Normally, CSR is considered as a thing to be conducted with passion and warm heart. I would not say that it is not. However, in the business world, even CSR should be supported by cold-blooded reasoning and decision makings. Here is what I considered about successfully being socially responsible in a realistic business world. *I re-used some slides from my former ppt decks.

1. Corporate Social Responsibility
as a Business Item

2. Table of Contents.
►Intro:
To tell about CSR…
►Agenda 1:
What is Sustainability? And What is CSR?
►Agenda 2:
How could Corporate’s Social Responsibility be a business?
►Agenda 3:
When would Social Responsibility be a competitive advantage?

3. ►Intro
To tell about CSR…

4. I found a single blemish to be covered in the wide-spread-belief about the topic
between the CSR personnel, which could be summarized like below:
"Social responsibility and profitability are in a trade-off relationship. Which means,
corporates trying to be socially responsible burdens themselves too much so that
eventually they have to risk their profitability to achieve their so-called 'social
responsibility' goal."
Social Responsibility
Profit
Corporate

5. For current CSR personnel of Korean enterprises, usual suspects who had the
greatest influence on forming the first impression about the topic is their senior
colleague.
And considering the occupational ancestors of Korean CSR personnel, which
are mostly PR staff, their duty of helping corporate to give better impression to
general public might have required some 'spending money without any
expectations on return.' activities.
For example, giving a donation to
nearby disability care center or having
employees participate in a breast
cancer prevention campaign might
seem to have a 'trade-off' relationship
with corporate productivity, since those
actions still require resources to be
consumed while benefits from them are
usually lack of clarity.
This makes me feel good.
But what is all of these good for my job?

6. However, is CSR all about donation, charity, and philanthropy?
I would firmly say 'NO.' Even the tasks conducted by the ancestors of CSR
personnel - managing public relations - was not all about it.
In the language of a consultant, defining components of CSR as 'donation',
'charity', and 'philanthropy' could at least be mutually exclusive but cannot be
collectively exhaustive.
Well, that glacier looks
smaller than this ship!
Oh boy, seeing is
not always believing..

7. Therefore, basing on that concern, I would bring a new hypothesis about CSR,
claiming that it could be a corporates' activity to hedge risks related to
interested parties including shareholders, to secure or improve their
profitability.
Social Responsibility
Profit
Corporate
Should've done
this earlier!

8. ►Agenda 1
What is Sustainability?
And What is CSR?

9. Okay, here is the first troublemaker, the word ‘Sustainability’. Everyone knows
what the word ‘sustain’means in each one’s own language.
However in South Korea, the word ‘sustainability’ makes so much confusion
that even some people who works for corporation’s departments which are
related to sustainability theme raises a question about the definition of the
concept.
Sustain
[verb]
1.to support, hold, or bear up from
below; bear the weight of, as a
structure.
2.to bear (a burden, charge, etc.).
3.to undergo, experience, or suffer
(injury, loss, etc.); endure without
giving way or yielding.
4.to keep (a person, the mind, the spirits,
etc.) from giving way, as under trial or
affliction.
5.to keep up or keep going, as an action
or process: to sustain a conversation.
∙∙∙
…don’t ask me

10. To help people to clarify the meaning of the esoteric word, I would like to use an
approach that finds some clue from what people are already familiar of.
First of all, the basic concept of ‘to sustain’ could be ‘to keep up’ or ‘to go on.'
Therefore, let’s suppose that one entity could be described as ‘sustaining’ if it is
maintaining its status or behavior while its surroundings keep changing.
Entity Entity
An entity remains constant,
because its surroundings
keep calm.
Staying
Entity Entity
Sustaining
An entity keeps up while its
surroundings become
different from what they
were.
Entity Entity
Changing
An entity alters its status or
behavior because its
surroundings become
different.

11. Then, what could be a default status or behavior of a ‘Corporation?’
Well, from plenty of definitions, which are already set by legions of business
management gurus over an extended period of history, a corporation could be
defined as 'A body composed of a group of people, which produces and provides
goods or services to the market in its pursuit of profit.'
1. We make
2. We sell
3. ????
4. PROFIT!
*Remember? Still, things are muchmore complicated
than this!
$
Therefore, if a corporation that wishes
to be described as ‘sustaining,’ it has to
retain its abilities to pursue profit, and
those abilities could be divided into
three criteria below.
1. Ability to make ► Productivity
2. Ability to sell ► Competitiveness
3. Ability to organize

12. In conclusion, for a corporation, being ‘sustainable’ would mean that it can
maintain its ability to make, sell and organize, while its surroundings are
changing in a way to weaken one or all of those abilities.
Things are changing too much..
Prices of materials haverisen drastically…
Customers are demanding far better products for much
lower prices…
Our firm is operating still more worksites all over the
world…
Corporation
PRICE
↓ ↓ ↓ ↓ ↓
↑ ↑ ↑ ↑ ↑
UTILITY
In Short!!
WE SUSTAIN!!
Corporation
End of chapter

