Today
1. Presentation
2. Break
3. Discussion of Readings
4. Assignment 1 CSR Symbols
Session I
CSR Concepts
&
Frameworks
Cyrlene Claasen
cyrlene.claasen@esc-rennes.fr
Content
1.
CSR Definitions
2.
Related Concepts
3.
Drivers of CSR
4.
Carroll’s Theoretical Framework
5. General Framework
1 – CSR Definitions
Academic (1)
 Friedman (1962)
 There is one and only one social responsibility for business – to
use its resources and engage in activities designed to increase
its profits so long as it stays within the rules of the game, which
is to say, engages in open and free competition without
deception or fraud
 Only individuals can have social responsibilities
 Social progress (e.g. health, longevity, etc.) is a consequence of
free enterprise and free trade
1 – CSR Definitions
Academic (2)
 Carroll (1979)
 The social responsibility of business encompasses the
1) economic,
2) legal,
3) ethical and
4) discretionary
expectations that society has of organizations at a
given point in time
1 – CSR Definitions
Academic (3)
 Porter & Kramer (2006)
Strategy & Society: The Link Between Competitive Advantage
and Corporate Social Responsibility, Harvard Business Review
The shared value model: idea that corporate success and social
welfare are interdependent
– Businesses needs an educated workforce, sustainable resources and a
robust government to compete effectively, whereas
– Society needs profitable and competitive businesses to create jobs,
income, tax revenues, and wealth for all
The “Creating Shared Value” approach (CSV) focuses on
building a social value proposition into corporate strategy
 Examples of companies linking strategy and CSR in the article
1 – CSR Definitions
Academic (4)
 Epstein (2008)
 CSR relates primarily to achieving outcomes from
organizational decisions concerning specific issues or
problems, which by some normative standard have
beneficial rather than adverse effects upon pertinent
corporate stakeholders
The normative correctness of the products of corporate
action have been the main focus of CSR …
1 – CSR Definitions
International Institutions (1)
 European Commission (MEMO/09/109 issued on 16/03/2009)
 CSR is “a concept whereby companies integrate social and
environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis”
This approach is consistent with the EU's so-called Lisbon Strategy
 “CSR is always about going beyond the law”
 “Ideally, CSR is a win-win scenario, whereby companies increase
their profitability and society benefits at the same time”
1 – CSR Definitions
International Institutions (2)
 World Bank (WB)
 [CSR is] the commitment of business to contribute to
sustainable economic development, working with
– employees,
– their families,
– the local community and
– society at large
to improve quality of life in ways that are both
good for business and good for development
1 – CSR Definitions
Networks (1)
 International Institute for Sustainable Development
(IISD)
 CSR should be seen as the way that firms – working
with those most affected by their decisions (often
called “stakeholders”) – can develop innovative and
economically viable products, processes and
services within core business processes, resulting
in improved environmental protection and social
conditions ...
1 – CSR Definitions
Networks (2)
ASEAN’s CSR Network
(Association of South-East Asian Nations)
 CSR requires a legal framework that promotes
openness, partnerships and democratization
 Aim: to help bring about shared prosperity and a
sustainable future to the ASEAN region (Brunei,
Burma / Myanmar, Cambodia, Laos and Vietnam); to
promote community building by promoting close
collaboration among the business sector, civil
society, academia and other stakeholders in the
region
1 – CSR Definitions
Networks (3)
 UNIDO’s Regional CSR Network
(United Nations Industrial Development
Organization)
 Ensures that CSR supports, and does not
undermine, the development of small and medium
sized enterprises (SMEs)
in developing countries as it is crucial for meeting
the goal of improving the impact of business on
society
1 – CSR Definitions
Example of a Company Website
 Bloomberg Businessweek:
 Corporate social responsibility is a way of
managing a business by considering the impact
of activities on
– customers,
– suppliers,
– employees,
– shareholders,
– communities and other stakeholders, and
– the environment
1 – CSR Definitions
Questions
 Can you identify some major differences between all
these definitions?
 Are there common points shared by all of them?
 What are the possible problems related to having
such a vast array of CSR definitions?
 Taking into consideration the geographic region
where you come from, which would be the most
relevant one?
