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GMGT 1010 > Big Qs and Debates about Role of Biz in Society > Flashcards

Big Qs and Debates about Role of Biz in Society Flashcards

1
Q

What is CSR

A

voluntary actions that a corporation takes in society that address social and environmental problems/issues

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2
Q

who argued that businesses have the responsibility of CSR?

A

Howard Bowen

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3
Q

CSR in the 1960s

A

the environmental movement broadens CSR

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4
Q

CSR in the 1970s

A

CSR research explodes

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5
Q

CSR in 1980s and 1990s

A

CSR branches out

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6
Q

Why was CSR exploded over the past 30 years

A

company reputation, triple bottom line, social media, neoliberalism/globalization, how info is shared

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7
Q

Caroll’s Pyramid of CSR

A

initially it was about “what is ethical?” now it’s about “how are we perceived?”
-CSR now mostly driven by philanthropic responsibilities

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8
Q

different forms of CSR

A

corporate giving, voluntarism, corporate sponsorship, social venture philanthropy, social enterprise, community investment

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9
Q

corporate giving

A

donations, charitable foundations, cause-related marketing, strategic giving, the one-for-one model

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10
Q

corporate voluntarism

A

-The time and talent employees commit to community organizations with support/consent from employers who recognize the value of such efforts to society

-Allowing employees to take time out of their workday to volunteer (still getting paid)

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11
Q

corporate sponsorship

A

A partnership, which has been established for mutual benefit between a business sponsor and an event or non-profit (naming rights)

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12
Q

social venture philanthropy

A

The investment of human and financial resources by corporations in non-profit community development agencies to generate a social return instead of only a financial one
-working with startups who are focused on environmental gaps, building partnerships

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13
Q

social enterprise

A

A model of business operation where some or all profits are deliberately used to further social aims

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14
Q

2 kinds of social enterprises

A

full non profits, for profits

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15
Q

full non profit social enterprises

A

all funds go to social causes

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16
Q

for-profits social enterprises

A

funds are split between social causes and shareholders

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17
Q

the CSR debate

A

debate focuses on what (if any) the voluntary responsibilities of businesses should be?

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18
Q

CSR debate over time

A

Early: should businesses engage in CSR at all?

Today: is CSR enough to address the pressing social and environmental issues facing society

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19
Q

early case against CSR

A

-Friedman’s view
-Managers are agents, not principles. CSR is spending the shareholder’s money against their will
-Corporations not equipped to decide what is best for society
-CSR reduces efficiency and personal freedom
-Bizs should focus on maximizing profit as long as it stays within the rules of the game

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20
Q

the case for CSR

A

legitimacy, business case

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21
Q

legitimacy case for CSR

A

The existence of the business system depends on it’s acceptance by society

If business is to prevent criticisms or mutinous behaviour, it must be receptive to what is happening in society and respond in some way

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22
Q

the business case for CSR

A

CSR reduces costs

Increases reputation

Reduces risk

A source of competitive advantage

Win/win for everybody

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23
Q

current debates around CSR

A

-It takes the societal needs out of public hands (ie govt) and places it into private hands
-Voluntary CSR is not enough. Mandatory measures are necessary
-What does “responsibility” even mean? What about accountability

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24
Q

what are stakeholders

A

Persons or groups that affect, or are affected by an organization’s decisions, policies or operations

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25
Q

2 types of stakeholders

A

-market (primary)
-nonmarket (secondary)

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26
Q

market stakeholders

A

-The stakeholders that engage in economic transactions within a company
-Customers, employees, shareholders, suppliers

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27
Q

nonmarket stakeholders

A

-The stakeholders that do not engage in economic transactions within a company but can still affect and be affected by a company’s actions
-Communities, govt, media, NGOs

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28
Q

the shareholder view

A

Shareholders advance capital to a company’s managaers, who are supposed to spend corporate funds only in ways that have been authorized by the shareholders

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29
Q

the stakeholder view

A

Managers have a duty to both the corporation’s shareholders and “individuals that contribute either voluntarily or involuntarily, to a company’s profitability and who are therefore it’s potential beneficiaries/risk bearers

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30
Q

arguments for the stakeholder view

A

Managing stakeholders is good for shareholders

Stakeholder engagement (integration of feedback from those impacted by your organization’s operations), building trust even between those with different views

This view assumes no conflict btwn stakeholders and shareholders

31
Q

why is shareholder view dominating in US and Canada

A

it’s what we are taught, incentives for shareholder maximization, it’s the law, market discipline

32
Q

how can bizs become more stakeholder focused?

A

Smith
-changing the language
-changing attitudes and behaviours
-clear communication in the organization
Sean
-changes in corporate board structure (increase diversity)
-changes in organizations themselves
-broader structural changes in laws and regulations

33
Q

short term tactics

A

-ST tactics help a firm deal quickly with crisis or rapid change
-bc these actions are quick and low cost, their effects are incremental
-benefits and costs appear quickly and are easy to measure

34
Q

long term tactics

A

-firms seek to achieve more significant/transformational changes for durable success
-take longer to payoff and can be hard to quantify but can be game changers

35
Q

ST/LT debate

A

-how far into the future should businesses be planning for?

