Corporate Social Responsibility

BOH4M

Learning Goals

8. I will be able to explain what Corporate Social Responsibility (CSR) is and its key issues.

9. I will be able to describe what and who are stakeholders

10. I will be able to explain why companies are socially responsible and the consequences of CSR.

11. I will be able to explain the 2 principles of CSR (charity and stewardship)

What is CSR ? – Fill in questionshttps://www.youtube.com/watch?v=BLUu262pmxU

What is CSR? Before CSR, what was the main goal of a company? Why is it annoying that she is drinking coke? Which company do you think is more socially

responsible? Why? How do customer’s feel toward companies who are

involved in CSR? Do their opinions match their buying trends?

The Positives

Good things businesses do?– Meet our needs/wants– Generate wealth– Create jobs– Innovate

The Negatives

Bad things businesses do?– Pollution– Sweatshops/child labour– Fraud– Consumerism

Key Issues in CSR Labour rights:

– child labour – forced labour – right to organize – safety and health

Environmental conditions– water & air emissions– climate change

Human rights– cooperation with paramilitary forces– complicity in extra-judicial killings

(someone killed by the government without legal process)

Poverty Alleviation– job creation– public revenues– skills and technology

LG 9: Stakeholders

Who is affected by the actions of a business?

Stakeholders

Stakeholders are groups or individuals with an interest

in a business. Stakeholders may affect or be affected

by the decisions of an organisation. Examples of

stakeholders include: Owners/shareholders Employees Customers Local community

Internal stakeholders

Internal stakeholders

Internal stakeholders are those that are considered

to be part of an organisation.

The main internal stakeholders are: Shareholders/owners Employees

Shareholders

Shareholders: own a part of a business do not get involved in the day-to-day running of

the business have a right to vote at the company’s AGM receive a share of the profits – this is called a

dividend

Shareholder interests

Each stakeholder group will have its own expectations

of the business.

Shareholders are likely to have an interest in: Increased profits and hence dividends through

such things as:– Growth – Enhanced reputation– Greater efficiency

Employee interests

Employees are likely to expect: fair pay decent working conditions job security access to training for additional qualifications

Manager interests

In addition to the usual employee interests, managers may expect to be able to make their own decisions and have the opportunity of promotion

External Stakeholders

External stakeholders

External stakeholders are outside an organisation.

The main external stakeholders are: Customers Government Suppliers The local community

Customer expectations

Customers are likely to expect such things as: a product range that meets their needs value for money good quality products and customer service a ready supply of goods and services

And possibly: ecologically sound/sustainable products

Government interests

The government has an interest in businesses because: it receives taxes from business profits, employee

incomes and customer purchases businesses provide jobs and therefore employment

levels and benefits payments are affected the economy is dependent on the operations of business it has a range of legislation and regulations that

businesses must comply with

Supplier expectations

Suppliers may provide a range of services to

businesses, as well as raw materials and finished

goods.

Suppliers may expect: to be paid in a timely fashion to receive regular orders

Local community

The local community may have expectations about a

company regarding: the availability of jobs the level of pollution and congestion created the support provided by a business regarding

community projects and concerns

Business expectations of stakeholders

Different stakeholders have their own interests and expectations of a firm, however, the business will also have expectations of the stakeholders e.g. suppliers may be expected to comply with ethical and environmental guidelines set down by the business.

How could CSR policies meet stakeholder interest?

How could they go against stakeholder interest?

Kellogg's Case Study

LG 10: Social Responsibility

Related to “corporate citizenship” and business ethics

Corporate social responsibility (CSR) means taking your duty to all stakeholders, especially the community as a whole, seriously

Social Responsibility

Doing good things– Donating goods, services, or money to charities– Sponsoring public service ads

Not doing bad things– Being environmentally responsible– Safe working conditions and fair wages– Transparency and accountability

Why CSR?

Owner(s) feel strongly about it Good publicity = good for business Tax deductions The right thing to do Companies should solve the problems they cause

– Ex: pollution

Keeps the government out of business Increased market share

The case against CSR

Improving the community should be the responsibility of the public sector

Diminishes profit to owners/shareholders Makes business less competitive Increases costs A company’s social obligations are discharged when

it pays taxes Businesses may exert too much influence over

charitable causes– Responses to these arguments?

Principles

Two key principles are at the heart of CSR:

– The Charity Principle– The Stewardship Principle

The Charity Principle

The wealthy have a responsibility to the poor Corporations are large, powerful, and

wealthy “citizens”, and should therefore take up social causes– Stems from early 1900s American tycoons

Andrew Carnegie and John D. Rockefeller who contributed large sums of money to charitable organizations

The Stewardship Principle

When business executives think of themselves as trustees of society

Company must ensure that society benefits from their actions, rather than being hurt by them

Recognize that company is not a closed system – if affects (and is affected by) its environment

Must balance the interests of multiple stakeholders

Fun Art Time - CSR Window Pane

You must choose one company that you think demonstrates CSR

You will receive a piece of paper. You need to split it into four sections.– Section 1 will have your companies name and logo– Section 2 will have a summarized version of your companies CSR

policy– Section 3 will have some of the policies that your companies uses to

ensure ethics in the workplace.– Any thoughts that you have about sections 2 and 3.

Make it beautiful (lots of colour) as it will be going on the wall!

Learning Goals

8. I will be able to explain what Corporate Social Responsibility (CSR) is and its key issues.

9. I will be able to describe what and who are stakeholders

10. I will be able to explain why companies are socially responsible and the consequences of CSR.

11. I will be able to explain the 2 principles of CSR (charity and stewardship)

Nike Video (20 min)

http://www.youtube.com/watch?v=M5uYCWVfuPQ&feature=c4-overview&list=UUnkiZ7W-zCpYOp41UVul5rA

Based on this video do you think Nike is being socially responsible? Why or why not?

Do you think it’s socially responsible to form an opinion based on one video? Why or why not?

Do you think it’s ethical to produce a video with such a heavy bias? Why or why not?

Honest Tea

http://www.youtube.com/watch?v=cDndc2iNz58

How is this company different from Nike? What are fair trade products? Why should

people purchase fair trade products? What is the problem with fair trade products? Why do you think companies like Nike do not

use the fair trade model?

Learning Goals

8. I will be able to explain what Corporate Social Responsibility (CSR) is and its key issues.

9. I will be able to describe what and who are stakeholders

10. I will be able to explain why companies are socially responsible and the consequences of CSR.

11. I will be able to explain the 2 principles of CSR (charity and stewardship)