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CSR - Corporate Social Responsibility

PHI401 Lecture on Corporate social Responsibility

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4 views10 pages

CSR - Corporate Social Responsibility

PHI401 Lecture on Corporate social Responsibility

Uploaded by

azmyen.chowdhury1128
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Corporate Social Responsibility

OVERVIEW
Analyse the notion of responsibility for corporations;
Distinguish the various concepts of CSR;
Present the stakeholder theory of the firm;
Outline the concept of corporate accountability;
Critically examine the notion of corporate citizenship;
Discuss implications of these – mostly US-born – concepts for
different regions
KEY FEATURES OF A
CORPORATION
A corporation is essentially defined in terms of legal
status and the ownership of assets
Corporations are typically regarded as ‘artificial
persons’ in the eyes of the law
Corporations are notionally ‘owned’ by shareholders,
but exist independently of them
Managers and directors have a ‘fiduciary’ responsibility
to protect the investment of shareholders
CAN A CORPORATION HAVE
SOCIAL RESPONSIBILITIES?

Milton Friedman’s classic article is “The social


responsibility of business is to increase its profits”
(1970)
Friedman vigorously argued against the notion of
social responsibilities for corporations based on three
main arguments:
 Only human beings have a moral responsibility for their actions
 It is managers’ responsibility to act solely in the interests of
shareholders
 Social issues and problems are the proper province of the state
rather than corporate managers
CAN A CORPORATION BE
MORALLY RESPONSIBLE FOR
ITS ACTIONS?
Evidence to suggest that legal designation of a corporation
makes it unable to be anything but self-interested (Bakan
2004)
Long, complex debate but generally support from literature for
some degree of responsibility accredited to corporations.
Argument based on:
 Every organisation has a corporate internal decision structure which directs
decisions in line with predetermined goals (French 1979)
 All organisations manifest a set of beliefs and values that lay out what is
generally regarded as right or wrong in the corporation – organizational
culture (Moore 1999)
WHY DO CORPORATIONS
HAVE SOCIAL
RESPONSIBILITIES?
Business reasons (‘enlightened self-interest’)
 Extra and/or more satisfied customers
 Employees may be more attracted/committed
 Forestall legislation
 Long-term investment which benefits corporation

Moral reasons:
 Corporations cause social problems
 Corporations should use their power responsibly
 All corporate activities have some social impacts
 Corporations rely on the contribution of a wide set of stakeholders in society,
not just shareholders
WHAT IS THE NATURE OF
CORPORATE SOCIAL
RESPONSIBILITIES?

Corporate social responsibility includes the


economic, legal, ethical, and philanthropic
expectations placed on organizations by society at a
given point in time
(Carroll and Buchholtz 2009:44)
CARROLL’S FOUR-PART
MODEL OF CORPORATE
SOCIAL RESPONSIBILITY
Desired by society
Philanthropic
Responsibilities
Expected by society
Ethical
Responsibilities

Required by society
Legal
Responsibilities
Required by society
Economic
Responsibilities
Source: Carroll (1991)
CSR AND STRATEGY:
CORPORATE SOCIAL
RESPONSIVENESS

Corporate social responsiveness refers to the


capacity of a corporation to respond to social pressures
(Frederick 1994)
4 ‘philosophies’ or strategies of social responsiveness
(Carroll 1979)
 Reaction
 Defence
 Accommodation
 Proaction
OUTCOMES OF CSR: CORPORATE
SOCIAL PERFORMANCE

Outcomes delineated in three concrete areas:


 Social policies
 Social programmes
 Social impacts

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