Chapter 3 - Social Responsibility Flashcards
Corporate social investment
Actual resources invested in these stakeholders
Financial performance is important to owners and management
Social performance is equally important to external stakeholders
King report wants to move away from BL to TBL
Economic
Environmental
Social
Sustainability
Make a difference in the long term
Nb to start setting up structures to enable community to start becoming self sufficient
Interest groups
Primary social responsibility
Broader social responsibility
Interest groups
Primary social responsibility
Towards the business itself
Owners: interest in financial perf Employers: " impacts remuneration Suppliers: expect prompt payment Consumers: expectations Competitors: intellectual property
Interest groups
Broader social responsibility
Contributions
Government has an interest as businesses pay tax which is used to create infrastructure
Contributions: Upliftment of poor Health and safety AIDS prevention and treatment Air, water, noise pollution. Govt. has laws but it's businesses duty to enforce them Sponsorship for sporting activities
Arguments for CSR
Suzie
Loves
Playing
Dolls
Businesses must get involved in solving socio-economic problems cause if not it will have detrimental effects on the business and they have the expertise and resources to help therefore it’s their moral duty
Less likely to be enforced through legislation
Helps promote image and gain goodwill
Not only about good deeds but it’s about making a difference
Arguments against CSR
Peter Says Red Heads Eat Socks
Providing goods and services is seen as already doing CSR
Shareholders are the only real stakeholders as they invest financially
- business spending w/o real benefits
Employees are remunerated to how well business targets are met - distraction
Higher prices - inflation
Creates expectations
Not always sustainable - hit and run approach
Factors contributing to need of CSR in SA
I Promised David A Chocolate Egg Latte To Go
Inequalities of the past - education, illiterate adults, no skills
Difficult to break cycle of poverty
Dualistic economy - living in 3rd world circumstances
Years of apartheid - funds poured into political issues instead of economic issues
A culture of crime and violence - future generations need to break cycle
Effects of HIV/AIDS Epidemic - families w/o adults
Limited water supply and concentration of natural resources - concentration of population in smaller areas - strain on resources
Technological advancements - automated jobs, need qualifications
The global village phenomenon - increased imports = cheaper to import than produce. Pressure on govt. to increase import levies to protect jobs.
Poverty
Having little or no money and few material possessions
Corporate Governance
Set of rules and processes used by top management to direct and control the business
Provides a framework and control measures to look after the bottom line of the business as well as stakeholders
King code 1
Introduce TBL as a company mustn’t just focus on BL
King Code 2
Principles of Corporate Governance
Transparency Accountability Independence Discipline Fairness Responsibility (of Directors)
King Code 2
Principles of Corporate Governance
Transparency
Decisions being taken into account with a set of rules which everyone is familiar with and understands
King Code 2
Principles of Corporate Governance
Accountability
Taking responsibility for your actions
Increases level of confidence in stakeholders
