LESSON 9: THE

CONCEPT OF
CORPORATE SOCIAL
RESPONSIBILITY
CORPORATE SOCIAL
RESPONSIBILITY
 Is a self-regulating business model that helps a company be socially accountable—to itself, its
stakeholders, and the public. By practicing corporate social responsibility, also called
corporate citizenship, companies can be conscious of the kind of impact they are having on all
aspects of society, including economic, social, and environmental.
 To engage in CSR means that, in the ordinary course of business, a company is operating in
ways that enhance society and the environment, instead of contributing negatively to them.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
AND ITS DIFFERENCE FROM BUSINESS
ETHICS
 Business Ethics is sometimes confused with corporate social
responsibility or CSR. Although the two are related, they are not
quite the same. It is important to understand how they are different
as well as how they are related to each other.
 The phrase CORPORATE SOCIAL RESPONSIBILITY refers to a
corporation’s responsibilities or obligations towards society.
10 PRINCIPLES OF CSR
Human rights
1. Businesses should support and respect the protection of internationally proclaimed human
rights and
2. Make sure they are not complicit in human rights abuses
Labor
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
10 PRINCIPLES OF CSR
6. Eliminate discrimination in respect of employment and occupation Environment
7. Businesses should support a precautionary approach to environmental challenges
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.
BUSINESS CASE OF
CORPORATE SOCIAL
RESPONSIBILITY
 The business case refers to the underlying arguments or rationales supporting or documenting
why the business community should accept and advance the CSR cause.
 The business case for CSR is undeniable, the drivers for companies to act ethically and with
integrity is now crucial for their reputations when dealing with informed employees,
consumers, communities, investors and other stakeholders.
 The direct benefits of CSR are many, it is shown to:
 Drive innovation, trust and transparency
 Boost long-term profitability
 Ensures competitiveness
 Engage the workforce
LESSON 10:HISTORY AND
PERSPECTIVES ON
CORPORATE SOCIAL
RESPONSIBILITY
 THE VALDEZ PRINCIPLES
The Valdez Principles were formulated after a major oil spill from an Exxon tanker- the Exxon Valdez which ran aground near Valdez,
Alaska, on March 24, 1989 and spilled 240,000 barrels- 11 million gallons of crude oil which eventually covered 2.600 square miles
of Prince William Sound and the Gulf of Alaska. Although the Exxon spill was not the largest ever, it was one of the worst in terms of
environmental damage and long-term effects.
 The ten Valdez Principles that ask companies to agree with include the following actions:

