1.3 Corporate Social Responsibility

Question 1

A stakeholder is:

Answer 1

a group / individual who has an interest in what the org does or an expectation of the org.

Question 2

Three categories of stakeholders:

Answer 2

• internal
• connected
• external

Question 3

Internal stakeholders are and include:

Answer 3

• intimately connected to the org and their objectives will have a strong influence on how it’s run
• Employees - pay, working conditions and job security
• managers / directors - status, pay, bonus, job security

Question 4

Connected stakeholders are and include:

Answer 4

• either invested in or have dealings with the org.
• Shareholders - dividends and capital growth and continuation of bus.
• Customers - value for money goods and services
• Suppliers - paid promptly
• Finance providers - repayment of finance

Question 5

External stakeholders are and include:

Answer 5

• do not have a direct link to org but can influence or be influenced by it’s activities
• Community - no negative impact on their lives by bus decisions
• Environmental pressure groups - no harm to external environment
• Government - provision of jobs and taxes and compliance with legislation
• Trade Unions - to take an active part in decision making
• Competitors - to understand the actions of competitors that will impact the org performance and influence decision making

Question 6

The needs / expectations of different stakeholder groups may:

Answer 6

be in conflict, in which case the org will need to decide which stakeholder’s needs are more important. (normally the more dominant stakeholder)

Question 7

To determine the dominant stakeholder the org can use:

Answer 7

Mendelow’s power-interest matrix (pg 13)

Question 8

The dominant stakeholder can be determined by plotting each stakeholder according to the:

Answer 8

• power they have over org and interest they have in a particular decision
• needs of key players must be considered when formulating and evaluating new strategies
• needs of other stakeholders must also be considered (nearly every decision becomes a compromise)

Question 9

Corporate Social Responsibility (CSR) refers to the:

Answer 9

• idea that an org must be sensitive to needs and wants of all stakeholders, not just shareholders
• a socially responsible org seeks to exceed their obligations to all stakeholders
• Bus ethics are just one dimension of CSR

Question 10

A socially responsible org may consider:

Answer 10

• the environmental impact of production / consumption (eg. use of non-renewable / non-recyclable inputs)
• health impact of certain products eg. alcohol & tobacco
• fair treatment of employees
• whether it’s right to experiment on animals
• safety of products and production processes

Question 11

Traditionalists argue that:

Answer 11

• org should operate solely to make profits for shareholders and it’s not their role to worry about social responsibility

Question 12

The modern view is that by:

Answer 12

• aligning the org core values with those of society it can improve it’s reputation and ensure a long-term future

Question 13

A good CSR should contribute to profitability (increase in revenue and/or reduction in costs) due to:

Answer 13

• Differentiation - can act to make goods & services different from competitors (eg. environmentally safe)
• high caliber staff can be attracted and retained
• brand strengthening due to honest approach
• lower costs can be achieved in a number of ways eg. less packaging / energy
• Identifying new market opportunities and changing social expectations.