Lecture 7: Sustainability Motivations and the business case

Question 1

What are the different levels of analysis for sustainability?

Answer 1

• Individual (mindset)
• Organisation (strategy)
• Society (stakeholder)

Question 2

What are the personal drivers of sustainability?

Answer 2

I must
I want
I can
We can

Question 3

Where are the biggest perception gaps?

Answer 3

• Transparency
• Combating child labour
• Fair trade

Question 4

Where are the smallest perception gaps?

Answer 4

• Safety
• Animal welfare
• Clean environment

Question 5

Define what a business case is

Answer 5

A business case captures the reasoning of starting a project

Question 6

What are five arguments against CSR?

Answer 6

1. Friedman: maximize profits is sole responsibility
2. Business is not equipped to do so
3. Business already has enough power
4. Lowers compettitivness
5. Dilutes from primary purpose

Question 7

What are five argument in favor of CSR?

Answer 7

1. In businesses long term interest
2. Ward off government regulation
3. Business has the resources
4. Pro-acting is better than reacting
5. Strong public support for business taking up CSR

Question 8

What are five argument in favor of CSR?

Answer 8

1. In businesses long term interest
2. Ward off government regulation
3. Business has the resources
4. Pro-acting is better than reacting
5. Strong public support for business taking up CSR

Question 9

Want are the components of the CSR business case?

Answer 9

1. Legal - required
2. Ethical - expected
3. Discretionary - desired

Question 10

Four business case arguments for CSR

Answer 10

1. Cost and risk reduction
2. Gaining competitive advantage
3. Developing reputation and legitimation
4. Win-win outcomes

Question 11

What is CSR for each of the four phases?

Answer 11

1. Corporate self responsibility
2. Corporate social responsiveness
3. Corporate social responsibility
4. Corporate societal responsibility

Question 12

What are the three tipping points in CSR process?

Answer 12

1. Trigger event
2. Internal alignment
3. External alignment

Question 13

What is the agency problem?

Answer 13

The separation between decision making and being exposed to the consequences of these decisions

Question 14

What are the two mechanisms to battle agency cost?

Answer 14

Bonding

Monitoring

Question 15

What is fiduciary duty?

Answer 15

The extent that a manager of an organization acts in the interest and benefits of another actor

Question 16

What is the narrow and broad definition of fiduciary duty?

Answer 16

Narrow: agency relationship between a capital provider and manager
Broad: Relates to the relationship between society as a whole and the management of a company

Question 17

What are the four interfaces in the institutional spheres diagram?

Answer 17

1. Government vs non government
2. Profit vs non profit
3. Public vs private
4. Public good vs private good