2 – Related Concepts
Responsibility / Responsiveness
 Corporate social responsibility – emphasizes obligation and
accountability to society
 Corporate social responsiveness – emphasizes action, activity
 Corporate social responsiveness is a business's capacity to
respond to social pressures
 This suggests the ability of a business organization to survive
through adaptation to its business environment
 The term is an inclusive and global concept which embraces the
complete spectrum of socially beneficial activities of business
2 – Related Concepts
Corporate Social Performance:
Principles, Processes and Outcomes
 Wood, 1991:
Corporate social performance is “a business organization’s
configuration of principles of social responsibility, processes
of social responsiveness, and policies, programs and other
observable outcomes as they relate to the firm’s societal
relationships”
 This definition was further developed so that each of the three
components – principles, processes and outcomes – are each
composed of specific elements
2 – Related Concepts
The problem of the CSP – FP link
(Corporate Social Performance – Financial Performance)
 Does it pay to be ethical? We don’t know
Whereas some studies report a positive relationship between ethics and
profits, some find a negative relationship and some find the relationship either
neutral or mixed
 It is hard to draw broad conclusions about the relationship between CSR and
profits because the studies often measure different things; Margolis and
Walsh (2001) have shown in their summary of 95 studies that CSP is
measured in many different ways
 There might be a correlation between CSP and FP, but the existence of a
causal link has not been proved
 McWilliams & Siegel (2001) find that there is a neutral relationship between
CSR and FP
3 – Drivers of CSR
Legitimacy (1)
 The legitimacy of business is linked to its obligations to
society and to the sanctions that society can apply to
business when it fails to live up to these obligations
 The most often cited definition is that of Suchman (1995):
 “Legitimacy is a generalized perception or
assumption that the actions of an entity are desirable,
proper, or appropriate within some socially constructed
system of norms, values, beliefs, and definitions”
3 – Drivers of CSR
Legitimacy (2)
 According to the “Iron Law of Responsibility” (Davis):
 Economic power entails social responsibility
 Society grants legitimacy and power to business;
in the long run, those who do not use power in a manner
which society considers responsible will lose it
 However, some challenge this view because defining
the terms of legitimacy as a contested process and the
norms of legitimacy are an outcome of power relations
3 – Drivers of CSR
License to Operate
 It is usually seen as the approval that companies must obtain from
local communities or other stakeholders in areas where they operate
(as compared to the legal license they must
obtain from governments)
 CSR policies, projects or initiatives do help to obtain the social
licence to operate
 It is crucial notably for extractive industries, which often directly
impact local communities by exploiting their land, subsoil, and other
resources
 A “social licence to operate” is earned by acquiring free, prior
and informed consent from indigenous peoples and local communities
3 – Drivers of CSR
Image / Reputation (1)
 The implementation of a CSR approach usually enhances the brand
image and reputation of a business
 Consequently, over time, it leads to an improvement in sales and
customer loyalty
 And it also leads to an increased ability to attract and retain (the
best) employees
 By capitalizing on it, a company can improve its financial
performance and attract more investments
3 – Drivers of CSR
Image / Reputation (2)
 However, companies are often accused of instrumentalizing CSR to
improve their image or reputation
 There are serious dangers associated with paying lip service to
stakeholders and considering CSR as a mere PR exercise
(“greenwashing”, “window dressing”…)
 This may cause a loss in credibility and destroy very quickly the
company’s image
 Whereas building a good reputation takes a long time, tarnishing it
is a matter of days or hours…
3 – Drivers of CSR
Image / Reputation (3)
 “Greenwashing” happens when disinformation is disseminated by
an organization so as to present a (false) environmentally
responsible image of itself
 Making exaggerated environmental claims in order to obtain consumer
favor is one of the worst things a company can do in the eyes of the
sustainability community
 When a company that has been lauded for its environmental
performance is revealed to be engaging in environmentally dangerous
practices, it provides skeptics with the fodder they need.  Can you
think of an example?
 Even when the claims are found to be inflated (or impossible to
substantiate), credibility is lost
3 – Drivers of CSR
Workplace Issues
 Research demonstrates that CSR initiatives have a positive
impact on employee morale, motivation, commitment, loyalty,
training, recruitment and turnover
 Benefits in these areas have been found to improve the
bottom line of companies
 Three surveys across Europe, the USA and a survey
involving 25 countries found employees felt greater loyalty,
satisfaction and motivation when their companies were
socially responsible
3 – Drivers of CSR
Risk reduction
 Companies with non-sustainable supply chains may
experience financial, integrity and reputation issues
(e.g. Mattel in 2007 when a supplier used lead-contaminated
paint on toys)
 Green procurement strategies
Purchasing of green energy, raw materials with a higher
recycled content, etc.
 “Greening the supply chain”
refers to buyer companies requiring a certain level of
environmental responsibility in the core business practices of
their suppliers and vendors
3 – Drivers of CSR
Reduced internal costs
And revenue growth
 Energy efficiency, green projects and other eco-friendly
initiatives
 Implementation of sustainable practices in design, production,
distribution and end-of-life management
 Enhanced brand reputation
 Employee motivation
 Customer satisfaction
 All these policies, processes and outcomes guarantee
savings and increase cost avoidance
4 – Carroll’s CSR Pyramid
5 – General Framework