Corporate Social Responsibility and Sustainability through Ethical Human Resource Management

1. Joever Joseph Flores
Centro Escolar University Graduate School
MBATP
Corporate Social
Responsibility and
Sustainability
through Ethical HRM
Practice

2. Corporate Social
Responsibility
• A concept whereby
companies integrate social and
environmental concerns in their
business operations and in their
interaction with their stakeholders on
a voluntary basis.

3. Sustainability
• Describes the ability to maintain various
systems and processes – environmentally,
socially, and economically – over time.
(McCombs School of Business, UT)

4. 2 Ethics and Corporate Social Responsibility
Theoretical Perspectives of CSR

5. • Carroll (1991:42) argued that CSR
is a Multi-dimensional construct
embracing four sets of
responsibilities: economic, legal,
ethical and philanthropic. Through
representing the four components of
total CSR in a pyramid, Carroll
proposed that each of these
responsibilities should be fulfilled
together and in parallel rather than
within a sequence.

6. • According to a study by Ackers (2006), two
commonly debated ethical theories are:
1. Utilitarianism – Proponents of this theory
hold the view that whichever action gives the
greatest happiness or utility is to be preferred.
In other words, if one follows solely the
principle of utility, then the end justifies the
means.
2. Kantianism – Proponents of this theory
believe that the imperative to respective
everybody is the means as well as the end that
what is right for one person is right for
everyone.

7. • Instrumental Theories
• This group of theories understands CSR as a
mere means to the end, which is profit.

8. • Political Theories – The social
power of the corporation is
emphasized in this group of the
theories, specifically in its
relationship with society and its
responsibility in the political
arena. This leads the corporation
to accept social duties and rights
or participate in activities
requiring social cooperation.

9. Integrative Theories
This group of theories argues that
business depends on society for its
continuity and growth and even for
the existence of the business itself.
Therefore, business ought to be
integrated with social demands.

10. Ethical Theories
A fourth group of theories
understands that the
relationship between business
and society is embedded with
ethical values. This leads to a
vision of CSR from an ethical
perspective which implies that
firms ought to accept social
responsibilities as an ethical
obligation above any other
consideration.

11. Secchi proposed an alternative way
of categorizing the CSR literature in
three major groups based on their
theoretical perspectives, each
consisting sub-groups.

12. Efficiency Theory – as represented by Milton Friedman,
has utilitarian and narrow focus on shareholder value.
“There is one and only one social responsibility of
business – to use its resources and engage in activities
designed to increase its profits so long as it stays within
the rules of the game, which is to say, engages in open
and free competition without deception or fraud.” –
Milton Friedman, 1962
Social Responsibility Theory – aka “Integrated-Strategy
Perspective adopts a much broader focus that
emphasizes stakeholder value. It argues that
corporations should take into account the interest of
different stakeholders, such as employees, customers,
suppliers and communities when making business
decisions.
“Socially responsible companies not only try to be
economically sustainable and profitable, but also
endeavor to work with their employees, families, local
communities and nation states to improve the quality of
life in ways that are both ethical and sustainable, in
relation to society and environment.” – Ron Cacioppe,
2008

13. The Stakeholder concept
Looking after employees’ welfare and well-
being is an important part of a company’s
social responsibility. As employers, firms
have the responsibility to ensure the quality
of their employees’ working life, which
includes job quality, work-life quality and
personal well-being associated with work.
This calls for an approach that promotes
employee involvement and participation in
organizational decision making. It also
requires firms to take employees’ interests
into account when formulating HR policy.

14. CSR in Practice

15. • Starbucks - To have a positive impact on
the communities it works with and in,
Starbucks develops community stores that
partner with local nonprofits. The
nonprofits these stores work with offer
services aimed to meet the needs of the
communities they’re located in. Starbucks
in turn donates $0.05 to $0.15 per
transaction to the nonprofit partner.

16. Johnson and Johnsons Renewable
Energy - They have focused on
reducing their impact on the planet
for three decades. Their initiatives
range from leveraging the power of
the wind to providing safe water to
communities around the world. The
company continues to seek out
renewable energy options with the
goal to procure 35% of their energy
needs from renewable sources.

17. TOMS - TOMS mission is to donate a pair of shoes for every pair they sell and has resulted in the
donation of over 60 million pairs of shoes to children in need.

18. • Google - Data center using 50% less
energy than others in the world. They
also have committed over $1 billion to
renewable energy projects and enable
other businesses to reduce their
environmental impact through services
such as Gmail.

