MBA 570
Summer 2011
At the end of this session, you should be able
to identify and describe:
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A definition for CSR
Reasons for having a CSR program
Objections to CSR
What makes a CSR program
How a CSR program is communicated
Principles of reporting for CSR
Some alternative viewpoints on CSR
What is
:
Corporate Social
Responsibility?
I think many people assume, wrongly that a company exists
simply to make money. While this is an important result of a company’s
existence, we have to go deeper and find the real reasons for our being.
As we investigate this, we inevitably come to the conclusion that a group
of people get together and exist as an institution that we call a company so
that they are able to accomplish something collectively that they could not
accomplish separately – they make a contribution to society, a phrase
which sounds trite but is fundamental.
Dave Packard
Co-founder of Hewlett Packard Company in 1939
Scrooge said to the ghost of his partner Marley –
But you were always a good man of business, Jacob –
to which the ghost replied – Business! Mankind
was my business. The common welfare was my business;
charity, mercy, forbearance, and benevolence were all
my business. The dealings of my trade were but a drop of water
in the comprehensive ocean of my business!
A Christmas Carol, Charles Dickens (1843)
Also known as:
Corporate Citizenship
Corporate Responsibility
Responsible Business
Sustainable Responsible
Business (SRB)
Definition
:
“Specifically, we see CSR as the voluntary
actions that business can take, over and
above compliance with minimum legal
requirements, to address both its own
competitive interests and the interests of
wider society.”
Source:
www.csr.gov.uk
The notion of companies looking beyond profits to their
role in society is generally termed corporate social
responsibility (CSR)….It refers to a company linking itself
with ethical values, transparency, employee relations,
compliance with legal requirements and overall respect for
the communities in which they operate. It goes beyond the
occasional community service action, however, as CSR is a
corporate philosophy that drives strategic decisionmaking, partner selection, hiring practices and, ultimately,
brand development.
South China Morning Post, 2002
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Consumers & investors: growing expectation for
organizations to behave responsibly
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Consumer awareness: ‘Green’ and ‘Ethical’
consumerism
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Legislation: H&S, EPA, Sustainability, Codes of
Practice
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Globalisation: Adoption of ‘Best Practice’,
Consumer & Legal Acceptance.
 Result = empowered stakeholders
Human Resources
 Recruitment, retention and morale of Staff
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Risk Management
 Investment in ‘ethical brand equity’
 ‘Greenwash’ effect?
Brand Differentiation
 As USP
 Build brand loyalty
 Reputation and brand attractiveness
Business Development
 New markets, products and services
Resources Management
 Better management and conservation of
strategic assets
Stakeholder Management
 Better internal and external relationships
 Freedom of operation: reduce government,
public, NGO intervention in organization
Corporate Social
Responsibility:
adds value
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May take management focus away from core
business activity
Restricts the free market goal of profit
maximization
Business is not equipped to handle social activities
May appear cosmetic – without genuine social
benefit
May make organization more vulnerable to
revelation of bad / unethical business practice
A restriction to free trade? (does it limit the ability
to compete in a global marketplace?)
Economist, Milton Friedman says:
“The social responsibility of business is to
increase its profits.”
“What does it mean to say that "business"
has responsibilities? Only people can have
responsibilities.”
“…in a free society there is one and only one social
responsibility of 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."
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Specialist ‘adopted’
projects
Corporate charitable
donations
Voluntary schemes for
staff
Staff fundraising
activities
Changes to
organizational
operations
Responsibility
Societal
Expectation
Economic
Required
Legal
Required
Ethical
Expected
Discretionary
(Philanthropic)
Desired/
Expected
Examples
Be profitable.
Maximize sales,
minimize costs, etc.
Obey laws and
regulations.
Do what is right, fair
and just.
Be a good corporate
citizen.
Communicating Corporate
Social Responsibility
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organizations should develop a general
values statement which reflects their stance
towards CSR
This may form part of a more comprehensive
Mission Statement
Should define ethical framework that guides
the accomplishment of the overall mission of
an organization within a society
JP Morgan Chase
Coca Cola
Home
Depot
Johnson and
Johnson
Credit Suisse
United
Technologies
Bristol-Myers
Squibb
CSR projects may be administered and
communicate achievements via:
 A dedicated CSR section or department
 The HR department
 Business development section
 Public Relations department
 Directly via CEO and / or Board of Directors
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Concept developed by John Elkington in 1994
Expects organizations to be responsible to
‘stakeholders’ interests rather than
‘shareholders’ profit
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Related concepts:
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◦ Full-cost accounting
◦ Social entrepreneurialism
◦ Social and natural capital
This means expanding the traditional reporting
framework to take into account performance
in terms of:
 Social
(People)
 Environmental (Planet),
as well as
 Financial (Profit)
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CSR can really be discussed as separate areas for a business…
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Corporate governance and access to capital
Human capital management: Getting better people and keeping them
Doing business honestly – effective measures against corruption
Improving community relationships and building a bank account of trust
Communicating well with consumers, and treating them right
Better environmental and social risk management
Cost savings via environmental efficiencies
Better relations with governments, at home and abroad
A great way to find new opportunities for products and services
VIDEO Stakeholder theory: http://www.bentley.edu/consciouscapitalism/index.cfm (19-24mins)
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“Opportunity” Examples include: BP, Unilever, Marks and Spencer, Nike, Waitrose,
Timberland, Cadbury, Sky, and many others
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In India, it often means working with NGOs, taking a philanthropic approach
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In Colombia, it can mean helping with post conflict reconstruction and societal
rebuilding
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In South Africa, it can mean building up a supply base, that is both
economically sustainable and worker-friendly – and helping tackle HIV / Aids.
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In France, it can mean picking up where the government has failed on some
social issues, negotiated agreements on working hours and conditions, and
environmental issues
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In Ukraine, it can mean sponsoring church rebuilding, book publishing and
encouraging basic skills improvements in the workforce, alongside health and
safety
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Finally, in Cambodia, it can mean a partnership with the ILO, NGOs and IGOs
to create a ‘cluster’ of factories where labour standards and union rights are
respected.
CSR 2.0
Value
Creation
Good
Governance
Societal
Contribution
Environmental
Integrity
Copyright CSR International / Wayne Visser 2010
CSR can only be resilient
if it is part of the DNA
of an organization, i.e.
CSR will only survive the
vagaries of fickle
markets, fluctuating
profits, financial crises
and leadership whims if
it is totally embedded in
the corporate culture,
strategy and
governance systems”
– Wayne Visser, 2008
‘Sustainability Guidelines’
developed by the Global
Reporting Initiative
(www.globalreporting.org)
SA800 certification
developed by the
international human rights
organization Social
Accountability
International.
(www.sa-intl.org)
The Green Globe program for
‘benchmarking, certification and
performance improvement’,
based on Agenda 21 proposals
from the 1992 Rio Earth Summit
(www.greenglobe.org)
ISO 14000 international
environmental management
standards
(www.14000.org)
The United Nations Global
Compact (UNGC) framework and
mechanism designed to
encourage businesses to adopt
CSR policies
(www.unglobalcompact.org)
The FTSE 4 Good Index –
measures the performance
of companies who meet
globally recognised CSR
standards.
(www.ftse.com/Indices/FTSE
4Good_Index_Series)
www.corpwatch.org
www.naomiklein.org
In this session we have looked at:
 What is CSR
 Why CSR is likely to be come more widely
adopted
 The business case for CSR
 The Value Statement (Customer, Employee,
Stakeholder and Social focus)
 Reporting and Accountability options for
CSR including the ‘Triple Bottom Line’
concept
 CSR and social criticism of international
organizations