4.6: Ethical Decisions and Approaches to CSR Flashcards
What is Corporate Social Responsibility (CSR), and when did the term gain significance?
CSR refers to the idea that business people should consider the social consequences of economic actions when making business decisions. The term gained significance since the 1960s, especially in the age of social media and citizen journalism.
In the context of CSR, what is the significance of social media and “citizen journalists”?
Social media and “citizen journalists” can expose a company’s problems and difficulties on a large scale in a short time, highlighting the importance of CSR in managing public perception and preventing stock dumping.
How does CSR relate to business decisions?
CSR suggests that business decisions should presume in favor of choices that have both good economic and social consequences, meaning that economic actions should consider their social impact.
What are some alternative terms or variations for Corporate Social Responsibility (CSR)?
CSR is also known by various names, including sustainably responsible business, social performance, corporate social performance, corporate citizenship, and corporate conscience, among others.
How do companies practice CSR in their interactions with different stakeholders?
Companies self-regulate their interactions with customers, suppliers, government, and employees to ensure compliance with the social-cultural and political-legal-regulatory environment in various geographic areas where they operate.
What is the concept of Corporate Social Responsibility (CSR) in relation to multinational corporations?
CSR suggests that multinational corporations, due to their substantial power and resources, have a social responsibility to give something back to the societies that enable their success.
What does the term “noblesse oblige” mean in the context of CSR?
“Noblesse oblige” is a French term that signifies honorable and benevolent behavior considered the responsibility of successful enterprises.
It implies that businesses should recognize their responsibility to contribute to the welfare of the communities that support them.
Why is CSR considered the right way for businesses to behave according to some advocates?
Advocates argue that CSR should be supported for its own sake because it is morally right.
Large successful businesses, in particular, are expected to practice CSR and give back to the societies that have enabled their prosperity.
What is the “obstructionist stance” in the context of CSR?
The obstructionist stance is when an enterprise makes it difficult for customers or journalists to effectively complain about unethical situations by using tactics such as excessive paperwork, denial of authority, stalling tactics, or citing technological issues.
What characterizes the “defensive stance” in CSR?
The defensive stance involves responding to complaints with excuses like “it wasn’t our fault” or making customers believe that the problem is insurmountable.
It often arises from a perception that the primary goal is to make money for the company.
How do some companies take the defensive stance in compliance with the law?
Some companies obey the law strictly but do not consider fairness or compassion, especially in situations where travel agencies and airlines go bankrupt, leaving customers stranded in foreign destinations.
What is the “accommodative stance” in CSR, and why is it beneficial for companies?
The accommodative stance involves exceeding customer expectations when responding to problems.
It benefits companies by leading to repeat customer purchases, good public relations, and positive impacts on the company’s brand in a competitive environment.
What is the role of customer relationship management (CRM) and customer lifetime value (CLV) in adopting the accommodative stance?
In an intense competitive environment, companies recognize that market development, which means making more money from each customer through repeat business, upselling, and cross-selling, is crucial.
An accommodative stance in handling customer complaints and publicity issues contributes to successful market development.
What characterizes the “proactive stance” in CSR?
The proactive stance involves companies, associations, and government agencies proactively reaching out to customers, members, or citizens to inform them in advance about events or issues.
It includes explaining how they will respond to mitigate negative effects and maintain operations.
What are the managerial implications of attending to ethical considerations in a globalized economy?
Company executives must not only “do the right thing” but also appear to be doing the right thing for the media.
Ethical issues raised in the media can negatively affect shareholder confidence, leading to potential stock price fluctuations and financial risks.
