Corporate Social Responsibility

1
Corporate Social Responsibility

• Presentation to The Valley Society for Human
  Resource Management, November 14, 2006
• Deborah Bishop, Ph. D.
• Professor of Management
• Saginaw Valley State University

2
True or False?

• Businesss only responsibility is to make a
  profit for the stockholders.

3
Corporate Social Responsibility (CSR)

• What is Corporate Social Responsibility?
• According to Archie Carroll, CSR is a business
  organizations responsibilities in 4 areas
• Economic
• Legal
• Ethical
• Philanthropic
• To whom does the corporation have
  responsibilities?
• Its stakeholders

4
Market stakeholders of business
Employees
Stockholders
Distributors, Wholesalers, Retailers
Business firm
Creditors
Customers
Suppliers
Source Lawrence, A.T., Weber, J. and Post, J.E.
Business and Society, 11th ed.
McGraw-Hill/Irwin, 2005.
5
Nonmarket stakeholders of business
Communities
Governments
General Public
Business firm
Activist Groups
Business Support Groups
Media
Source Lawrence, A.T., Weber, J. and Post, J.E.
Business and Society, 11th ed.
McGraw-Hill/Irwin, 2005.
6
Corporate Citizenship (CC)

• Proactively addressing business and society
  issues.
• Building stakeholder partnerships.
• Discovering business opportunities through social
  strategic goals.
• Transforming a concern for financial performance
  into a vision of corporate financial and social
  performance.

7
Arguments Against CSR/CC

• Its too expensive.
• Its illegal. Managers have a responsibility to
  return profits to the stockholders, who may then
  spend it on philanthropic causes if they wish.
• Its inefficient. Businesses loses its
  efficiency in the delivery of its goods and
  services.

8
Arguments In Favor Of CSR/CC

• In the long run, social responsibility is in the
  self-interest of business.
• Social responsibility can be profitable.
• Being socially responsible can help avoid
  increased government regulation.
• Business is a social institution with social
  responsibilities.

9
Arguments In Favor Of CSR/CC (ctd.)

• Business is a social institution with social
  responsibilities (ctd.)
• The corporation is granted a charter by
  society.
• The corporation is a common good.
• Companies benefit from many public goods, and
  thus owe the public in return. Corporations
  are trustees of societys resources.

10
Douglas S. Sherwin (1983) said At its core,
business is a feedback system . . . What is
ofttimes not appreciated, even by the members
themselves, is that the systems members are
interdependent emphasis his. . . What each
member receives is constrained by what other
members require, and no member can in the long
run enjoy a disproportionate share.
Sherwin, D. The ethical roots of the business
system. Harvard Business Review, 61(6), Nov/Dec
1983, 183-192.
11
The Center for Corporate Citizenship at Boston
College
http//www.bcccc.net/
12
Business Ethics Magazine Top 100Spring, 2006
Source Business Ethics Magazine Online. 100
Best Corporate Citizens for 2006, accessed
10/31/2006, (http//www.business-ethics.com/whats_
new/100best.html).
13
Corporate Philanthropy

• Donations
• Volunteer initiatives
• Community service
• Educational or cultural projects

14
Four Types of Corporate Philanthropy
Source Bruch, H. and Walter, F. The Keys to
Rethinking Corporate Philanthropy. MIT Sloan
Management Review, 47(1), Fall 2005, p. 51.
15
HRs Leadership Role in CSR

• Include CSR in the HR Management System
• Create a strong organizational culture.
• Scan the environmentidentify threats.
• Expand intellectual capital.
• Include ethical concerns in staff performance
  measures.
• Support participative decision-making.
• Ensure highest standards in workplace health and
  safety.
• Encourage active engagement in community
  activities.
• Continue HRs Role as a Change Agent

Source Lockwood, N. Corporate Social
Responsibility HRs Leadership Role. SHRM
Knowledge Center, (http//www.shrm.org/research/q
uarterly/1204RQuart_essay.asp), accessed
10/31/2006.
16
References Bruch, H. and Walter, F. The Keys to
Rethinking Corporate Philanthropy. MIT Sloan
Management Review, 47(1), Fall 2005,
49-55. Business Ethics Magazine Online. 100 Best
Corporate Citizens for 2006, (http//www.business-
ethics.com/whats_new/100best.html), accessed
10/31/2006. Carroll, Archie B. The pyramid of
corporate social responsibility Toward the
moral management of organizational stakeholders.
Business Horizons, 34(4), July-August 1991,
39-50. The Center for Corporate Citizenship at
Boston College, (http//www.bcccc.net). Lawrence,
A.T., Weber, J. and Post, J.E. Business and
Society, 11th ed., McGraw-Hill/Irwin,
2005. Lockwood, N. Corporate Social
Responsibility HRs Leadership Role. SHRM
Knowledge Center, accessed 10/31/2006,
(http//www.shrm.org/research/quarterly/1204RQuart
_essay.asp). Matten, D., Crane, A., and Chapple,
W. Behind the mask Revealing the true face of
corporate citizenship. Journal of Business
Ethics, 45(1), June 2003, 109-. Provides a
discussion of the evolution of the CC concept
from a theoretical perspective. Sherwin, D. The
ethical roots of the business system. Harvard
Business Review, 61(6), Nov/Dec 1983,
183-192. Starling, G. The Changing Environment of
Business, 4th ed. South-Western College
Publishing (Thomson), 1996.