36
Q

does st or lt dominate in modern economy?

A

ST

37
Q

short-termism

A

an overemphasis on short term economic performance

38
Q

why is there usually more ST focus?

A

investor pressure, organizational incentives, desire for sure returns, human nature

39
Q

investor pressure and short-termism

A

-companies financed by stock mkt often pressured by investors who want quarterly returns maximized
-companies often report quarterly earnings with sales targets focused on maximizing profits during these periods

40
Q

organizational incentives and short-termism

A

executive compensation is often tied to share price
-organizations are more likely to internally focus on the ST

41
Q

desire for sure returns and short-termism

A

-LT benefits are more abstract and difficult to foresee
-managers are more likely to want to measure what is directly in front of their faces (ST wins)

42
Q

human nature and short-termism

A

humans naturally focus on the shorter term since we value satisfaction of quickly addressing a problem

43
Q

CEOs blame short-termism on

A

Short term earnings/pressure from investors
Competitive pressure
Customer demands
Short-term economic uncertainty
Limited access to capital
Lack of standard reporting for non-financial value
Regulatory requirements
Director duties

44
Q

short-termism puts organizations at risk by

A

-lack of focus on research on development
-damaging long-term stakeholder relations
-long term reputational risks
-short term cost cutting may lead to long term costs

45
Q
A
46
Q

overcoming human nature and short-termism

A

-make long term objectives part of the company culture
-clear communication, training and education
-employees working for long-term strategies

46
Q

changing investor pressures and short-termsim

A

-educate stock analysts about long-term horizon and it’s relation to shareholder value
-encourage “cumulative reporting” by regulations whereby each quarter would build on the next

46
Q

overcoming desire for sure returns and short-termism

A

-structure decision making
-balanced scoreboard (looking at shareholder/stakeholder interests, short/long term impacts and ranking to make strategic decisions))

46
Q

larger structural issues and short-termism

A

investor composition, firm structure, system of firm financing

46
Q

changing organizational incentives and short-termism

A

-performance evaluations linked to long-term performance, refined stock options, flatter organizational structure
-executive compensation linked to social and environmental goals

46
Q

what type of firm generally has a more LT focus?

A

family owned firms and privately owned companies may be more likely to pursue long term strategies than publicly owned firms

46
Q
A
47
Q

which country tends to have a more long term focus?

A

-countries where companies are financed by banks (ie Germany) tend to have a more longterm orientation than countries where firms are financed by the stock market (ie US)

47
Q

which types of investors are focused on ST? LT?

A

-individual investors (pension funds) have longer term outlook than other investors (mutual funds)

48
Q

ST goal/investment required/flexibility/expected return/expected outcome

A

-responding to changes/crisis with quick wins
-small investment
-high flexibility
-small/quick/easy to estimate return
-incremental change

49
Q

LT goal/investment required/flexibility/expected return/expected outcome

A

-building long term success and stability
-larger investment
-low flexibility
-large/slow/hard to estimate return
-transformational change

50
Q

corporate personhood

A

the ethical and legal concept where corporations may be treated as entities independent of the human beings associated with them

51
Q

business political involvement

A

participation in the formulation and execution of public policy at various levels of govt

52
Q

examples of business political involvement

A

-corporate political spending (financing of political parties)
-publicly expressed support for a candidate of a party
-publicly expressed views on political issues
-executives running for office
-management’s position on employee participation

53
Q

political action committee

A

an organization that pools campaign contributions from members and donates these funds to campaign for or against candidates/ballot initiatives/legislation

54
Q

who can PACs take funds from?

A

corporations, unions, individuals

55
Q

are PACs allowed in Canada? who can donate to political parties in Canada and how much can they donate?

A

no, not allowed
only personal donations can be made to a political party, limit of $1500

56
Q

what is a super PAC?

A

PACs that are unlimited in the amount of donations they can collect

57
Q

business lobbying

A

the process of influencing public officials to promote or secure the passing/defeating of regulations/laws

58
Q

types of lobby groups

A

umbrella associations, trade associations, ad hoc organizations/front groups, think tanks

59
Q

umbrella organizations

A

have meetings with politicians about business interests in that jurisdiction
ie Winnipeg Chamber of Commerce

60
Q

trade assoications

A

have specific interests for an industry that they lobby the government for
ie National Grocers Association

61
Q

ad hoc organizations/front groups

A

a business lobbying group where the members are hidden from the public
-often transnational
-Alliance to Feed the Future

62
Q

think tanks

A

research institute that performs research and advocacy concerning topics such as social policy, political strategy
-no standards to ensure this is peer reviewed
ie Fraser Institute

63
Q

public affairs offices

A

organizations responsible for monitoring the governmental environment of the corporation and managing the responses necessary to protect the interests of the corporation

64
Q

who do public affairs offices focus on relations with?

A

government, media, communities

65
Q

public affairs activities include

A

advertising, education, stakeholder engagement

66
Q
A

GMGT 1010 (3 decks)

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