Chapter 10 - Corporate Social Responsibility

Question 1

Corporate social responsibility

Answer 1

The notion that corporations have an obligation to society to take into account not just their economic impact but also their social and environmental impact.

Question 2

CSR - Moral Case

Answer 2

• It is the right thing to do because you are a good corporate citizen with the same social and environmental obligations
• Goodpaster and Matthews – moral agents – accountable for actions
• Donaldsons: Corporations are a creation of society and therefore should serve the needs of society
• George: Reinforce view hat corporations are social institutions and creations of society

Question 3

CSR - Business Case

Answer 3

• Countries such as Europe and Japan regard corporations as social institutions with a strong public interest agenda
• UK and North America – maximizing shareholder value is the goals
• Another reasons large corporations have increased the size of their CSR department is to deal with NGOs
• CSR is on the corporate agenda but it is difficult to determine if business sees it as a duty to society of for business sense

Question 4

Advantages of CSR:

Answer 4

• Brand value and reputation
• Operational effectiveness
• Risk reduction and management
• Organisational growth
• Business opportunity

Question 5

CSR - Corruption:

Answer 5

• Occurs when organisation or individual profit improperly through their position in both public and private sector
• Examples include:
  o Extortion, bribery, favoritism, nepotism, embezzlement and fraud
• Risks for businesses:
  o Loss of reputation
  o Legal risks
  o Adds substantially to the cost of doing business
  o In paying bribes, there is no certainty you can get what you want and no recourse to any retribution if you don’t

Question 6

CSR - Child Labour:

Answer 6

• Work that is done under the specified age for work, which either deprives them of schooling, causes them to leave school early or requires a combination of schooling and long hours of work
• Hazardous work: Exposing children to damaging work – hinders mental, physical and emotional development
• Push factors: poverty, lack of educational opportunities, family breakdown, culture
• Pull factors: cheap labour, obedience, skills, inadequate laws, poor infrastructure
• UN Millennium goals: Eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, reduce child mortality rate, combat HIV/AIDs, ensure environmental sustainability, develop a goal partnership for development