CSR Flashcards
What is Earth Overshoot Day? How is it related to CSR?
Earth Overshoot Day is the day that we’ve used the yearly production of our natural resources (in 2022 it was August). It is earlier every year.
We are overusing earth’s natural resources –> most activities using these resources are corporates –> there is a responsibility to do something.
Industrialized/developed counties have the largest impact.
What is the rule of thumb for all CSR and business ethics activities?
Do no harm … this is too optimistic:
Reduce harmful practices, make positive changes to existing system
What did we learn from the Apple/Foxconn example?
Apple/Foxconn is an historical example that highlights what stemmed CSR.
Foxconn B2B company produce tech required to assemble Apple B2C business.
Foxconn’s workers committed many suicides (harassing onsite/poor conditions)
Apple was the 1st mover in introducing a supplier report in addition to GRI
NGOs (like SACOM) exposed that despite of promises to change, poor working conditions remained, called on more improvements for for Apple to improve communication and be more transparent with the steps they are taking to consumers.
CSR is big marketing opportunity/ could cause issues as the media love to report on corp. scandals (curse of the iPhone, etc)
Scandals come with a price (drop in stock price), but investors like the CSR report with what they plan to do (stock price rises)
In the end, CSR and responsibility increased the working standards, and workers lost job as a result of CSR, as foxconn had to cut costs, moved manufacturing to Brazil with robots.
What is the difference between explicit and implicit CSR?
Explicit CSR: dedicated CSR departments/team
Implicit CSR: notion that corporations in Europe were already including CSR elements now used in explicit CSR
What are the CSR issues?
All are related to KPI that can be actively managed:
- Poverty
-Human Rights (International Labor Law)
- Education
- Health
- Political Participation
- Civil Society Participation (values, wellbeing, free market)
- Environment
- Ecological Disasters
What are some other concepts that are similar to CSR?
Corporate Citizenship: corporations are citizens, w/ duties and rights
Sustainability (seeing some backlash, but growing urgency)
Triple Bottom Line (bottom line = profit, CSR: profit, environment, social) Only if all three are achieved can we reach sustainability.
Creating Shared Value
Business Ethics
Environmental Management
What are the 3 approaches of CSR?
Marketing –> strategic. some use CSR to increase W2P. Then will only use/prioritize marketing.
Instrumental (critizisms: synonymous with profit maximization, a facade of morally corrupt corporations)
Risk and Reputation Management –> risk for media attention, legal cases and civil society engagement.
Why do we create a legal entity w/ limited liability?
Natural persons are held liable for their actions. A corporation a contract, legal entity. If they don’t go bankrupt, they technically live forever. A legal contract as foundation of corporation, it comes with a removal of responsibilities/ limited liabilities.
They are not held liable because it:
- Allows for flexibility
- To take more risks (the key)
- Allows for sharing responsibilities on many different shoulders
With more risk, there is more innovation, more capital
Corporations helped establish modern economy based on risk/gain.
What is stakeholder theory? What is it good for?
A shift from shareholder (focus on profits) –> stakeholders.
Corporations have grown incredibly powerful/big: we’re now discussing how to make them socially responsible.
Theory is good for:
1. understanding and managing a business in 21st century
2. putting together thinking about questions of ethics, responsibility, and sustainability with usual economic view
3. understanding what to teach managers + students
We look at the more complex model of stakeholder theory; where:
-primary stakeholders are the inner circle (not more important, just closer)
- secondary stakeholders are not as immediate (include: government (regulation), competitors, consumer advocate groups, special interest groups (NGOs, churches, unions), media)
Some companies, (like example of Nordisk), puts the ppl they serve at middle of map, rather than the company.
What is greenwashing?
“Green washing measures the extent to which firms are willing to jump on the CSR bandwagon and mislead customers in hope of financial gain.”
Greenwashing is not an upfront lie, it is something misleading, in the grey zone.
“Green washing as co-creation of an external accusation toward an organization with regard to presenting a misleading green message”
If no one complains, they keep doing it, and eventually the paradigm shifts. Audience accepts the message.
What is the Green Peace Greenwashing Criteria?
o Dirty Business: touting an environmental product/program, while business is polluting
o Ad Bluster: spending a lot of advertising/PR to exaggerate an environmental achievement (spend more to publicize vs the help itself)
o Political Spin: advertising green commitments while lobbying against environmental policies
o It’s the Law, Stupid!: Publishing reports that sound positive, but are based on requirements / law that all comply too.
