2. Corporate social responsibility is
a sense of obligation on the part
of managers to build certain
social criteria into their decision
making.
3. The concept implies that when managers within a
business evaluate decisions, there should be a
presumption in favor of adopting courses of action
that enhance the welfare of the society at large. The
goals selected are often quite specific i.e. they
enhance the welfare of communities in which a
business is based, improve the environment, or
raise the education level of employees.
Also corporate social responsibility can also be
defined as the obligation of an organization’s
management to make decisions and take actions
that will enhance the welfare and interests of society
as well as the organization.
4. EVALUATING CORPORATE SOCIAL
RESPONSIBILITY
The total corporate social responsibility can be subdivided into four primary criteria i.e.
Economic
Legal
Ethical
Discretionary responsibilities.
These four criteria fit together to form the whole of a company’s social responsiveness.
The model shown below can be used to present the four criteria of corporate social
performance.
5. TOTAL CORPORATE RESPONSIBILITY
DISRETIONARY
RESPONSIBILITY
Contribute to the
Community,
Be a good citizen
ETHICAL RESPONSIBILITY
Be ethical. Do what is right. Avoid harm
LEGAL RESPONSIBILITY
Obey the law
ECONOMIC RESPONSIBILITY
Be profitable
6. 1. ECONOMIC RESPONSIBILITY
The business institution is the basic economic unit of society. Its
responsibility is to produce the goods and services that the society wants
and to maximize profits for its owners & share holders. Economic
responsibility is also called the profit maximizing view. This view argues that
the corporation should be operated on a profit –oriented basis, with its sole
mission to increase its profits sole mission to increase its profits as long as
it stays within the rules of the game. When corporate organization assumes
that economic gain is the only social responsibility it can lead them to
trouble.
7. 2. LEGAL RESPONSIBILITY
This defines what society deems as important with respect to appropriate
corporate behavior. That is, businesses are expected to fulfill their economic
goals within the framework of legal requirements imposed by local town
councils, state legislators and federal regulatory agencies.
Some examples of illegal acts include corporate fraud, intentionally selling
defective goods, deliberately misleading consumers and billing client for work
not done.
Organizations that knowingly break the law become pool performance.
8. 3. ETHICAL RESPONSIBILITY
This includes behaviors that are not necessarily codified into law and may
not serve the corporations direct economic interests. To be ethical means
that organizations decision makers should act with equity, fairness and
impartiality, respect the regards of individuals only when relevant to the
organizations goals and tasks.
Unethical behavior occurs when decisions enable an individual or company
to gain and the expense of other people or society as a whole e.g. Taking
clients orders even when you know you closing down.
9. 4. DISCRETIONARY RESPONSIBILITY
This is purely voluntary and is divided guided by a company’s
desire to make social contributions not mandated by economics,
law or ethics. Discretionary activities include generous
contributions that offer no pay back to the company and pays
are no expected e.g. Charitable giving e.g. Barclays- Madd Events
Safaricom - Lewa Marathon.
Discretionary responsibility is the highest criterion of social
responsibility because it goes beyond societal expectations to
contribute to the community welfare.
Advantages of social responsibility
10. ADVANTAGES OF SOCIAL RESPONSIBILITY
1. Can lead to better financial performance
2. can be able to expand with the support of
its stock-holders e.g. .In a community
11. SOURCE
Management By Richard L Draft, Martyn
Kendrick, Natalia Vershinina. Principles Of
Management African Edition By Mc Craw
H.T.T. Education
