Corportae Social Responsibility Flashcards
What is the definition of CSR
occurs when a corporation fulfills its various responsibilities (economic, legal, social, ethical, philanthropic) in its operations so as to address both S/H and other stakeholders expectations
what are the key elements to CSR
- corps. have responsiblities beyond producing goods/services
- involve helping address/solve social problems
- corps. have wider constituency than just S/H
- corps. have impacts beyond simple marketplace transactions
- corps. serve wider range of human values than just economic
Describe Archie Carroll’s Pyramid of CSR
Phil (good corp. citizen), then ethical (be ethical), legal (obey the law), economic (be profitable)
*ethical custom - milton friedman
Pyramid
-voluntary acceptance by business corps. of responsibilities to their stakeholders in addition to their 1. economic (profits) and 2. legal responsibilities
What does it mean to have ethical responsibilities?
- operate above min. behaviour by law
- avoid questionable business practices
- follow both spirit and letters of law
- respect others rights and do what is fair
- refuse to deal with unethical customers & suppliers
- refuse to take advantage of lax environ., labour, health and safety, standards
What does it mean to have Philanthropic resp.?
- be a good corporate citizen
- improve community
- assist education, health services, arts/culture, human welfare
- facilitate voluntarism among employees
- simultaneously
Why be involved in CSR?
- helps balance business power with resp. (otherwise as the “iron law of responsibility” suggests, abuse power leads to eventual loss of power ex. joel Bakan
- discourage gov. regulation
- business os part of a larger system “society”
- businesses are interdependent on & invulnerable to changes in other parts of this system
- business need to respond cuz stakeholders are more organized
- business need “social license to operate” - promotes long-term profits for business - ex. donations, taxes
- good public image (friedman says if corp. looks good then okay)
- some social problems are business opp.
- should view CSR from the long-term
- generates goodwill for business
- business has the resources/ “let business try”
- have leadership expertise
- financial resources
- can fill in gaps when gov. doesn’t act - better to be proactive then reactive - preempt problems
- social capitalism ex. patagonia outdoor clothing
- corrects social problems caused by business - voluntarily compensate society for harms done to it
what are the counter arguments against CSR?
- profit maximization is the purpose of business (friedmans main point), economic
- responsible to S/H - not legitimate for managers to do CSR, let owners decide
- business lacks mandate
- business lacks skills
- business has enough power already, don’t give it an additional role
- lowers economic efficiency & profits (harms society by diverting scarce resources away from optimal use)
- no clear CSR standards (*exception: Benefit Corporation/B corp)
- hard to hold business accountable (gov., maybe interest groups)
- only divided/mixed support exists for CSR among businesses
- higher costs of CSR-firms penalizes them relative to competitors (ex. firms that outsource do better than firms that don’t)
- imposes hidden costs.passes them onto stakeholders
- places responsibility on business rather than individuals
- business uses CSR only as a public relations tool (friedman agrees with joel bakan that CSR is an attempt by business to escape gov. regulation
What are the 3 perspectives on CSR?
- amoral: traditional view of business (profit-making entities - friendman)
- personal: corps. are like ppl and can therefore be held accountable for their actions (implicit view in gov. regulations
- social: corps. are social institutions (held by some executives that are very visible and prominent)
What is a strategic philanthropy ex?
Cisco systems! yay! created networking academy to train and certify admin.’s throughout world alleviating a potential constraint while providing job opp. to highschool graduates
They target economically underdeveloped parts of the US and sometimes developing countries
