Corporate

Social
Responsibility
GROUP 4
BUSN 302A
A31
An Introduction to
Corporate Social
Responsibility
(CSR)
 Research
into CSR – dominated by academics in the Anglo-
American areas of the world.
 For
a long time. The focus was identifying CSR activity in
companies and highlighting bad practices.
 Greenwashing
 Today,
it is widely accepted that companies are
committed to CSR and accept that is good for business
and enhances economic performance.
 Climate Change
 Child labour
 Throughincreasing of transparency, accountability is
much more recognized.

 Financial Crisis of 2008-2010

 Writers have recognized the impacts of the activities of

the organization upon the external environment and that
such organizations should be accountable.

 Stakeholder approach – recognizing the wide stakeholder

community.
 Social Contract Theory
- a contract usually implied or hypothetical is made
between citizens for the organization of the society and
as a basis for legal and political power within the society.
 Requires the businesses to act as to:

1. Benefit consumers by increasing liability resources.

2. Benefit employees by increasing their income
potential, diffusing their personal liability and
facilitating their income allocation.
3. Minimizing pollution and depletion of natural
resources and destruction of personal
accountability, misuse of political power, as well as
worker alienation, lack of control over working
conditions and dehumanization.
 Business managers must be concerned not just with the
internal running of the business but also with the
external environment in which the business operates.
Objectives of a business
 Profit maximization
 Maximizing cash flows
 Maximizing return on capital
employed
 Maximizing service provision
 Maximizing shareholder value
 Growth
 Long-term stability
 Sustainability
 Satisficing
 James Lovelock
 Gaia theory – James Lovelock
proposed a different model of the
planet earth, in his model, the whole
of the ecosphere, and all living matter
therein was co-dependent upon its
various facets and formed a complete
system. This complete system and all
its components were interdependent
and equally necessary for maintaining
the earth as a planet capable of
sustaining life.
 Population
Population- one reason for the current
concern with sustainability and therefore
with CSR.

 the population of the world is

continuing to grow and at a rate as
quick as at present.

 the united nations population division

has projected that the world population
will likely to exceed 9 billion by 2050.
Reasons of rapid population:
1. Medical Advances
2. Risingprosperity and increase in
agricultural productivity

 An increasing population increases

the requirements for goods to
consume— raising a question about
sustainability. This is particularly
pertinent as far as the need for
agricultural productions to supply
food in increasing quantities is
concerned.
 Malthus
- 18th century economist
- developed his viewed primarily as a
reaction to the optimistic opinions of his
father and his father's associates
- in his famous "An Essay on te
Principles of Populations", he made the
well-known predictions that food
shortages would occur because
population would increase at a faster
rate than food supply could be
increased — leading to mass starvation.
Population control - presently happening in China; met with
limited success and considerable evasion
- was attempted in India but was a
disaster and is not possible politically to attempt again
 Initiative
developed by the United Nation with the objective
of encouraging businesses worldwide to adopt policies
regarding sustainable and socially responsible behaviour, and
to use common framework to report on them.

 Not a regulatory instrument but a forum for discussion and a

network for communication including governments,
companies and labour, whose actions it seeks to influence;
and NGOs and civil society organizational representing its
stakeholders.
 Setsa standard for socially responsible behaviour for
business on a worldwide basis and this is important to aid
comparability as well as to set agenda for what can be
considered to be social responsibility.

 The global compact asks companies to embrace, support and

enact, within their sphere of influence, a set of core values
in the areas of human rights, labout standards, the
environment and anti-corruption.
 The Ten Principles
HUMAN RIGHTS

1. Businesses should support and respect the protection of

internationally proclaimed human rights; and

2. Make sure that they are not complicit in human rights

abuses.
 The Ten Principles
LABOUR STANDARDS

3. Businesses should uphold the freedom of association and the

effective recognition of the right to collective bargaining;
4. The elimination of all forms of forced and compulsory labour;
5. The effective abolition of child labour; and
6. The elimination of discrimination in respect of employment and
occupation.
 The Ten Principles
ENVIRONMENT
7. Businesses should support a precautionary approach to
environmental changes;
8. Undertake initiatives to promote greater environmental
responsibility; and
9. Encourage the development and diffusion of
environmentally friendly technologies.

