corporate
social
responsibility.
Are businesses responsible for social issues
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agenda.
2
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agenda.
What is Corporate Social Responsibility? Jamie
2
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agenda.
What is Corporate Social Responsibility? Jamie
Arguments FOR Tom
2
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agenda.
What is Corporate Social Responsibility? Jamie
Arguments FOR Tom
Arguments AGAINST Jennifer
2
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agenda.
What is Corporate Social Responsibility? Jamie
Arguments FOR Tom
Arguments AGAINST Jennifer
Case Study: Microsoft Jamie
2
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agenda.
What is Corporate Social Responsibility? Jamie
Arguments FOR Tom
Arguments AGAINST Jennifer
Case Study: Microsoft Jamie
Case Study: Microsoft Marie
2
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agenda.
What is Corporate Social Responsibility? Jamie
Arguments FOR Tom
Arguments AGAINST Jennifer
Case Study: Microsoft Jamie
Case Study: Microsoft Marie
Conclusions Marie & Jen
2
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agenda.
What is Corporate Social Responsibility? Jamie
2
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definition.
“.....the business contribution to our
sustainable development goals. Essentially it
is about how business takes account of its
economic, social and environmental impacts
in the way it operates – maximising the
benefits and minimising the downsides...”
csr.gov.uk
3

definition.
“.....the business contribution to our
sustainable development goals. Essentially it
is about how business takes account of its
economic, social and environmental impacts
in the way it operates – maximising the
benefits and minimising the downsides...”
csr.gov.uk
4

Clear business case
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Stakeholders and customers are increasingly concerned about the
environmental and social impacts of the products they buy.
business can become more competitive, not less.

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£10
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£10
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£13
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7

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Shareholders
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And this is the basic argument that exists today when it comes to Corporate Social
Responsibility.
Shareholders have to balance out whether THEIR investments and dividends should be used
to fund social initiatives

Profit distribution
CSR
Reinvest
Employee bonus
Shareholder
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Profit distribution
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Profit distribution
Reinvest
Employee bonus
Shareholder
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derives from many
different areas
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As you are probably all aware, CSR consists of many different elements

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Poverty

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investing in the community (both monetary and time investment)

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and....
but interestingly there is a debate going on about why MNEs should and shouldn’t invest
heavily in CSR.
And to tell us about why they should, here is Tom

for.
Tom Fitton
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Neo-Classical View
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A Neo-Classical View of CSR which epitomizes capitalism is that the only responsibility of the
firm is to maximize profit for the shareholders whilst remaining inside existing laws, for
example paying wages and at least minimum wages.

“Few trends would so thoroughly undermine
the very foundations of our free society as
the acceptance by corporate officials of a
social responsibility other than to make as
much money for their shareholders as they
possibly can”
Milton Friedman, 1962
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Behavioural View
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“In addition to making a profit, business
should help to solve social problems whether
or not business helps to create those
problems even if there is probably no short-
run or long-run profit potential”
Holmes, 1976
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A contrasting perspective is one of the behavioral theorists, who believe management may,
regardless of shareholder pressures, be influenced by non economic factors, political aspects,
personnel preference resulting in a firm which takes into consideration ethics and morals
whilst conducting their business.

Increase Customer Awareness
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More recently academics have accepted that CSR has become an important aspect of
corporate strategy, this can be attributed to; an increased customer awareness of business
operations through global media exposure.

Media increases coverage and awareness of;
• Sustainability and environmental issues
• Health and obesity
• International operations; worker conditions, exploitation &
human rights
• General ethics and morals.
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Workplace
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Marketplace: Customer
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Marketplace: Customer
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Marketplace: Supplier
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Community
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Ethics
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Human
Rights
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Paradox
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not incorporating the minimum requirements of what is deemed socially responsible in the
modern business environment can have catastrophic effects in today’s media driven society…
and for this reason not taking measures to do so could lower share value, so the argument
that a business should concentrate on profit only is somewhat a paradox.

“Companies with a defined
corporate commitment to
ethical principles do better
financially than companies
that don't.”
DePaul University, 1997
32
Furthermore recent research has found that a proactive approach to CSR can result in
increased corporate performance

An 11-year Harvard University study found that
\"stakeholder-balanced\" companies showed four times
the growth rate and eight times the employment
growth when compared to companies that are
shareholder-only focused
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Reduced Costs
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Contrary to widely-held opinion, improved environmental management systems do not
automatically result in greater cost. Over time, they improve operational efficiency by
reducing waste production and water usage, increasing energy efficiency and in some cases,
selling recycled materials.

