midterm Flashcards
CSR definition
Corporations have certain responsibilities to society beyond their economic and legal obligations
A view of the corporation and its role in society that assumes a responsibility among firms to pursue goals in addition to profit maximization and a responsibility among a firms stakeholders to hold the firm accountable for its actions
Moral argument for CSR
The relationship/interdependence between a company and the wider society within which it operates
Rational argument for CSR
Businesses seek to maximize their performance by minimizing restrictions on operations.
Economic argument for CSR
Competitive advantage in the market
Five trends/forces that propel CSR
o Affluence o Globalization o Ecological Sustainability o Free Flow of Information o Branding
Affluence
Consumers can afford to pick and choose the products they buy and expect more from the companies whose products they buy. Firms operating in affluent societies face a higher burden to demonstrate why they are socially responsible
Sustainability
growing concerns for the environment
Globalization
Some firms operate in multiple countries, which increases the amount of stakeholders. Firms have the risk of being exposed to a global audience if they make mistakes
Free flow of information
Growing influence of social media makes sure that any CSR lapses are brought rapidly to the attention of the worldwide public
Brands
Importance of reputation and brands.
Friedman’s argument against CSR
The only social responsibility of a business is to increase its profits
CSR is a waste of Capitalism
CSR is against capitalism
Vision
Answers why the organization exists
Mission
Answers what the org is going to do to achieve its vision
Strategy
Answers how the organization is going to undertake its mission
Tactics
Determines who, when and where the strategy will be implemented
Prahalad’s Perspective to creating competitive advantage
The resource perspective. A firm’s set of core competencies differentiate from its competition and allows it to sustain competitive advantages
Porter’s perspective to creating competitive advantage
The industry perspective focuses on the firm’s operating environment as the most important determinant of competitive advantage. (very competitive)
5 competitive forces in porters model
- suppliers
- new entrants
- industry rivalry
- buyers
- substitutes
Stakeholder perspective on strategy
Enables firms to respond to the dominant trends in society (globalization, rapid communication, increasing social expectations)
Stakeholder
Any group or individual who can affect or is affected by the achievement of the organization’s objections
Four key components of the definition of strategic CSR
- Firms incorporate a CSR perspective within their strategic planning process
- Any actions they take are directly related to core operations
- They incorporate a stakeholder perspective
- They shift from short term perspective to managing the firm’s resources and relations with key stakeholders over the medium to long term.
Four key components of the definition of strategic CSR
- Firms incorporate a CSR perspective within their strategic planning process
- Any actions they take are directly related to core operations
- They incorporate a stakeholder perspective
- They shift from short term perspective to managing the firm’s resources and relations with key stakeholders over the medium to long term.
Stakeholder advocacy
Promotes CSR behavior when advocates represent rational or economic motives for the firm
CSR Deficit
The extent to which perceived image differs from societal expectations. CSR deficits suggest a gap between the expectations of the firm’s stakeholder (both internal and external) and what the firm delivers
Strategic CSR Window of Opportunity
The range of firm behavior that generates both economic and social value in sufficient quantities
CSR Filter
Is a conceptual screen, through which strategic and tactical decisions are evaluated for their impact on the firm’s various stakeholders.
Capabilities
actions that a firm can do, such as pay its bills, in ways that add value to the production process
Competencies
actions a firm can do very well
Core competencies
Actions a firm does very well but it is so superior at performing these activities that it is difficult (or at least time consuming) for other firms to match its performance in this area
Make or buy analysis
Strategically, firms can often buy the competencies or capabilities they need especially when doing so is faster or less expensive. A csr competency however, must be developed within the firm and serves as a screen through which the impact of strategic decisions can be evaluated
Business strategy
The strategy of a specific business unit within a firm that enables it to differentiate its products from the products of other firms on the basis of price or other factors (such as superior technology)
Strategy and structure relationship
The organizational design that exists to support the strategy of the firm
CSR as brand insurance
Defensive CSR. CSR still has value for a company, primarily by avoiding criticism and other attacks on the firm or its offerings.
CSR threshold
A CSR point of no return. The sooner the CSR is introduced, the less likely a firm is to cross this tipping point. the tipping point that triggers firms to move forward with strategic CSR
5 Stages of CSR learning
Defensive: To deny responsibility
Compliance: To do the minimum required
Managerial: Begin integrating CSR into management practices
Strategic: To embed CSR within the strategy planning process
Civil: To promote CSR practices industry-wide
Implementation of CSR
o Short to medium term: From the top down with sincere commitment
o Medium to long term: Stakeholder involvement, manage the message, corporate governance, corporate activism
o Embedding CSR:
o The importance of action for CSR implementation:
P&K Competitive advantage
Conditions that allow an organization to produce a good or service due to a specific edge over competitors.
P&K How to prioritize issues
a. Generic Issues (Not affected by company’s operations)
b. Value Chain Impact (Affected by company’s operations)
c. Social Dimension (Effect the drivers of competiveness)
P&K Inside Out CSR
impact a company has on society through the normal course of business
P&K Outside In
external social conditions that may affect an organisation
Porter: Creating Shared Value
Creating economic value in a way that also creates value for society by addressing its needs and challenges
Difference between CSV and CSR
Focus that societal and not economic needs define markets
3 ways companies can create CSV opportunities
a. Deeper understanding/appreciation of societal needs
b. Understanding of the true bases of company productivity
c. Collaborate across profit/non profit boundaries
Jong&Meer Three basic types of motives for engaging CSR
a. Intrinsic Motives
b. Extrinsic Motives
c. Societal Expectation/Pressure
Jong&Meer 2 levels of csr fit
High fit and low fit (level of congruence between issue ad company)
Jong and Meer 6 types of fit
a. Products and services
b. Production process
c. Environmental impact
d. Employees
e. Suppliers
f. Geographical location
Bhattacharya: The four challenges of using CSR as an internal marketing lever
a. Employees lack awareness and involvement in CSR
b. Limited understanding of employee needs
c. Poor understanding of employee returns to CSR
d. Top Down Approach to CSR
Bhattacharya: The five steps to optimize CSR for effective employee relations.
a. Increase employee proximity to CSR
b. Use contingent input-output approach to make CSR decisions
c. Understanding and fulfilling employee needs
d. Strengthen employee identification
e. Involve employees I co-creating CSR value
Ragas: Brand personality
Attributing human elements in describing/categorizing brands
Ragas:Brand community
Connection to a brand through identity and culture
