7.6.3 Corporate Social Responsibility

Question 1

Corporate Social Responsibility

Answer 1

CSR is a term used to describe an approach whereby businesses seek to exceed basic legal requirements by considering their impact on society.

Question 2

Satisfying Employees

Answer 2

Businesses focussing on their social responsibilities may seek to satisfy their employees by offering job security, safe working conditions and fair wages.

Question 3

Satisfying Customers

Answer 3

Businesses focussing on their social responsibilities may seek to satisfy customers by offering reliable products, fairly priced, which exceed legal safety requirements.

Question 4

Satisfying Shareholders

Answer 4

Businesses focussing on their social responsibilities may seek to satisfy shareholders by increasing share price and through payment of stable and regular dividends.

Question 5

Satisfying Suppliers

Answer 5

Businesses focussing on their social responsibilities may seek to satisfy suppliers through paying fair prices, making regular on-time payments and offering exclusivity.

Question 6

Satisfying the Community

Answer 6

Businesses focussing on their social responsibilities may seek to satisfy the community by offering employment and funding restoration projects and community facilities.

Question 7

Carroll’s CSR Pyramid

Answer 7

Can be used by leaders and managers, containing 4 layers.

Economic, Legal, Ethical, Philanthropic

Question 8

The Shareholder Concept

Answer 8

The shareholder concept states that businesses have a responsibility only to raise value for shareholders through increasing share prices and paying dividends and that profit maximisation is the only focus of the business.

Question 9

The Stakeholder Concept

Answer 9

The stakeholder concept states that as well as satisfying shareholders’ needs, the business must place equal emphasis on satisfying the needs of all other stakeholders, including employees, customers and suppliers.