Metropolia, Business Ethics IP week
7 Introduction to CSR; The business response to unsustainability

n n n n n
Market share increases
Create innovative power
Staff motivation
Cost advantages
Moral responsibilities n
It is: pro-active, stakeholder oriented, with focus on people, planet, profit and from big
(MNE) to small (SME)

n
And delivers specific dilemmas, challenges: n n n
What standards, guidelines to use?
Tension between global standards and local circumstances
Company policy vs. Politics local n
Organizing chain responsibilities and how far, down or up the line?
n
How much effort in fighting poverty and strengthen local economies?
n
Future developments???

Corporate Social Responsibility?
Global Citizenship?
Corporate Philanthropy?
Corporate Citizenship?
Community Relations?
Maatschappelijk Verantwoord Ondernemen?
Nachhaltigkeit?
Kestävä ?
Sustainable Management?
Durable?

n
To what extent is business really adding value to social and natural environment, or just “green window dressing”?
n
The corporation on perception management

n
A business is Corporate Social Responsible when it is not only aiming at making profit, but also at adding value to society and environment.
n
“A concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with stakeholders on a voluntary basis” n
Defined by European Commission, 2002

“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 ”

Corporate Social Responsibility (CSR)
Carroll’s Four Part Definition
Understanding the Four Components
Responsibility Societal
Expectation
Examples
Economic Required
Legal Required
Be profitable. Maximize sales, minimize costs, etc.
Obey laws and regulations.
Ethical
Discretionary
(Philanthropic)
Expected
Desired/
Expected
Do what is right, fair and just.
Be a good corporate citizen.
Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz
Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved

Corporate Social Responsibility
(CSR)
Economic Responsibilities ( Make a profit)
Legal Responsibilities ( Obey the law )
Ethical Responsibilities ( Be ethical)
Philanthropic Responsibilities ( Good corporate citizen )
CSR

Reactive; McDonalds
Defensive; Tobacco Industry
Accommodative; Most firms
Proactive; Toyota and Prius

Offensive strategy Defensive strategy
Core
Business
“we want to change the world”
Triodos bank,
Body shop
CSR primary process
Innovative
Community
Investment
“we want to do what we can”
Market
Opportunity
“we see a opportunity”
TNT
Put core business outside company
Essent energy, green funds
CSR on product, market level
PR and Internal driver
Market share,
Innovation,
Internal driver
Necessity
“we are criticized”
Shell,
McDonalds
Compliance to society
Necessity,
‘license to operate’
Unconscious
“we are a reputable business”
Majority of business
No CSR policy, but just some elements
Not aware of importance
Limited market
‘greenwashing’ ‘greenwashing’ Ad hoc,
‘greenwashing’
Criticism, (definition of reputable bus.
Changes)

Hostile anti-globalization movement
NGO influences on public opinion
Media enhances above
Demands of government and regulatory authorities
Consumers and business customers
Investor community

Belief and basic values
Driven by leadership and top management commitment

Requires a stakeholder orientation.
Customers
Employees
Investors
Stockholders
Suppliers
Government
Communities

Adopts a strategic focus.
Formal commitment from top management.
Communicated through mission and vision statements, annual reports, websites, and public relations.
Action and results.
Depends on collaboration and coordination across business and among constituencies.
Large companies often create specific positions and departments to support social responsibility programs.

Benefits: more competitive
Resilient to shocks
“
Attract and hold customers & employees
“ “ responsible investments
Part of risk management
Reputation strategy