***Week 3 - The Business Case

Question 1

Why should businesses engage?

Answer 1

• UN Global Compact - Accenture 2013 survey of 1,000 CEO’s across 27 Industries and 103 countries
• 67% businesses no doing enough address global sustainability challenges
• 63% expect sustainability to transform their industry within 5 years
• 76% believe embedding sustainability into core business will drive revenue growth and new opportunities

Question 2

Measures of Business performance

Answer 2

• Shareholder value (way firm viewed)
• Revenue (greater market share - image)
• Operational efficiency (cheaper)
• Access to capital (rest money)
• Brand value and reputation
• Human capital (best people)
• Risk management
• Innovation

Question 3

Business case - Kurucz et al 2008

Answer 3

1) Cost & Risk reduction
2) Comp advantage
3) Reputation
4) Win-Win Outcome

Question 4

1) Cost & Risk reduction

Answer 4

1) Diversity reduce employee turnover
2) Min envir impact beyond law reduce cost, suits/operational costs
3) Improve working conditions supply chain improve quality and reduce returns

Question 5

2) Gaining Competitive Advantage

Answer 5

1) differentiate (body shop animal testing)
2) brand loyalty Privto et al 2008
3) Strengthen relationships current future clients
4) Drive technological and product innovation

Question 6

3) Developing reputation & legitimacy

Answer 6

1) strengthen license to operate
2) publicised charitable giving to social courses (social and finance goals are not in conflict) Carroll & Shabana, 2010 vote where make charity donations
3) avoid brand damage

Question 7

4) Win-Win Outcomes Through Synergistic Value Creation

Answer 7

1) pursuing a win-win where social problems addressed by business and turned into business opportunities Carroll & Shabana 2010)

Question 8

7 Business Benefits (The doughty Centre & Business in the community 2011)

Answer 8

1) Brand value and reputation
2) Employees and Future workforce (timpsons, open hiring ex criminals)
3) Operational Effectiveness
4) Risk Reduction & Management
5) Direct financial impact
6) Organisational growth
7) Business Opportunity

Question 9

CSP-CFP link

social

Answer 9

• found (+ - neutral) Carroll & Shabana 2010)
• meta analysis support (+) relationship Orlitzy, et al, 2003
• recent study little support, managers attempt mask low financial performance by greater CSR expenditure Schreck, 2011

Question 10

CEP-CFP link

environmental

Answer 10

• recent meta analysis small (+) lower environmental impacts are associated with improved efficiency, reduced costs and increased revenue, Endrikat, Guenther and Hoppe’s 2014

Question 11

Limitations of the Business Case

Answer 11

• limit to financial gain from CSR, “pays to be good but not too good” Mintzberg 2983, p10
• often reliant upon customers recognising CSR
• how CFP-CSP, other way round not looked at

Question 12

Is it ethical to pursue corporate social responsibility?

Answer 12

1) Does the business case matter
2) DO we even need to establish a business case for CSR
3) Do organisations have a greater responsibility to their shareholders or to wider society
4) Are organisations ethically obliged to engage in CSR even if there is no direct return or a cost

Question 13

Additional reading - the business case

Answer 13

1) researches often argue that csr can improve the competitiveness of a company (Burke & Logsdon 1996)
2) They hypothesise that R&D and and CSP are positively correlated, since many aspects of CSR create either a product innovation, a process innovation, or both ( McWilliams A et al, 2000)
3) child works found in clothing supply chain ASOS (Webb J, 2016, Forbes) but now do a lot for CSR