Production of 26
toxic chemicals
reduced €5.4m saved per year
(yes, we know this isn’t to scale)
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There are also company specific ways of reducing operating costs e.g. Dow Chemical Co has
set themselves a target of reducing production of 26 toxic chemicals which will save them
5.4 million Euros per year
BECAUSE IT COSTS THEM A LOT OF MONEY TO PROPERLY DISPOSE OF TOXIC WASTE

Enhance brand image and reputation
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A good reputation is often very hard to build - and yet can be destroyed in less than a day. So
much of a company's reputation results from 'trust' by stakeholders. A strong reputation in
environmental and social responsibility can help a company build this trust. However, it needs
to result from real practices and policies and an integrity towards the companies
responsibilities. Stakeholders are not stupid and can see through 'fluff'. Non Government
Organisations (NGOs) and local communities are far more willing to not take action as a result
of an environmentally-damaging incident if it is evident that the company has genuinely
worked hard to prevent it happening in the first place, and has in place solid management
practices for rectifying the situation - quickly - and for learning and improving to prevent any
repeat occurrence.

Increased sales & customer loyalty
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<The coins will swap round automatically>
Research has shown that consumers not only want good and safe products, but they also
want to know that what they buy was produced in a socially and environmentally responsible
way.

Increased sales & customer loyalty
37
<The coins will swap round automatically>
Research has shown that consumers not only want good and safe products, but they also
want to know that what they buy was produced in a socially and environmentally responsible
way.

Increase ability to attract and retain employees
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A company's dedication to CSR can help to recruit and retain employees. People want to work
for a company that is in accordance with their own values and beliefs, Employees stay longer,
reducing the costs and disruption of recruitment and retraining

“78% of employees would rather work for an
ethical and reputable company than receive
a higher salary”
The Cherenson Group
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Employees are not just worried about promotion and salary any more.
<I am now going to pass you over to Jennifer who will be debating the other side of CSR>

against.
Jennifer Chan.
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Conflicting stakeholder interests
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CSR or PR?
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Commercialised.
Companies under pressure to be “Green”

Green
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Voluntary? Companies feel obliged to have programmes for fear being singled out and losing
competitive advantage. Not the true spirit of implementing CSR. Should be about benefiting
society rather than being used as a tool for PR.
Important

Green
Peace?
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An example of this is with Greenpeace.
Greenpeace have a long history of pulling publicity stunts to raise their own profile and funds
rather than concentrate on the real matters of CSR

Green
Peace?
44
An example of this is with Greenpeace.
Greenpeace have a long history of pulling publicity stunts to raise their own profile and funds
rather than concentrate on the real matters of CSR

Video from Greenpeace
45
We want to show you an example of this.
Greenpeace last year ran a campaign to get people to create videos which damned Apple for
their “green” initiatives. No other manufacturer of PCs was highlighted in this way.
Greenpeace were using Apples brand image and publicity for their own benefit.
Here is one of the videos

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Used Apple as a publicity tool to benefit their own agenda.
Other brands not singled out
Hazardous materials in Apple Computers within EU regulations of whats allowed.
No worse than other brands, but Apple are an easy and famous target

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The move prompted Apple to make a response in order to defend themselves against the bad
publicity.
Long essay was posted highlighting their current status as well as future green initiatives.

Weight Recycled as a % of Total Sales
30.0
28
22.5 24
20
15.0
13
7.5 10
6
5
0 2 2
2002 2003 2004 2005 2006 2007 2008 2009 2010
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Apple pointed out that they lead the industry in respect to weight recycled as a % of past
sales
But why should they have to do this? Are Greenpeace using bullying tactics?

“Apple completely eliminated the use of CRTs
in mid-2006.
A note of comparison — Dell, Gateway,
Hewlett Packard and Lenovo still ship CRT
displays today”
Steve Jobs
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Apple retaliated for being singled out - brought other manufacturers into the conversation

“....businesses are using corporate social
responsibility as a shield behind which to
campaign against environmental and human
rights regulations. CSR is in some cases
counter-productive, worsening relations
between business and local communities”
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This leads me onto the next point... (read quote)
the key point here is that CSR is worsening relations. the Greenpeace/Apple thing is an
example of this.

“....businesses are using corporate social
responsibility as a shield behind which to
campaign against environmental and human
rights regulations. CSR is in some cases
counter-productive, worsening relations
between business and local communities”
51
This leads me onto the next point... (read quote)
the key point here is that CSR is worsening relations. the Greenpeace/Apple thing is an
example of this.

Tool for Risk
Management
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Benefits are unclear and
difficult to measure
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How do you quantify?
How do you benchmark?
Where do you prioritise?
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who decides where to invest money.... why do they invest in certain charities etc over others?
creates problems on fairness.

