Corporate Responsibility and Society
MNGT 5990
Fall 2013 - Shanghai, PRC
Robert Serben, Ph.D.
Week 1 - Foundations
Introductions
• Please introduce yourself with the following
format:
1. Name
2. Your occupation
3. What you would like to gain from this course
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Course objectives
Students will be able to:
1. Identify conflicting interests and values between organizations
and their members, stakeholders, and publics.
2. Identify and evaluate the ethical and social claims and appeals
organizations and individuals employ to justify their values and
actions.
3. Apply major ethical theories including utilitarianism, ethics of
duty, and virtue ethics to concrete organizational and personal
situations.
4. Critically evaluate case studies and their own careers applying
appropriately the concepts of the corporation and of Corporate
Social Responsibility (CSR).
5. Recognize ethical issues confronting managers, including
organizational challenges to their integrity
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Teaching methods
•
•
•
•
Lecture
Discussion
Team activities
Case studies
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Your role
• You are in control of your learning - and your
grade
1.
2.
3.
4.
Attend class, be on time, read and prepare
Stay involved and active in class
Your opinion is an important contribution
What you invest is what will be returned to you
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My role
• Present course content
• Discussion starter
• Encouragement
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Professional courtesy
•
•
•
•
Place cell phones on vibrate
Receive telephone calls outside of class
No texting in class
Personal computer use limited to taking class
notes and team projects
• Only one conversation – the class
conversation
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Grading
Letter Grade
A
COURSE REQUIREMENTS:
a. Class Attendance
Points
Possible
300
Numerical Score
1200-1100 (4.00)
A-
1099-1000 (3.67)
B+
999-900 (3.33)
B
899-800 (3.00)
b. Team projects
300
B-
799-700 (2.67)
c. CSR Case Studies
300
C
699-600 (2.00)
d. The Final Examination
300
F
599-000 (0.00)
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Incomplete (0)
W
Withdrew
WF
Withdrew/Failed
8
Class discussions
• Learning =
Content
+
Interactions
+
Reflection
X
Motivation
• In class discussions: Your views are important
– “I’m not sure” – acceptable answer
– “It all depends…” acceptable answer
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This week
Introductions
Foundational Concepts
CSR value and Practices
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End of course team project
• CSR Consulting Company
– Headquarters: Shanghai
– Offices in: New York, Chicago, London, Berlin,
Johannesburg, Mumbai, Singapore, Jakarta
– Services: Help businesses set objectives and
evaluation strategies for corporate social
responsibility programs.
– Objective: Help clients understand the value of
CSR for their business
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PERCEPTIONS
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What do you think of…
Marketing
Finance
Operations
CSR
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Groups
When thinking about
creating and
maintaining a
successful business,
which are the most
important groups that
need to be considered?
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The Perfect Company
• Please identify three
to five word or
phrases of the
perfect company or
business – from
your point of view
The Perfect Company
1.
2.
3.
4.
5.
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CSR FOUNDATIONAL CONCEPTS
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Business/Society relationship
Create much of the wealth and wellbeing in societies
Capable of harm (example: pollution
Globalized capabilities
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CSR
“Corporate social responsibility”
A collection of evolving terms, concepts,
theories, and practices to describe one essential
idea:
– That business has the responsibility to do more
than comply with the minimum requirements of
law and the generation of a profit for its owners.
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“Just Good Business”
• CSR now seen as “mainstream”
• Stronger interest by governments
• Societies and stakeholders have higher
expectations
• Three layers
– Traditional philanthropy
– Risk management
– Value creation
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ISO – Social responsibility
• ISO 26000 – “Business and organizations do
not operate in a vacuum. Their relationship to
the society and environment in which they
operate is a critical factor in their ability to
continue to operate effectively. It is also
increasingly being used as a measure of their
overall performance.”
• Found at:http://www.iso.org/iso/home/standards/iso26000.htm
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Shareholder value
• “The Dow Jones Sustainability Index created a commonly
accepted definition of CSR: "a business approach that
creates long-term shareholder value by embracing
opportunities and managing risks deriving from economic,
environmental and social developments." This definition
encompasses a broad range of corporate values and
concerns, including reputation, transparency, social impact,
ethical sourcing, profitability and civil society -- the list goes
on. As a result of the interdependent nature of CSR,
integration of its values remains a challenge for many
organizations.”
– “The balanced scorecard and corporate social responsibility : aligning values
for profit.” Web location:
http://www.greenbiz.com/news/2005/10/23/balanced-scorecard-andcorporate-social-responsibility-aligning-values-profit
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Strategic CSR – class text
• “The incorporation of a holistic CSR
perspective within a firm’s strategic planning
and core operations so that the firm is
managed in the interests of a broad set of
stakeholders to achieve maximum economic
and social value over the medium to long
term.”
• P. xiii. Glossary of Terms. Class text.
