CSR & Ethics - lecture 1


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CSR & Ethics - lecture 1

  2. 2. Definitions and Relationships Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done” Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior
  3. 3. Recent Evidence of CSR Interest An Internet search turns up 15,000 plus response to “corporate citizenship” Journals increasingly “rate” businesses (and NGOs) on socially responsive criteria: Best place to work Most admired Best (and worst) corporate reputation
  4. 4. Reasons for CSR ActivitiesCSR activities are important to and evenexpected by the public And they are easily monitored worldwideCSR activities help organizations hire andretain the people they wantCSR activities contribute to businessperformance
  5. 5. Corporate Social Responsibility Continuum Do more than required; e.g. Integrate social engage in objectives and philanthropic business goals Fight social giving responsibility initiativesMaximize firm’s Balance profitsprofits to the and socialexclusion of all objectiveselse Do what it takes to Lead the make a Comply; industry profit; skirt do what Articulate and other the law; fly is legally social value businesses below required objectives with best social radar practices
  6. 6. CSR are Grounded by Opposing Objectives(Maximize Profits to Balance Profits with SocialResponsibility) and so Activities Range Widely Do what it takes to make a profit; skirt the law; fly below social radar Fight CSR initiatives Comply with legal requirements Do more than legally required, e.g., philanthropy Articulate social (CSR) objectives Integrate social objectives and business goals Lead the industry on social objectives
  7. 7. Businesses CSR ActivitiesPhilanthropy give money or time or in kind to charity Integrative philanthropy—select beneficiaries aligned with company interestsPhilanthropy will not enhance corporate reputationif a company fails to live up to its philanthropic image or if consumers perceive philanthropy to be manipulative
  8. 8. Integrate CSR GloballyIncorporate values to make it part of anarticulated belief systemAct worldwide on those values Cause-related marketing Cause-based cross sector partnershipsEngage with stakeholders Primary stakeholders Secondary stakeholders
  9. 9. Business Ethics DevelopmentThe cultural context influencesorganizational ethicsTop managers also influence ethicsThe combined influence of culture and topmanagement influence organizational ethicsand ethical behaviors
  10. 10. The Evolving Context forEthicsFrom domestic where ethics are sharedTo international where ethics are not sharedwhen companies: Make assumptions that ethics are the same Ethical absolutism—they adapt to us Ethical relativism—we adapt to themTo global which requires an integrativeapproach to ethics
  11. 11. Emergence of a GlobalBusiness EthicGrowing sense that responsibility for rightingsocial wrongs belongs to all organizationsGrowing business need for integrativemechanisms such as ethics Ethics reduce operating uncertainties Voluntary guidelines avoid government impositionsEthical conduct is needed in an increasinglyinterdependent world—everyone in the same gameCompanies wish to avoid problems and/or be goodpublic citizens
  12. 12. Ways Companies IntegrateEthics Top management commitment in word and deed Company codes of ethics Supply chain codes Develop, monitor, enforce ethical behavior Seek external assistance
  13. 13. External Assistance with EthicsIndustry or professional codesCertification programs, e.g., ISO 9000Adopt/follow global codes Caux Round Table Principles
  14. 14. Reasons for Businesses to Engagein Development of a Global Code of Business Ethics Create the same opportunity for all businesses if there are common rules Level the playing field They are needed in an interconnected world They reduce operating uncertainties If businesses don’t collaborate, they may not like what others develop
  15. 15. Four Challenges to a Global Ethic Global rules emerge from negotiations and will reflect values of the strong Global rules may be viewed as an end rather than a beginning Rules can depress innovation and creativity Rules are static but globalization is dynamic