Canadian Business and Society: Ethics & Responsibilities Chapter Sixteen Ethics, Responsibilities, and Strategy Copyright © 2008 McGraw-Hill Ryerson Ltd. 1 Chapter Outline Introduction to CSR Strategy Approaches to Viewing Social/Ethical and Environmental Responsibilities Stakeholders and Strategic Issues CSR Strategy and Purpose; Assessment of the Environment; Resources and Capabilities Establishment of Objectives CSR Strategy Options and Selection, Implementation, and Evaluation Future Ethics in Canadian Business and Society Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 2 Introduction to CSR Strategy Strategic management: process by which a corporation ◦ establishes its mission and objectives, ◦ analyzes the environment and resource capabilities in order to formulate strategy, ◦ creates the organizational systems and processes needed to implement the strategy, ◦ and devises mechanisms for evaluating performance. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 3 Introduction to CSR Strategy CSR strategy: the portion of a corporation’s comprehensive corporate strategy addressing major social, ethical, environmental, and governance issues. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 4 Stage 1: Identify Stakeholders and Strategic Issues Strategic issue: a point in question or a matter that is in dispute that will have a major impact on the corporation’s performance, positive or negative. Consider all stakeholder issues involving owners, directors, employees, customers, lenders, suppliers, competitors, society, etc. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 5 Stage 2: Create CSR Strategy and Purpose Mission: An enduring statement that specifies in very broad, even philosophical terms, the organization’s “reason for being” and what distinguishes it from similar organizations. Vision: A statement of what the corporations wants to become or where it wants to be at some date in the future. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 6 Stage 3: Develop CSR Strategy and Assess the Environment Corporation must develop capability to assess external environment Environmental factors: structure of industry, social trends, technological developments, government policies, competitor’s behaviour, demographic changes Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 7 Stage 4: Assess Resources and Capabilities Management must evaluate corporation’s internal resources and capabilities to better understand opportunities and threats. Assessment allows for better response to social and environmental issues. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 8 Stage 5: Establish Objectives Objectives are the ends the corporation seeks to achieve through its existence and operations. Most corporations have socially oriented objectives in addition to financial objectives. Setting of objectives is critical to strategic management but can only occur after assessing the environment and corporate resources. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 9 Stage 6: CSR Strategy Options and Selection Identify strategic options available to the corporation Examples include cost leadership, differentiation, diversification, and strategic alliances Similarly, for CSR strategy there are many different approaches to achieving objectives Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 10 Stage 7: CSR Strategy and Implementation Develop stakeholder relationships Ethical management and leadership Practice of corporate social responsibility Reporting and communicating social responsibility achievements Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 11 Stage 8: CSR Strategy Evaluation Continuous monitoring and reviewing of actions and initiatives must be undertaken to address social and environmental responsibilities Important: (1) maintain business legitimacy; (2) deter threat of government regulation; and (3) business success and existence depends on how well it responds to social and environmental issues Continuous monitoring by NGOs Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 12 CSR-Related Awards and Recognition Canada’s Most Respected Corporations (Globe and Mail newspaper) Canada’s Most Admired Corporate Cultures (Canadian Business magazine) Corporate Social Responsibility Ranking (Report on Business magazine) Canada’s 50 Best Corporations (Corporate Knights magazine) Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 13 Future Ethics in Canadian Business and Society Accountability for social, ethical, and environmental responsibilities has resulted in major changes to how business operates, and will continue to do so into the future. Three possibilities for future of corporate responsibility: (1) imposed by government regulation; (2) free markets will force changes; or (3) corporations will redefine themselves. Chapter 16 Copyright © 2008 McGraw-Hill Ryerson Ltd. 14