to contribute to the well-being of groups

Major Stakeholders
Employees Investors

CORPORATION
Customers Local Communities Suppliers

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Areas of Social Responsibility


Environment
Customers Employees Investors

Responsibility Toward the Environment


Were conducting a global experiment. And were all in the test tube.
~ Researcher on greenhouse emissions

Controlling Pollution
Discuss: Air Pollution Water Pollution Land Pollution
Toxic Waste Disposal Recycling

Responsibility Toward Customers


Consumer Rights Consumerism
Form of social activism dedicated to protecting the rights of consumers in their dealings with businesses

Responsibility Toward Customers


Consumer Rights
1. Consumers have a right to safe products.

2. Consumers have a right to be informed

about all relevant aspects of a product.


3. Consumers have a right to be heard. 4. Consumers have a right to choose what

they buy.

Responsibility Toward Customers


Unfair Pricing Collusion
Illegal agreement between two or more companies to commit a wrongful act (i.e., price fixing)

Responsibility Toward Customers


Ethics in Advertising
Discuss:
Food product labeling Morally objectionable

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Responsibility Toward Employees


Legal & Social Commitments
Discuss: Illegal Discrimination
Whistleblower
Employee who detects and tries to put an end to a companys unethical, illegal, or socially irresponsible actions by publicizing them

Responsibility Toward Investors Improper Financial


Management

Unethical offenses not necessarily illegal Illegal Activities Check Kiting


Illegal practice of writing checks against money that has not yet been credited at the bank on which the checks are drawn

Insider Trading
When someone uses confidential information to gain from the purchase or sale of stocks

Managing Social Responsibility Programs


Social responsibility must start at the top. A committee of top managers must develop a plan detailing the level of management support. One executive must be put in charge of the firms agenda. The organization must conduct occasional social audits

Social Audits systematic analyses of its success in using funds earmarked for its social responsibility goals