Vorlesung Kick Off

Question 1

CSR definition (European Commission) + goals

Answer 1

European Commission: Enterprises should have a process in place to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close cooperation with their stakeholders. The aim is:

• To maximize the creation of shared value, which means to create returns on investment for the company’s shareholders at the same time as ensuring benefits for the company’s other stakeholders.
• To identify, prevent and mitigate possible negative impacts which enterprises may have on society.

Question 2

Sustainable Development

Answer 2

Sustainable Development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

3 parts: environment, economy, society

Question 3

Caroll’s 4 part definition of CSR: description + pyramid

Answer 3

Social responsibility consists of 4 components that, when taken together, define what businesses should do. They are not mutually exclusive (schließen sich nicht gegenseitig aus) and are to be treated separately and might overlap to some extent.

Question 4

Economic Responsibilities

Answer 4

To be profitable as a company, minimize cost and maximize sales are at the base of economic responsibilities. Economic performance is the foundation upon which all others rest and is required by the society.

Make a profit consistent with expectations for international businesses;

Question 5

Legal Responsibilities:

Answer 5

It is also required by society to obey the law, because the law mirrors what the country’s society regards as right or wrong. May be different from country to country.

Obey the law of host countries as well as international law;

Question 6

ethical responsibilities

Answer 6

The ethical responsibilities are not required but expected by society. Ethical responsibilities embrace those activities that are expected or prohibited by society even though they may not be codified into law. To assert ethical leadership, avoid questionable practices or operate above the minimum standard of the law could be examples for the ethical responsibilities.

To what is right, just and fair. Avoid harm.

Be ethical in its practices, taking host-country and global standards into consideration;

Question 7

Philanthropic Responsibilities:

Answer 7

To be a good corporate citizen and improve the quality of life for the society is the aim of these responsibilities. Corporate contributions, to support the community by providing programs or engagement in volunteerism can be examples for the philanthropic responsibilities. To some extent the philanthropic responsibilities are desired and expected by the country’s (!) society.

Be a good corporate citizen, especially as defined by the host country’s expectations.

Question 8

Milton Friedman’s provocative point of view (1970) on Shareholder Value and Social Responsibility

Answer 8

• Social responsibility: it means that the company acts in some way that is not in the interest of its employees
• E.g. at the expense of corporate profits, you hire unemployed instead of better qualified workers to reduce poverty
  
  • -> Social responsibility reduces returns of stockholders
  • -> Stockholders interest: make as much money as possible while conforming to the basic rules of the society
• Corporate Social Responsibility: “only people can have responsibilities”
  
  • -> A manager should maximize the Shareholder Value. Shareholders can decide on their own to be socially responsible or not

Question 9

Share Value (CSV) definition

Answer 9

The concept of shared value can be defined as practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.

create returns on investment for the company’s shareholders at the same time as ensuring benefits for the company’s other stakeholders.

Put simply: Value creation for all stakeholders (including the company and its shareholders) at the same time!!

Opposing to CSR models where positive effects for the company through CSR are seen as greenwashing

Question 10

How CSV is different from CSR (text)

Answer 10

Creating shared value (CSV) should supersede corporate social responsibility (CSR) in guiding the investments of companies in their communities. CSR programs focus mostly on reputation and have only a limited connection to the business, making them hard to justify and maintain over the long run. In contrast, CSV is integral to a company’s profitability and competitive position. It leverages the unique resources and expertise of the company to create.

Question 11

How CSV is different from CSR (table, 6 differences + example)

Answer 11

CSR:

• value: doing good
• citizenship, philanthropy, sustainability
• in response to external pressure
• separate from profit maximization
• agenda is determined by external reporting
• Impact limited by corporate footprint and CSR budget
  e. g. buying fair trade

CSV:

• value: economic and societal benefits
• joint company and community value creation
• integral to competing
• integral to profit maximization
• agenda is company specific
• realigns the entire company budget
  e. g. transforming procurement to increase quality