ANTI-CORRUPTION
10. Businesses should work against corruption in all its forms,
including extortion and bribery.
 Growth, Welfare and
Sustainability
 Economic rationality provides the
theoretical grounding of most models of
growth, with the assumption being that
growth in economic terms also reflects
growth in welfare terms.

 Oneway to generate growth is through

demand creation, both by generating new
markets and by creating a replacement
market.
 Theglobalization of markets provides a short-term
opportunity for growth but also in the longer term increases
competition and lead to problems of sustainability and
demand creation.

 Welfis reducing as wealth is increasing.

 In conclusion, CSR is an important subject which affects all
aspects of business behaviour. It also affects all aspects of
society and has a significant impact upon each of us
individuals.
 Corporate
Social
Responsibility
GROUP 4
BUSN 302A
A31
 Defining CSR: Contested
Terrain
Definitions of CSR
- broadest definition is concerned with what is - or should be-
the relationship between global corporations, governments of
countries and individual citizens.

"Should corporations be controlled through increased

regulation or has the ethical base of citizenship been lost and
does it need replacing before socially responsible behavior will
ensue?"
 The central tenet of social responsibility is the social contract
between all the stakeholders and society, which is an essential
requirement of social society.
 Socialresponsibility also requires a responsibility towards the
future and future members of society.

CSR- a concept whereby companies integrate social and

environmental concerns in their business operations and in their
interaction with their stakeholder on a voluntary basis.
We can think of CSR and the relationship
between corporations and society in a
number of ways:

1. Corporations are part of society

2. Profit is all that matters
3. CSR is conditional
 Effects of organizational
activity
 Theutilization of natural resources as a part of its production
processes.
 Theeffects of competition between itself and other
organizations in the same market.
 The
enrichment of a local community through the creation of
employment opportunities.
 Transformationof the landscape due to raw material
extraction or waste product strorage.
 Effects of organizational
activity
 The distribution of wealth created within the firm to the
owners of that firm (via dividends) and the workers of that
firm (through wages) and the effect of this upon the
individuals.
 And,more recently, the greatest concern with climate
change and the way in which the emission of greenhouse
gases are exacerbating this.
 Brundtland and Sustainable
Development
 in 1983 the United Nations established the World
Commission on Environment and Development (WCED)
under the chairmanship of Gro Harlem Brundtland,
subsequently became known as Brundtland Commission and
its report Our Common Future.

 the commission was created to address a growing concern

‘about the accelerating deterioration for economic and
social development.’
 Typology of CSR

 CSRis a developmental process and changes as

organizations mature in their behavior and attitude
towards both their stakeholders and their ideas concerning
social responsibility.
 David Crowther
 together with his colleagues,
developed the Stages of maturity of
CSR activity.

 it shows the way in which CSR

develops in organizations as they
become more experienced and more
convinced of the benefits and
commitment to this form of corporate
activity.
 Stages of
Maturity of
CSR Activity
 Greenwashing- is a form of spin in which green PR or green
marketing is deceptively used to promote the perception that
an organization's products, aims or policies
are environmentally friendly.
 In reality, probably every organization has progressed to a
stage of greater maturity.
 there is double imperative- to improve
financial performance and socially responsible
image.
 All organizations have progressed through this
stage.
 All corporations are concerned with their
important stakeholders and make efforts to
satisfy their expectations.
 Most organizations have progressed through
this stage too.
 Most large companies provide social and
environmental reports.
 it is probably true to this state that this is the
currents state for most organizations.
 A full understanding of sustainability would
imply radical changes to business practice and
a significant amount of process re-
engineering.
 Most companies are only starting to reach this
stage and t grapple with the issues involved.
 The firm is responsible for ensuring socially
responsible behavior among its suppliers as
well as its own company.
 It is claimed that some companies are at this
stage, but still a minority of companies.
 It is based upon the fact the multinationals
can decide where to locate their operations
and all that is high- value added operations
are located in developed countries.
 Represents our wishes rather than actuality.
 The Relationship Between CSR and Business
Financial Success

 Oftenthe more significant the power that multinational

corporations and some groups of stakeholders in affirm
have, the more is spoken about CSR.

 “Betterperformance results in greater attention to

multiple stakeholders.”

“ that orientation to multiple stakeholder groups

influences performance.”