Chapter 10 Flashcards
Responsible business:
Business acting both efficiently and ethically, meeting and exceeding
legal requirements, and considering their impact on people and the environment
Sustainability:
Meeting the needs of the present without compromising the ability of future
generations to meet their needs around the world
United Nations Sustainability Development Goals:
A set of 17 goals declared by the United
Nations in 2015
Human rights:
Fundamental rights to which a person is entitled because they are a human being
Stakeholder:
Any group or individual who can affect or is affected by the achievement of the
organization’s objectives
Primary stakeholder groups:
The constituents on which the firm relies for its continuous survival
and prosperity
Secondary stakeholder groups:
Those who influence or affect, or are influenced or affected by,
the corporation, but are not engaged in transactions with the corporation and are not essential for
its survival
Instrumental view:
A view that treating stakeholders well may indirectly help financial
performance
Corporate social and environmental responsibility (CSER):
Firms’ engagement with social and
environmental issues in their communities
Normative view:
A view that firms ought to be self-motivated to ‘do it right’ because they have
societal obligations
Shared value creation:
An approach to CSER that focuses on activities that are good for both
the firm and its stakeholders
Greenwashing:
Talking about social or environmental initiatives without addressing fundamental
concerns
Child labour:
Working people under the age of 16
Institutional arbitrage:
The practices of locating activities wherever the costs of complying with
regulatory institutions are lowest
Pollution havens:
Countries with lower environmental standards
Race to the bottom:
Countries competing for foreign direct investment by lowering
environmental standards
Labour standards:
Rules for the employment of labourers including working hours, minimum pay,
union representation and child labour
Footloose plants:
Plants that can easily be relocated
Code of conduct (standards of engagement, code of ethics):
Written policies and standards for
corporate conduct and ethics
Health, safety and environment (HSE):
A common term to cover the areas for which companies
have mandatory standards
Compliance:
procedures to monitor and enforce standards for employees and suppliers
Compliance training:
mandator training and tests designed to ensure that every employee knows
the relevant codes of conduct
Explicit CSER:
Voluntarily assuming responsibilities of societal concerns
=> e.g. sustainability program
Implicit CSER:
Participating in the wider formal and informal institutions for society’s interests
and concerns
=> fair labour practices complying with strict environmental regulations
Philantrophy:
Donations for purposes that benefit the wider society
- Corporate donations to charities or NGOs
- Funding for education, health, or community projects
- Contributions to disaster relief or sustainability programs
Hypernorms:
Norms considered valid anywhere in the world
Defensive strategy:
A strategy that focuses on regulatory compliance with little top management
commitment to CSER causes
Accommodative strategy:
A strategy that is characterised by some support from top managers,
who increasingly view CSER as a worthwhile endeavour
Proactive strategy:
