Social Responsibility Framework

1
CHAPTER 1

• Social Responsibility Framework

2
Chapter Objectives

• To define the concept of social responsibility
• To trace the development of social responsibility
• To examine the global nature of social
  responsibility
• To discuss the benefits of social responsibility
• To discuss the framework for understanding social
  responsibility

3

• What do you believe organizations should be
  responsible for accomplishing?

4
Social Responsibility Defined

• The adoption by a business of a strategic focus
  for fulfilling the economic, legal, ethical and
  philanthropic responsibilities expected of it by
  its stakeholders

5
Social Responsibility Defined (cont.)

• Businesses should look beyond their
  self-interests and recognize that they belong
  toa larger group that expects responsible
  participation.
• Applies to all types of businesses
• Adopts a strategic focus
• Fulfills societal expectations

6
Social Responsibility Defined (cont.)

• Economic responsibilities
• Legal responsibilities
• Ethical responsibilities
• Philanthropic responsibilities

7

• Who are the keystakeholders of the organization?

8
Social Responsibility Defined (cont.)

• Requires a stakeholder orientation
• Customers
• Employees
• Investors
• Stockholders
• Suppliers
• Government
• Communities

9
Stakeholders

• Those constituents who have a stake in, or claim
  on, some aspect of a companys products,
  operations, markets, industry, and outcomes

10
Lessons Learned from Economic Crises

• Transparency
• A long-term perspective
• Liquidity
• Limited use of derivatives
• Absence of rating triggers
• Minimal counter-party exposure
• Diversification

11
Global Nature of Social Responsibility

• Who determines social responsibility on a global
  scale?
• Host country
• Home country
• Outside organizations

12
Benefits of Social Responsibility

• Greater trust with stakeholders
• Greater customer satisfaction
• Stronger employee commitment
• Stronger investor loyalty
• Greater profitability
• Countries with greater trust-based institutions
  foster a productivity-enhancing environment.

13
Social Responsibility Builds Trust

• Trust is the glue that holds organizational
  relationships together.
• Stephen Covey contends that low trust results in
  organizational decay and relationship
  deterioration.

14
Social ResponsibilityStrengthens Employee
Commitment

• The greater a companys dedication to employees,
  the greater the likelihood that employees will
  take care of the organization.

15
What happens whenemployee loyalty is breached?

• Quality is compromised.
• Service is compromised.
• Efficiency decreases.

16
StrengtheningEmployee Commitment

• Employee stock ownership plans (ESOPs)
• Employee-centered programs

17
Social ResponsibilityContributes to Investor
Loyalty

• Investor relationships require dependability,
  trust, and commitment.
• Shareholders are concerned about ethics, social
  responsibility, and corporate reputation.
• Half of investors sell their stock within one
  year.

18
Social ResponsibilityEnhances Economic
Performance

• Economic well-being is promoted by
• Trust and a sense of community
• Rigor in the legal and ethical systems
• Consistent exercise of authority within society
• Social institutions that foster access,
  productivity and economic growth
• Positive attitudes about work, innovation,
  savings, and profits

19
Framework for Studying Social Responsibility

• Chapter 2
• Strategic Management of Stakeholder Relationships
• Chapter 3
• Corporate Governance
• Chapter 4
• Legal, Regulatory, and Political Issues
• Chapter 5
• Business Ethics and Ethical Decision Making

20
Framework for Studying Social Responsibility
(cont.)

• Chapter 6
• Strategic Approaches to Improving Ethical
  Behavior
• Chapter 7
• Employee Relations
• Chapter 8
• Consumer Relations
• Chapter 9
• Community Relations and Strategic Philanthropy

21
Framework for Studying Social Responsibility
(cont.)

• Chapter 10
• Technology Issues
• Chapter 11
• Sustainability Issues
• Chapter 12
• Social Responsibility in a Global Environment