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Strategic CSR is not
•
•
•
•
Exclusively philanthropic charitable giving
Unrelated to the business strategy
Solely for image building
Rigid
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Strategic CSR is about
Value
Balance
Accountability
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Strategic CSR is
• Strengthening the strategic capabilities of the
organization
– Activities supportive of unique business needs
– A balanced relationship among stakeholders
• Adaptable to changing conditions
• Medium to long term view
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Fundamental points
1.
2.
3.
Business does not
exist in a vacuum
The environment
surrounding
business is always
changing
CSR takes a longer
term view of
success
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CSR definition: Two componenets
1
CSR: A view that business
assumes a responsibility to
pursue goals in addition to
profit. (Why?)
2
CSR: A responsibility among
stakeholders to hold the
business accountable for its
actions. (Who?)
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CSR current state
Characteristics
• Recognizes the power of
business to do good or
harm
• Growing in acceptance
• Variable/fluid in application
• Evolving in theory
• Controversial
And…
• Seen as valuable
– “Just Good Business.” The
Economist.
– Location:
http://www.economist.co
m/node/10491077
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Largest CSR survey
“While corporate responsibility
reporting was broadly considered an
‘optional’ activity only a few years ago,
more organizations are generating CR
reports to meet rising stakeholder
demands for greater accountability,
transparency and accuracy in assessing
parts of the business that are not
necessarily financial, but which
contribute to the overall value of the
company.”
http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/corporate-responsibilityreporting-2011.pdf
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Strategic CSR
The CSR hierarchy – p.6
Discretionary
Responsibilities
Ethical
Responsibilities
Legal Responsibilities
Economic
Responsibilities
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Three arguments for CSR
1. Moral argument:
– Successful operations reflects the values of the
larger society
2. Rational argument:
– Maximize performance by minimizing restrictions
3. Economic argument:
– Reflects concerns of stakeholders over medium
to longer term
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Fortune – 2011 Global 500 (top 10)
Company
Rank
# Employees Home
Wal-Mart Stores
1
2,100,000
U.S.
$421,849
Royal Dutch Shell
2
97,000
Netherlands
$387,152
Exxon Mobil
3
103,700
U.S.
$354,674
BP
4
79,700
Britain
$308,928
Sinopec
5
640,535
China
$273,422
China National Petroleum
6
1,674,541
China
$240,192
State Grid
7
1,564,000
China
$226,294
Toyota Motor
8
317,716
Japan
$221,760
Japan Post Holdings
9
223,000
Japan
$203,958
Chevron
10
62,196
U.S.
$196,337
Total
6,889,388
$ Millions USD
$2,834,566
Web location: http://money.cnn.com/magazines/fortune/global500/2011/snapshots/10344.html
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CSR VALUE
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Value
How do we know something has value?
Do all valuable things use the same measures?
Why is adaptability important in business?
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How do we know?
•
•
•
•
Watch (observe)
Compare to context
Compare to others
Look for benefits
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CSR relevancy
• Five trends that seemingly will grow
throughout the 21st century:
1. Growing affluence
2. Ecological sustainability
3. Globalization
4. Free flow of information
5. Brands
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CSR relevancy
Five mega - issues
1. Climate change
2. Pollution / health
3. Globalization backlash
4. The energy crunch
5. Erosion of trust
Five demanding stakeholders
1. “Green" consumers
2. Activist shareholders
3. Civil society / NGOs
4. Governments and
regulators
5. Financial sector
http://www.greenbiz.com/news/2005/10/23/balanced-scorecard-andcorporate-social-responsibility-aligning-values-profit
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Why STRATEGIC CSR is important
Consumers want to buy products
from companies they trust
Regulate that which can’t
be trusted
Suppliers want to form
partnerships with companies
they can rely on
Something for both of us
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Why STRATEGIC CSR is important
Employees want to work for
companies they respect
Treat me well and I’ll treat
you well
Investors want to support firms
they believe are socially
responsible
Money loves safety
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CSR
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CSR Interactivity
• Each team to visit a website
– Wison: http://www.wison.com/index.php?lang=en
– Lenovo: http://www.lenovo.com/us/en/
– Changan:http://www.globalchana.com
• How difficult was it to find the CSR page?
• What did the CSR page tell you about:
– Aims
– Audiences
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Next week - Stakeholders
Preparation:
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Next week
Preparation for Class:
Read:
 Chapter 2 in the class text
 CSR Trends 2010: Stacking Up the Results. A joint report by Craib Design &
Communications and PriceWaterhouseCoopers, LLC. Web location:
http://www.pwc.com/ca/en/sustainability/publications/csr-trends-2010-09.pdf
o Pages: 4-5,, 20, 22-31, 36-39
Classroom Discussion Topics: 1) CSR relevancy (from previous week), 2) Stakeholders, 3)
Business reporting/communication about CSR,4) Benefits of CSR
Team activity:
 Expectations/alignment/non-alignment profiles of stakeholders.
 Examination of the Huagnzhou Wahaha website.
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