19. CSR and business
benefits

20. Opinions on the perceived benefits of CSR
activities differ widely. Some argue that
there is a strong business case for CSR and
that adopting a proactive CSR approach can
help companies to:
• Avoid business risk such as corruption
scandals or environmental accidents
• Have greater access to capital through
distinctive ethical values that appeal to
investors
• Attract and retain customers through
enhanced brand image and corporate
criticism
• Manage human resources more
efficiently through attraction and retention
of talent and enhanced motivation and
commitment of the workforce
• Gain acceptance in local communities
and support from host country
governments, including favorable policy
treatment

22. • Coca Cola - World
Without Waste a
commitment to collect
and recycle the
equivalent of 100% of its
product packaging by
2030. Asia Corporate
Excellency and
Sustainability awardee
for 2019 – Top CSR
Advocate in Asia. After
being named as the most
polluting brand in the
world by the Break Free
From Plastic Movement,
Coca Cola has finally
started a collection and
recycling drive for the
plastics they produce.

26. • Nestle – Nestle develops programs
which are relevant to the needs of the
communities where it operates. The
Nestle Factory in Lipa, Batangas conducts
a Cut and Sew Livelihood Project which
provides job opportunities to community
workers by giving them the factory’s
orders for shoe covers, rags and uniforms.
It also has a Yard and Garden Livelihood
Project which caters to unemployed
barangay housewives in the area where
the factory operates.

27. Tensions in ethical HRM and business

28. Individual Level
• Issue of concern: “How individual employees
should behave responsibly towards others including
their co-workers, employers, and customers.
Solution:
• Codes of Conduct – To ensure their employees
behave in a professional and ethical way.
• HR initiatives – appraisal and pay schemes to
encourage responsible behavior by their staff
Organizational Level
• Issue of concern: The ethical dimension of the
company’s employment or HR policies and practices.

29. Tensions and
dilemmas in CSR
and HR practices

30. • Should companies hire
cheap labor, including
children, women and agency
workers who may be the least
protected in the labor market,
in order to reduce
employment cost?

31. •Should companies
invest in training and
development of their
employees to
enhance their
productivity and
employability at the
risk of losing them to
their competitors?

32. • Should companies
economize on their
health and safety
provisions in the
work place to gain
cost advantage?

33. Should companies increase their
organizational flexibility to gain
competitive advantage by requesting
their employees to work flexibly
including working unsocial hours and
overtime at short notice to the detriment
of their work-life balance?

34. 3 International
Labour
Standards and
Decent Work
(Bithi, Child laborer in Bangladesh)

35. • Intensifying competition at the global level has exerted pressure on MNC’s to enhance
their competitiveness through ongoing rounds of cost-cutting that are centered on labor
cost
170 million children world-wide engaged to
child labor, Unicef (11% of children)

36. • This is often achieved
by worsening
employment terms and
conditions that are
typically manifested in
low standards of health
and safety, extremely
poor pay and long
working hours,
suppression of labor
organization, and
withdrawal of workplace
training, employment
benefits and job security.
Excessive Overtime, Low Pay,
Hazardous Working conditions

37. International Labour Standards
• A response to the growing
number of needs and
challenges faced by workers
and employers in the global
economy.
• International labor standards
are the norms or rules that
regulate or govern working
conditions and labour
relations.

38. •ILO was Founded in
1919 with an initial of
42 member states, ILO
now has 187/195
countries by 2020.
(Latest addition Cook
Islands 2015, Palau
2012 and Maldives
2009)

39. Strategic objectives of
International Labor
Organization
Promote rights at work Encourage decent
employment opportunities
Enhance social protection Strengthen dialogue on
work-related issues

40. 6 MAIN CATEGORIES OF ILO
INTERNATIONAL LABOUR STANDARDS
Respect for
fundamental human
rights
Protection of wages Employment security
Working conditions Labour market and
social policies
Industrial relations

41. 4 Sustainability
through the
integration of CSR
and HR Policy

42. 1. To identify and eliminate discriminatory practices in workplaces
2. To enable organizations to gain competitive advantage through ethical and strategic HR practices.
Two major objectives consistent with the argument for active engagement with CSR, labour standards, EO and DM.

43. CSR through
Employee
Involvement (EI)
2 Aspects (Directly
and Indirectly)

44. DIRECTLY THROUGH HR PRACTICES

45. INDIRECTLY THROUGH THE PARTICIPATION OF EMPLOYEES IN CSR ACTIVITIES

46. Building blocks of
socially
responsible HR
practices

47. Alignment of
CSR values
and the
delivery of
the HR

48. LS, EO legislation &workforce DM
likely to be more challenging to
manage due to societal differences
and varying management
priorities.

49. • MNC subsidiary practice - Specific
HR functions are outsourced to local
firms in the host country resulting to
compromise in ensuring a consistent
corporate approach to socially
responsible HRM

50. It is also area of HRM where discrimination is most likely to take place in less developed countries

51. Joever Joseph Flores
Centro Escolar University Graduate School
MBATP