CH7 - Corporate Social Responsibility (concept)

Question 1

Corporate Social Responsibility (CSR) meaning

Answer 1

The way a corporation achieves a balance among it economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations

Question 2

5 key elements of CSR

Answer 2

1) corps have responsibilities beyond the production of g&s
2) these resp. involve helping social problems esp those they have helped create
3) corps have a broader constituency than just shareholders alone
4) corps have impacts that go beyond simple marketplace transactions
5) corps serve a wider range of human values that can be captured by a sole focus on economic values

Question 3

3 expectations placed on business due to its 3 roles

Answer 3

roles : legitimacy, public responsibility, managerial discretion
expectations : as institution in society, as corp/org in society, as individual managers (more actors in corp)

Question 4

role / principle of legitimacy

Answer 4

-> external focus on expectations of society
-> society grants the right to business to operate
-> adherence to social norms of soc.
-> pressures particularly strong on some corps (large or consumer products)

Question 5

role / principle of public responsibility

Answer 5

-> beyond general exp. of society at the corp level
-> determined by the uniqueness for circumstances of the corp
-> resource dependence
-> involves managing relationships with immediate env.

Question 6

role / principle of managerial discretion

Answer 6

-> involves individual choices/managerial discretion
-> individual decision makers or managers determine
-> relates to the latitude of action possible by management
-> focuses on a range of strategic options available to management

Question 7

CSR debate - for involvement

Answer 7

• corps part of an interdependent “system” within society -> business must satisfy society’s needs + expectations
• CSR prevents public criticism, discourages further gov involvement / regulation
  -> social prob. can become opportunities (good for the bottom line)
  -> bus. should be given the opportunity to solve social problems
  -> businessper. are concerned humans (not appropriate for them to ignore social matters)

Question 8

CSR debate - against involvement

Answer 8

• profit maximization is not the primary purpose of business (if its the only purpose - not soc. resp.)
• corps are responsible shareholders - no authority to operation in social area
• social policy is the role of gov. (not business)
• business involvement in social matters incr. costs
• businesses cannot be held accountable for their actions in a way sufficient to satisfy demands for social involvement
• man. are not morally perfect + self interest can overtake decision making

Question 9

4 kinds of business cases of / for sustainability

Answer 9

1) reactionary - focus on profit-seeking behaviour + minimizing costs
2) reputational - how b. is portrayed in media and society
3) responsible - striving for b. excellence where cop success is measured by eco., envi., and soc. indicators
4) dialogue based - engagement with broad range of shareholders leads to collab. and understanding of initiatives that will have soc., env., and eco. benefits

Question 10

3 social responsibility theories

Answer 10

1) Amoral View : trad view of business as merely profit-making entity
2) personal view : corps as collectives that act as individuals -> exist as legal persons + can be held accountable for actions
3) social view : corps are social institutions in society with soc. responsibilities