What does greenwashing have to do with finances? What is the 2x2 matrix of greenwashing cases?
If you greenwash: decreased financial performance.
If you take action, there is no impact/ no reward.
What is important about supply chain management?
This is where there are issues/ where CSR can be managed.
procurement is all input into the company, everything you buy. the ingredients.
What are the 4 dimensions of CSR and supply chain responsibility?
- Corporate History: Makes a difference where the company is coming from. Founder/family run company driven by values is part of the history. How the company acted in historical moments/scandals. (and how they dealt with it later on).
- Firm specific assets: patents, products, highly trained set of ees, what do they bring into the supply chain. supply train itself is also an asset. Lots of tracking here: sensors/surveillance
- Knowledge enhancing: training ees, industry standards, collabs, consultants. This is the managerial dimension.
- Knowledge controlling: operations tracking would be part of controlling. Managerial dimension.
You look at these 4 dimensions to see where to promote CSR.
How does procurement fit into CSR?
Procurement is part of the supply chain, where we can make an impact on CSR initiatives.
You could use an exclusion mechanism w/o regulation (as CSR is mostly self regulation): make a policy that the suppliers you work with must meet your standards.
Procurement is one of the most POWERFUL leverages; it is where the money is spent. There is transformative power in industry standards, through stakeholder pressure.
What is included in some purchasing social responsibility?
Purchasing Social Responsibility, is part of the procurement process. Some dimensions include:
- Environmental purchasing
- Sourcing from minority-owned suppliers
-Human rights
-Safety - Philanthropy issues relating to supply management
Public organizations can regulate themselves; what they are buying. In past it may have been cheapest, but new legislation in CH is being introduced allowing for CSR. Public procurement in CH is 7 billion CHF. There are organizations in CH (Federal Consumer Affairs Bureau or Foundation for consumer protection) that are present to represent collective interests of consumers: safety and price.
Why are theories important?
Theory is important because it allows us to use a more distant lens to approach something, with a scientific research method. It allows us a lens/pair of glasses, a plausible interpretation to what may happen. Ethical/Strategic/Political CSR are all a lens/ an academic construct or approach to CSR.
What is Ethical CSR?
Ethical CSR is aspirational: it looks at CSR through moral standards, in order to determine our ethical responsibilities.
4 ethical values we discussed are:
- Trustworthiness: this reduces transaction costs. Criticism: difficult to resolve conflicting loyalties. Example; dishonesty: lack of full disclosure of harmful impacts (tobacco industry deception)
- Caring: avoid unnecessary harm, sensitive to others. Criticism: difficult to establish what constitutes unnecessary harm.
Example; not avoiding harm: failure to recall unsafe vehicle - Responsibility: accountable for actions, accept fault, apologize. Criticism: taking full responsibility leads to lawsuits. Example: Not accepting fault: blaming suppliers for faulty product and failing to take steps to fix problem.
- Citizenship: obey law, assist community, protect natural environment. Criticisms: could lead to abiding by unethical laws. Example: being a good corporate citizen: engaging in recycling, community assistance, or fair trade.
W2P doesn’t go up with this approach. It is a broad/big picture way to look at CSR.
What is strategic CSR?
Strategic CSR is a lens in which CSR is part of a competitive strategy: what can CSR do for me?
Interdependent relationship of the firm, its strategy and its stakeholders. Benefits to brand value.
This is related to the 5 environmental forces of CSR (growing affluence, ecological sustainability, globalization, communication technology, brands).
CSR is action oriented projects; that need to strengthen the corporation’s operations. (This is why you do it).
Is CSR a cost or opportunity?
In strategic CSR, it can be a point of differentiation (therefore increases W2P)
Could be misused = green washing
What is the Strategic CSR Model?
Strategic CSR objectives need to strengthen corporate operations.
Corporate success assumes that strategy matches internal competencies with the external environment (stakeholders expectations), within mission and vision.
What is the decision tree for boundary setting?
The decision tree for boundary setting is part of GRI. It helps companies identify what they should report on and how.
What is corporate digital responsibility?
Corporate Digital Responsibility is a new concept, taking into consideration that new social issues and increased responsibilities for corporations arise in the digital age.
Perceived opportunities:
- social inclusions
- efficiency in public service delivery
-operational efficiency
- business opportunities and employment generation (like crowd funding, cloud solutions, efficient cross-border trade)
Perceived threats:
- workforce disruption (automation, new skills needed)
- cybercrimes
- data privacy issues
-social engineering and media manipulation
