Lecture 9 - Corporate Social Responsibility Flashcards
Define Corporate Social Responsibility
A firms consideration of and response to issues beyond the narrow economic, technical and legal requirements of the firm to accomplish social benefits as well.
Define Triple Bottomline
The economic, social and environmental performance that satisfies the demand of all stakeholder groups
Define Stakeholders and mention 4 primary, 2 primary-ish and 4 secondary
= Any group or individual who can affect or is affected by the achievement of the organization’s objectives
Primary = the firm relies on those for its survival
1) Shareholders
2) Employees
3) Costumers
4) Suppliers
1) Governments
2) Communities
Secondary: Influenced and affected but not engaged in transactions or essential for the firms survival
1) Trade Unions
2) Social groups
3) Industry associations
4) Environmental groups
Mention and define the 3 views on why Stakeholders matter
1) Instrumental view:
-Treating stakeholders well may indirectly help financial performance
2) Normative view:
-Firms ought to be self-motivated to ‘do it right’ because they have societal obligations
3) Shared value creation
-An approach that focuses on activities that are good for both the firm and its stakeholders
Mention 3 examples of Shared Value Creation
1) Firms can design new products or business models to serve unmet needs in the community while earning profits on it
2) Firms can modify their business practices to increase benefits for external stakeholders
3) Initiatives can be launched to create value for a local community while indirectly creating value for the company by enhancing the reputation.
Mention 2 pressures on MNEs to lower standards and 4 to raise standards
Lower:
1) Lowering cost by standards arbitrage, i.e. producing where regulations impose least costs.
2) Using the threat of relocation to prevent governments from raising legal requirements
Raise:
1) Closer monitoring by stakeholders at home and abroad
2) Scale advantages of common practices and standards throughout the organization
3) Opportunities for first-mover advantages in new technologies and practices
4) Lower risk of catastrophic disruptions
Mention 3 reasons why companies introduces Codes of Conducts?
1) To comply with legal obligations
2) To reduce the risk of costly accidents
3) To demonstrate their social and environmental sustainability
Define Compliance
Comes with the Codes of Conduct.
A set of monitoring and enforcement procedures designed to assure that everyone meets the standards.
Which view tend the Liberal Market Economies LMEs to have on sustainability and which kind of CSR will we see
= Instrumental view
The firm has legal duties towards its shareholders - maximization of profits
Mainly explicit CSR
Which view tend the Coordinated Market Economies CMEs to have on sustainability and which kind of CSR will we see
Firms will still act in the interest of shareholders but within the constraints imposed on them by formal and informal institutions.
Implicit CSR
Mention and define 4 strategic responses to ethical challenges
1) Reactive:
Denial is first line of defense. Deny responsibility, do less than required.
2) Defensive:
Admit responsibility but fight it, do the least that is required.
3) Accommodative:
Accept responsibility, do all that is required.
4) Proactive:
Anticipate responsibility, do more than is required.
Define Hypernorms and mention the 3 defined by Donaldson
= Norms considered valid anywhere in the world.
1) Respect for human dignity
2) Respect for universal basic rights
3) Good citizenship in the host society, respecting their institutional context
