Chapter 6 Flashcards
the idea that businesses should operate
according to principles and policies that
make a positive impact on society and the
environment.
Corporate social responsibility (CSR)
the idea that businesses should operate
according to principles and policies that
make a positive impact on society and the
environment.
Corporate social responsibility (CSR)
a business
model used by companies to enhance
society and the environment through
concerted efforts.
Corporate social responsibility
NEED FOR SOCIAL RESPONSIBILITY
• CHANGING EXPECTATIONS
• REPUTATION
• AVOIDANCE OF GOVERNMENT
INTERFERENCE
• LONG-TERM SELF-INTEREST
• CONTRIBUTION TO SOCIAL PROBLEM
• BETTER ENVIRONMENT FOR BUSINESS
• GROWTH OF CONSUMERS
• OPTIMUM UTILIZATION OF RESOURCES
CSR was officially introduced in the early _____ through American
economist and educator __________ he paved the way for
the succeeding, academic research and management practice of
CSR.
1950’s
Howard Bowen
FOUR TYPES OF CORPORATE SOCIAL
RESPONSIBLITIES
- Economic responsibility (make profits)
- Legal responsibility (follow laws)
- Ethical responsibility (be fair)
- Philanthropic responsibility (be charitable).
In _____ researcher ____________ came up with a ‘pyramid of
corporate social responsibility. His pyramid included the four
components of CSR
1991
Archie B. Carroll
1.Economic responsibilities
• Forming the base of the pyramid is your economic responsibility.
• This is about ensuring that your organization remains profitable and financially transparent.
Responsibilities in this slice of the pyramid should include:
• Keeping your costs to a minimum.
• Maximizing income.
• Invest in developing and growing the business in the long term.
• Ensuring financial risks are managed correctly.
• Providing a return to owners and/or shareholders.
• Being economically responsible enables you to create and sustain jobs in the community,
and contribute useful, non-harmful products and services to society.
2.Legal Responsibilities
• This is also straightforward and a minimum requirement for all businesses: to obey the law.
Responsibilities covered by this area of the pyramid entail:
• Being truthful and transparent about the safety and security of the products or services
you sell. ( Do not commit to deceptive product practices)
• Keeping your employees and customers safe.
• Ensuring that you meet environmental, health, and safety requirements.
• Paying taxes.
• Paying mandatory employee benefits.
This extends your obligations to doing what is right and fair, even if it’s not required by law. To
attend to this responsibility, you’ll need the “moral” outlook that Carroll refers to.
• An example would be avoiding structuring your company so that it pays little or no taxes,
even if that would be allowed by the letter of the law.
• Making your product safely and efficiently
• Selling it at a fair price,
• Treating your people well.
• Changing product recipes for example if that product is a food item that has a lot of sugar
in it.
• Offering fair working conditions for employees, both of the business itself as well as its
suppliers.
• Honest business practices include equal pay for equal work and compensation initiatives.
• An example of ethical business practices is the use of products which have fair-trade
certification. Ben & Jerry’s, for instance, only uses fair-trade certified ingredients, such sugar,
coffee, bananas, and vanilla.
Ethical Responsibilities
• This is the highest level of responsibility and goes beyond any legal or regulatory
expectations. It’s about being a “good corporate citizen,” actively improving the world
around you.
Examples of philanthropic CSR would be:
• Enabling team members to take part in volunteering programs during work time.
• Sponsoring community initiatives.
• Offering mentoring expertise to nonprofits.
• Entering into community or charitable partnerships.
• Donating to charity, and offering employee donation-match schemes.
• Tackling wider global issues, such as poverty, climate change, racism, or gender
inequality.
Philanthropic Responsibilities
