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Corporate Citizenship
 

Corporate Citizenship

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    Corporate Citizenship Corporate Citizenship Presentation Transcript

    • Corporate Citizenship Corporate Citizenship Professor Hector R Rodriguez School of Business Mount Ida College Business, Society & Environment
      • Society
        • The Corporation and Its Stakeholders
        • People for the Ethical Treatment of Animals
        • Corporate Citizenship
        • The Social Responsibility of Business
        • The Shareholder Primacy Norm
        • CSR, Citizenship and Sustainability Reporting
        • Responsible Investing
        • The Community and the Corporation
        • Taxation and Corporate Citizenship
        • Corporate Philanthropy Programs
        • Employees and the Corporation
        • Managing a Diverse Workforce
      • Environment
        • A Balanced Look at Climate Change
        • Non-anthropogenic Causes of Climate Change
        • Sulfates, Urban Warming and Permafrost
        • Conventional Energy
        • The Kyoto Protocol
        • Green Building
        • Green Information Technology
        • Transportation, Electric Vehicles and the Environment
        • Geo-Engineering
        • Carbon Capture and Storage
        • Renewable Energy
        • Solid, Toxic and Hazardous Waste
        • Forests, Paper and Carbon Sinks
        • Life Cycle Analysis
        • Water Use and Management
        • Water Pollution
      Course Map – Topics Covered in Course
      • Understand the basic meaning of Corporate Citizenship (CC)
      • Knowing when and where the idea of CC originated
      • Examining the critical arguments for and against CC
      • Investigating how business balances its responsibilities to multiple stakeholders, including its stockholders
      Key Learning Objectives For the purpose of this discussion, CC should be considered analogous to CSR
      • Current corporate design stems from the 19 th century, where natural resources and labor seemed to be unlimited.
      • CC aims to work through that perception to improve corporate performance on social and environmental concerns.
        • It requires the corporation to assess the impact of its actions on people, their communities, and their environment
        • It requires companies to balance the benefits to be gained against the costs of achieving those benefits
      Corporate Citizenship
      • These expectations are the result of:
        • Essential function it performs for a variety of stakeholders
        • Immense influence it has over the lives of many of its stakeholders
      • The world’s largest 200 companies account for more than 25% of the world’s economic activity
      • With power comes responsibility, concept for this coined the “Iron Law of Responsibility”
        • In the long run, those who do not use power in ways society considers responsible will lose it.
      CC and Power
      • Turn of the 20 th century corporations came under attack for being too big and powerful
      • Curbs on their power began with antitrust and consumer protection laws
      • Farsighted industrialists (e.g. Andrew Carnegie) started philanthropic efforts aimed at educational and cultural institutions
      • Bill and Melinda Gates and Warren Buffet are recent examples
      History of the CC Concept Carnegie Mellon University Pension Funds (TIAA-CREF) Carnegie Hall in NYC Carnegie Libraries Carnegie Institution in DC
      • Around the 1920’s, the charitable needs of communities began to shift from just being a purview of a small group of wealthy philanthropists to business firms themselves
      • Became more common for businesses to programs / charitable support for the needy
      • Broader concept of business as “trustees” who work in the public interest came to be known as “The Stewardship Principle”
      History of the CC Concept
    • Foundation Principles of CC
      • Economic and social goals come together in companies that practice enlightened self-interest
        • Means firm leadership can see it is in the company’s self-interest in the long-term to provide true value to its customers, to help its employees grow and behave responsibly
      • Scholars have debated the related question: Do socially responsible companies sacrifice profits by promoting the social good?
      Enlightened Self-Interest
      • Corporate executives and board members are constantly under pressure to produce value for owners / investors
      • Management’s central goal is to promote the interests of the entire company, not any single stakeholder group
      • Challenge is to put emphasis on long-term profits rather than focus on immediate returns
        • An enlightened self-interest approach helps reconcile these challenges
        • It’s acceptable to incur short-term costs for socially responsible activities that benefit both the company and the public in the long-term
      Stockholder Interests v. Other Stakeholder Interests
      • Despite strong support in the business community for CC, it is not universally accepted
      • 2005 global study of corporate executives found 84% thought large corporations should “generate high returns to investors but balance this with contributions to the broader public good”
      • Common arguments, both for and against CC, on the next slide.
      The CC Debate
      • Pros
        • Balances corporate power with responsibility
        • Discourages government regulation
        • Promotes long-term profits for business
        • Improves business value and reputation
        • Corrects social problems caused by business
      • Cons
        • Lowers economic efficiency and profits
        • Imposes unequal costs amongst competitors
        • Imposes hidden costs passed on to stakeholders
        • Requires skills business may lack
        • Places responsibility on business rather than individuals
      The Pros and Cons of CC* *Continued on “The Social Responsibility of Business is to Increase Profits