1. Protection of the biosphere

2. Sustainable use of natural resources
3. Reduction and disposal of waste
4. Wise use of energy
5. Risk reduction
6. Marketing of safe products and services
7. Damage compensation
8. Disclosure
9. Environmental directors and managers
10. Assessment and annual audit
HISTORY OF CSR
 Organizations are being called upon to take responsibility for the ways their
cooperation's impact societies and natural environment. It is no longer
acceptable for a corporation to experience economic prosperity in isolation
from those agents impacted by its actions.
 A firm must now focus its attention on both increasing its bottom line and
being a good corporate citizen (D’Amanto et al., 2009). The field of social
responsibility of business has grown significantly and today contains a great
proliferation of theories, approaches, and terminologies. Society and
business, social issues management, public policy and business, stakeholder
management, and corporate accountability are just some of the terms used to
describe the phenomena related to corporate responsibility in society
THE ‘‘THIRD SECTOR’’ AND
SOCIAL ENTERPRISE
 Doubtless, we are witness today a remarkable growth in this so-called ‘‘third-
sector’’(i.e., in socio-economic initiatives which belong neither to the traditional
private for-profit sector nor the public sector).
 These initiatives generally derive their impetus from voluntary organizations and
operate under a wide variety of legal structures. In many ways, they represent the
new or renewed expression of civil society against a background of economic crisis,
the weakening of social bonds, and difficulties of the welfare state(Borzaga and
Defourny, 2004.)
 Not withstanding the surge in the creation and growth of such ‘‘third sector
enterprises,’’ one could say that descriptive researches on the success and challenges
of such enterprises as well as the factors accounting for the effectiveness and
sustainability of those organizations seem wanting.
THE ‘‘THIRD SECTOR’’ AND
SOCIAL ENTERPRISE
 The social enterprise movement is growing and gathering
supporters across the globe as an innovative approach to business
activity offering disadvantaged populations a path to human
development and economic prosperity.
 There is increasing recognition among businesses, governments,
and non-governmental organizations (NGOs) that their participation
in these initiatives can lead to substantial benefits for disadvantaged
and underserved populations, while simultaneously providing
opportunities for income generation (Nielsen and Samia, 2008).
THE ‘‘THIRD SECTOR’’ AND
SOCIAL ENTERPRISE
 Business, as we know it in the world today, is a social institution
developed according to a certain perception which saw it as
fundamentally concerned with making a profit. That perception is
stated by Milton Friedman in his now-classic utterance:
 ‘‘The primary and only responsibility of business is to make a
profit.’’
CASE STUDY 1
APB was launched on June 16, 2010 and has reached more that 20,000 public school students as the
end of 2014. It envisions the revival of the high moral and cultural values of the Filipino for the good
by assisting schools and communities through its project called CaCHET(Campaign for Character
Education Tenacity). APB empowers public school communities, youth, parents, and teachers through
character formation, teaching them to become God-fearing, productive, responsible, and self-reliant.
APB volunteers undergo an intensive formation to equip them to teach character education and give
catechism classes. Volunteers usually come from different professions-teachers, engineers, architects,
accountants and even housewives. The plan of formation for volunteers is well-rounded-encompassing
ethical formation, values and religious formation, and professional formation(they undergo classes on
preparation of lesson plans, actual teaching, and child psychology).
APB believes that character education is key to helping people see what is true, good and beautiful in
life despite hardships at home, in school, and elsewhere. Volunteers share their time and talent, skills,
and experience to teach children the basics of Christian living.
QUESTIONS TO ANSWER
1. What actions are taken by APB to support many areas of CSR?

2. Explain CSR.
LESSON 11: STAKEHOLDER
THEORY: A COMPREHENSIVE
APPROACH TO CORPORATE
SOCIAL RESPONSIBILITY
DEFINITION OF
STAKEHOLDER
 A stakeholder is a party that has an interest in a company and can either affect or be affected
by the business.
 1960 – the development of the term stakeholder.
 1963 – the Stanford Research Institute introduced the original definition of stakeholders.
 1984 – the publication of Freeman's work Strategic Management: A Stakeholder Approach.
 COMPANY STAKEHOLDER
 The responsibility principle states that “Most people most of the time, want to and do accept
responsibility for the effects of their actions on others.”
 Primary stakeholders – participation is required for the company’s survival.
 Secondary stakeholders – relationship is not considered as vital for the company
 Voluntary stakeholders – are taking risk by investing a form of capital in the business.
 Involuntary stakeholders – they expose themselves to the consequences of the company’s activities.
 Internal stakeholders are people whose interest in a company comes through a direct relationship,
such as employment, ownership or investment.
 External stakeholders are those people who do not directly work with a company but are affected in
some way by the actions and outcomes of said business.
CHALLENGES IN CSR
 CSR is of pressing importance as it significantly influences the sort of lives we will lead in the
future. Furthermore, the distinctive nature of entrepreneurial action leads to a distinctive set of
ethical problems and ethical obligations.
WHAT IS STAKEHOLDER
THEORY?
 Stakeholder theory is fundamentally about how a business works at its best and how it could
work
STAKEHOLDER APPROACH TO
CORPORATE SOCIAL
RESPONSIBILITY (CSR)
Following the stakeholder theory, a socially responsible firm requires simultaneous attention to
the legitimate interests of all appropriate stakeholders and has to balance such a multiplicity of
interests and not only the interests of the firms stockholders.
5A
Define and Explain what is a stakeholder.