CH8 - Corporate Social Responsibility (practice) Flashcards
Different responses to CSR (7)
1) Social entreprise (social return / mixed return)
2) CSR recognition / embracers
3) Cautious CSR adaptors
4) Tokenism / greenwashing
5) Amoral
6) Anti-CSR
7) Unknown
What is the CSR response: Social entreprise (social return / mixed return)
social return : Organizations that operate with a social mission without the intention of operating to make profits with all earnings committed to social causes or
projects (goodwill)
mixed return: Organizations that operate with a social mission but with the intention of making a profit. A portion of profits are committed to social causes or projects with the remainder reinvested or returned to owners (value village)
=> both high acceptance of CSR
What is the CSR response: CSR recognition or embracers
CSR and sustainability placed high on corporate agenda. Often are larger corporations and traded on stock exchanges. Corporate giving and citizenship are involved. Publish “social reports” of their initiatives.
=> above average acceptance of CSR
What is the CSR response: Cautious CSR
adaptors
Recognize CSR and sustainability but focus on savings from environmental
projects, energy cost reductions, material efficiency, and risk reduction
=> some recognition regarding acceptance of CSR
What is the CSR response: tokenism / greenwashing
Corporations are not serious about CSR, but believe they should respond. Might be forced into initiatives by non-governmental organizations (NGOs), the media, or competitors. NGOs allege many multinational corporations are responding this way.
=> low commitment
What is the CSR response: Amoral, Anti-CSR
Amoral : Corporations, and their managers, simply ignore CSR, intentionally or unintentionally. Difficult to identify and measure numbers
Anti-CSR : As CSR is widely accepted and practised, it is unlikely that these
corporations will identify themselves as being anti-CSR. Difficult to
identify numbers
=> both very little acceptance of CSR - only by chance / legal requirement
Risks associated with not practicing CSR (3)
1) Damaged reputation:
- neg. media coverage, boycotts, lost sales and revenues, decrease in share value
2) Increased spending to remedy past damage for core activities:
- increased shareholder activism, civil lawsuits, criminal and regulatory prosecution
3) suspended operating permits:
- liability for the conduct of subsidiaries and arm’s length affiliates (e.g. suppliers)
- increased and onerous gov. regulation
planning and managing CSR programs : what activities need to include (5)
1) (corporate) philanthropy
2) corporate giving
3) voluntarism
4) sponsorship
5) community investment
CSR corp. activities: corporate philanthropy
def= effort of business to contribute to society socially and is manifested by donations of money or goods and services in kind (donate to an org, charity)
arguments FOR corporate giving
–> Means to express CSR to community (business not just concerned with society as a
market)
–> Promotes image of good citizenship and
creates goodwill
–> Business benefits from volunteer sector
–> Benefits from corporate community
investment program
–> Company’s success is linked to community’s
health
arguments AGAINST corporate giving
–> Funds given belong to shareholders; presumptuous of managers to give funds and to choose recipients
–> Social welfare is the job of government
–> Gives business more power in society
–> Corporation might become accountable for actions of charity; adverse publicity could damage corporation’s image
–> No guidelines or standards to measure, evaluate, or monitor corporate giving
How are corporate giving decisions made? (+ reasons for rejection)
-> Historically, corporate giving decisions made
by individual executives (or wealthy individuals)
-> Large corps make donation decisions by committee consensus
-> Establish the objectives for giving (how much money
is given and to whom)
-> Decisions made to fund - or to reject – requests
-> Reasons for rejection:
-> Not enough funds, donation already made to similar organization, not within community, inadequate financial statements, etc.
Trends and concerns in corporate giving (3)
1) Charitable foundation: corporation or trust that is constituted and operated
exclusively for charitable purposes
2) Cause-related marketing: purchase of particular product results in a donation being made to a non-profit organization’s program
3) Strategic giving: attempt to rationalize the shareholder interest with corporate philanthropy where the corporation benefits directly from the funds given
social venture philanthropy
def= investment of human and financial resources in non-profit community development agencies to generate a social return vs. only a financial one
- Also known as social venturing, the new
philanthropy and high-engagement philanthropy - Applies venture capital management practices to
social responsibility
venture philanthropy vs impact investing
Venture philanthropy specifically focuses on social causes (minimal to no financial return, active engagement), while impact investing focuses on achieving social impact and financial returns (investments, less risky)
