Business Chapter 5 Flashcards
What is CSR?
A tangible effort by many businesses to combat social imbalances and create equal access to goods and services
Which 4 categories can the CSR be broken into?
Environmental responsibility
Ethical responsibility
Philanthropic responsibility
Economic responsibility
How can corporations use their power and influence to contribute to the common good of markets?
1.Partnerships with the gov, businesses, communities or by themselves providing safe job opportunities.
2.Industy can develop new technologies for energy efficiency/products to provide the poor with access to markets.
3.Corporations can lessen their impact on societies and the environment ,or even contribute to social development
Former and Latter
Former focuses solely on the responsibility aspect of business
Latter focuses on business being a social player by virtue of both its rights and responsibilities as a citizen
Different practical orientations
1)Companies have a responsibility for their impact on society and natural environment
2)Companies have a responsibility for the behaviour of others with whom they do business(within supply chain)
3)Companies need to manage their relationship with wider society
CSR is important because:
1)Contributes to sustainable development,including health and welfare society
2)It takes into account the legitimate interests and expectations of stakeholders
3)Is in compliance with applicable law and consistent with international norms of behaviour
4)Is integrated throughout the company and practiced in its relationships
Elkington(three-pronged fork)
People, profit, planet
CSR in contemporary business management
1)The continuation of virtual community engagement
2)Measuring CSR impact
3)Role model behavior
4)A focus on sustainability
5)The necessity of equity and diversity
6)Employee volunteer programmes
List the different drivers
Social Drivers
Governmental Drivers
Market Drivers
Ethical Drivers
Social Drivers
Consumers prefer socially responsible products and services, and employees increasingly choose to work for companies with a reputation for being socially responsible.
Governmental Drivers
Companies must comply with the law in order to operate in the country
Legislation encourages corporate behaviour that is socially and environmentally responsible as well ethical reporting
Market drivers(increase revenue through CSR)
1)Developing new products/services
2)Growing markets for services
3)General programmes such as job creations
4)Improving access to markets
5)Avoiding boycotts
6)Exploiting the CSR premium
Market drivers(reduce costs through CSR)
1)Avoiding fines
2)Avoiding legal costs
3)Using resources efficiently
4)Using alternative raw material sources
5)Increasing staff retention
6)Reducing the cost of capital
Ethical drivers
Does not only apply to external damage. It also applies to responsible business dealings
Issues for which a business case cannot be made
Company’s visibility, location, size, ownership structure and the sector and market segments in which it operates
Corporate Governance
Ethical and effective leadership.
Companies are managed and controlled; the relationship between those who govern and those who are governed. How can organization makes decisions about how to manage its affairs
Board of directors
Group of people assembled to lead and control the company so that it functions in the best interests of its shareholders(fiduciary-trust)
Director
Stands in the fiduciary relationship to the company and is bound by fiduciary responsibilities
Boards
Executive directors and non-executive directors are not involved in day-to-day operation of the business of the company.
Governing body’s primary governance roles and responsibilities
1)Steers and sets strategic direction with regards to:
i)the org’s strategy
ii)The way in which governance areas are to approached, addressed and conducted
2)Ensures accountability for organizational performance by means of, amongst others, reporting and disclosure
3)Approves policy and planning that give effect to strategy and sets the directions
4)Oversees and monitors implementation and execution by management
Three ways to determine how to establish the corporate policy for CSR
1)A values-based system
Company’s own mission, vision, values and guiding principles
2)Stake-holder engagement process
Allows stakeholders to determine what they want from the company and what they consider to be the issues and culture of the company ,is a reactive approach
3)Combination of both
6 basic steps in the stakeholder-engagement process
1)Prepare
Identify and understand the territory to be explored through the engagement process with stakeholders
2)Plan
Set objectives and parameters for the engagement process and identify and prioritize stakeholders with whom to engage
3)Design
Co-develop the engagement plan, including the agenda and logistics, to meet the engagement objectives
4)Engage
Successfully meet the objectives through execution of engagement plan with stakeholders
5)Evaluate
Assess the outcomes of engagement for both the company and stakeholders against specific objectives
6)Apply
Share information and integrate the outcomes of the engagement process appropriately into business practices
Material issues
Issues that are relevant and significant to an org and its stakeholders
The materiality determination process requires
1.The identification of the issues ,needs and concerns of stakeholders
2.Issues are evaluated against suitable and explicit criteria
3.That findings from evaluation should be used to determine the significance of each issue
4.The orgs take into consideration the changing sustainability context and maturity of issues and concerns
