Corporate Social Responsibility Flashcards
What is the difference between Shareholder Capitalism and Stakeholder Capitalism?
Shareholder Capitalism is when the key stakeholders are the company shareholders. The social responsibility of the business is to increase profit where short-term profit maximization is the highest good.
Stakeholder Capitalism is when all stakeholders matter equally. Society’s goal is to increase the well-being of people and the planet. It focuses on long-term value creation and ESG measures.
The main difference, therefore, is that shareholder capitalism focuses on shareholders whereas stakeholder capitalism is an inclusive approach to customers, employees, suppliers, communities, and shareholders.
Why is Creating Shared Value (CSV) an opportunity for businesses?
Shared value strategies simultaneously create value for the business and for society. Meeting societal needs will expand opportunities for the business and the business can achieve competitive differentiation which all lead to making a profit in return. CSV has a scalable societal impact because the shared value is sustaining.
How does CSV differ from CSR?
CSR focus on compliance with ethical and community standards whereas CSV moves beyond CSR by addressing societal needs and challenges through the business itself.
Why is CSV increasingly a business imperative?
Because of its legitimacy: Creating value “at the expense of”. Moreover, big societal issues are so complex that they require expertise and scalable business models.
What is collective impact and why is this important for a company?
Collective impact is the commitment of a group of companies to a common agenda for solving a specific social problem, using a structured form of collaboration.
What are the 5 key conditions for success in driving collective impact?
Common agenda: shared vision. Shared measurement system. Mutually reinforcing activities. Constant communication. Dedicated backbone support.
Why is system leadership important when creating shared value?
Help others in the coalition to understand how the health of the whole system benefits each party? (close loop).
Why is CSV difficult and why do businesses miss the opportunity?
Legitimacy and importance of trust.
Competitive free riders.
Justification of investment: Expertise in botch societal and business issues is required, long-term commitment is needed, and ring-fenced budgets are required.
Why do we need ‘responsible leadership’?
There is a need for a multilevel response to deficiencies in existing leadership frameworks and – theories.
What are the key elements in responsible leadership?
- Respect, honesty, responsibility, accountability, morality, trust, driven by ethical principles.
- Compassion towards rest of society: social responsibility.
- Multi-stakeholder approach.
What is the definition of Responsible leadership?
Responsible leaders build and cultivate sustainable relationships with stakeholders to achieve mutually shared objectives based upon a vision of business as a force of good for the many.
How should you choose which causes to influence when engaging in CSR?
Gather info: Stakeholder groups, norms, and issues. What is our impact on them?
Share info: Throughout the organization.
Respond: New programs, facilities, measure impact and communicate is.
How can you do CSR right?
Communicate your CSR effectively. Moreover, communicate shared concern for the issue, and stimulate interaction between stakeholders as awareness is generally low. Try to get people to talk about it, the company as a source promotes skepticism.
How can you minimize skepticism?
- Intrinsic versus extrinsic motivation. It’s okay to show you have both.
- There is less skepticism if you talk about your product (vs. just the cause).
What is greenwashing?
Conveying a false impression or providing misleading information about how a company’s products are environmentally sound.