Diversion of attention from
more important issues
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“If efforts to do good become a distraction
from the core business they may actually be
downright irresponsible”
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case study.
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$400m donated last year to non-profit
organisations throughout the world.
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Microsoft is the largest contributor in the high-tech industry and one of the largest among all
businesses in the United States. Microsoft employees give more per person than any other
company's employees.

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The Microsoft Unlimited Potential programme is perhaps their biggest scheme aimed at CSR.
Its about helping individuals around the world have access to affordable technologies in
order to transform education, foster local innovation and enabling job opportunities
The goal is to create a cycle of sustained social and economic growth for everyone and not
just the most economically developed countries

1 bn
New computer users by 2015
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That's also the United Nations' target year for achieving the eight Millennium Development
Goals.

“It took about 35 years to get
about 1 billion people access to
computers.....It can't take us
another 35 years to reach another
1 billion.”
Orlando Ayala, Senior VP for Microsoft Emerging Segments Group,
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Basic goal was elaborated by Orlando Ayala, Senior VP of the Emerging Segments Group

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3
Focus Areas
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transforming education - much like tech has changed the way we learn
innovation (put tech into the hands of more people, greater innovation occurs),
economic opportunity (amalgamation of the above two.

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As you can see from the map above, they have activities in most of the worlds countries.
<Click> And here are a few pictures of this kind of thing in action - putting technology into
the hands of the youth worldwide

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Software package for Teachers and Students
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As part of this, Just a few months ago Microsoft announced that they were to sell a package
of Windows, Office and other software to government programs that distribute subsidized
PCs to students around the world.
Called this the Student Innovation Suite

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They priced this at just $3

If Microsoft doesn't take action, the risk is
that there may be billions of these computers
that will not have Microsoft software.
Although Microsoft wants to \"make good for
the world\" by increasing access to
computers, it also wants to position its
business to be part of the market expansion
in countries like China and India.
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There have been a few critics of this move however.
Lots of growth in mobile phones and PCs in these markets.
Governments have got wise to Microsofts tactics in Western society and are going with Linux.
This represents a huge threat to Microsofts business and hence this move. Get countries
hooked on MS software..when they become developed, charge them full price.
Catch 22. If they sold at full price these countries couldnt afford it and people would
complain that Microsoft isn’t doing enough.
Sell them cheap and people become cynical about it. So its a tough situation for MS but I
believe they did the right thing

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Other people saw this as a move against Negoponte’s OLPC... one laptop per child initiative
which has a similar goal of putting technology into the hands of children in developing
countries.
The OLPC runs Linux and NOT Microsoft Windows.

“It's a scary concept for Microsoft to
have 100 million to 200 million
people potentially growing up using
open-source software and Linux.
Never underestimate the ability of
Microsoft to respond to that threat”
Steve Kleynhans, Gartner
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Just to wrap this up here is a short video from Microsoft founder Bill Gates who puts the
Unlimited Potential programme into his own words

case study.
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Pollution Sources In a Car
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Exhaust
Evaporative emissions
emissions
Refuelling losses
Pollution Sources In a Car
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Ford has always led the way when it comes to innovation
So does it when it comes to reducing the environmental
impact of the vehicles
Ford was the first vehicle manufacturer in Europe to offer
production passenger vehicles with Flexifuel vehicle (FFV)
Technology.
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Priced at a similar level to their petrol-only equivalents
all the advantages of bio-Ethanol
good for the environment and economic as well.
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Ford is the only vehicle manufacturer developing the five
serious environmentally advanced technologies of clean diesel,
Flexifuel, electric hybrid, hydrogen internal combustion and
fuel cell.
77

For example, the new Mondeo 1.8-litre TDCi has significantly
better performance and fuel economy and produces around
20% less CO2 than the equivalent 1993 Mondeo model
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Ford is committed to sustained progress as many areas
as possible that will reduce its impact on the
environment – and help people to do so too. These
include: wind turbines at Dagenham, solar panels at
Bridgend and new recycling initiatives in both its
products and manufacturing processes.
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conclusions.
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The relationship between the
corporation and society is
inseparable, in that society needs
corporations for products and
corporations needs society for profits.
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Profits and CSR are not mutually
exclusive but go hand-in-hand.
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The global business environment has
changed hence the classical view of
corporations to solely make profits is
short-sighted.
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“Evidently, embracing corporate social responsibility not
only makes good business sense. Those that get left
behind are missing business opportunities, competitor
advantage and improved management opportunities in
this increasingly globalised world. By not engaging in CSR,
companies are not only under managing their impact on
society and the environment, they are under managing
their own economic self-interest.”
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While there are some who abuse it, we feel that
everybody - MNE’s, Governments and Citizens
have to take responsibility for CSR, because if
we don’t......
who will?
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Thank you.
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“So just to close this up are there are questions?”

?
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“So just to close this up are there are questions?”