13. Now, here comes our next black sheep, ‘Responsibility.’This word absolutely
has come from the word ‘Respond,’ which has a meaning of ‘to reply’ or ‘to
answer.’Therefore, the word ‘Responsibility,’ which is composed of two words,
‘Respond’ and ‘Ability,' should merely mean ‘skill or power to answer.’ In
many countries, however, the responsibility usually is referred as a duty to
perform a particular behavior.
Since I assume that inserting a concept of an ‘obligation’ into a meaning of
responsibility is a source that causes the confusion, I will try getting rid of the
sense of ‘mandatory’ from the puzzling word.
Respond + ABILITY
50%
50%Stimulation ENTITY
Remain
Respond + OBLIGATION
100%
0%Stimulation ENTITY
Remain

14. Well, for corporations, being able to respond to certain changes would be vital,
since the lack of that ability could severely weaken chances for them to generate
a profit.
Thus, a responsibility could be one of the essential factors for corporations to
keep their ability to make a profit, which I defined as ‘Sustainability’ in one of
the previous slides.
Ability to
MAKE
↓↓↓↓↓
Ability to
SELL
↓↓↓↓↓
Ability to
ORGANIZE
↓↓↓↓↓
Stimulation
Stimulation Stimulation
SUSTAIN!!!
Corporation
LIQUIDATION…

15. In one of the previous slides, I presented an infographic like below, referring
three criteria of corporations’ ability to pursue a profit.
On the right side of that infographic, I
named two of those three criteria,
deliberately leaving one ability unnamed.
1. We make
2. We sell
3. ????
4. PROFIT!
*Remember? Still, things are muchmore
complicated thanthis!
$
1. Ability to make ► Productivity
2. Ability to sell ► Competitiveness
3. Ability to organize
For corporations to produce and merchandise goods or services attentively,
they must allocate an adequate quality and quantity of resources to proper
functions of making and selling.
This behavior of allocation, ‘organizing,' could be conducted successfully on the
basis of corporations’ awareness about the current ability to make and sell and
about situational changes affecting those two abilities.

16. Therefore, from now I would name an ability of corporations to organize
resources as ‘Responsibility’ because to properly organize, it is necessary for
them to sense both internal and external changes influencing their
sustainability and to know how to take the best affirmative action to keep
themselves working.
This human-likefigure is what I designed to help people
understandhow an organizing of resources happens in
corporations to make and sell their goods or services.
MAKE! SELL!
Corporations
Resources
INFORMATIONPRICE
↓ ↓ ↓ ↓ ↓
↑ ↑ ↑ ↑ ↑
UTILITY
*Hmm… I thought this would be pretty cool, but I have to admit that this is a bit
horrifying…

17. Still, there is one more slightly confusing expression related with ‘responsibility.’
Because I already know that frequently people are told about the word ‘Social’
responsibility of corporations, I could assume that people might have some
difficulties understanding the concept of the word ‘social’.
Well, usually being social is
considered the opposite of being
private. Therefore, the word ‘social’
often reminds people of something
related to public, government, or
community.
However, a concept of the ‘Social’
included in the word ‘Social
Responsibility’ is merely the
opposite of ‘individual,’ a concept
which means ‘multiple’ or ‘complex.’
Source of Change
Supply Chain
Market
Customer
∙∙∙
Customer
Relationship
Management
Marketing
Merchandising
Supply
Chain
Management
Investor
Relationship
Public
Relationship
∙∙∙

18. My definition of the confusing two words are these.
Goal:
Sustainability
Corporation
1. Corporate Sustainability
→ Corporations’ ability to remain working. Basically, a
corporation has to produce and sell its goods or service,
with organizing resources properly.
2. Corporate Responsibility
→ One of three critical abilities that
corporations should possess. To be
responsible, a corporation ought to
identify changes which affect its
sustainability and allocate resources
appropriately to adjust its the other
two abilities.

19. ►Agenda 2
How could Corporate’s
Social Responsibility be a
business?

20. Consider yourself as a stakeholder of a business. You are an investor, who wants
to decide whether you invest your capital in a specific corporation. What would
you like to know about the business to make proper decision and what kind of
information would you require to find out what you want to know?
You might want to know whether the corporation is making
a profit or not. Therefore you would require the most
recent Statement of Comprehensive income the business,
which includes sales, expenditures, revenue.
Also, you would try to make sure that the business is stably
operating . In this case you might refer to the corporation’s
Statement of Financial Position, which includes the assets
and liabilities.
Of course, you must expect that information referring to the profitability and
stability of a business stated in the corporation’s financial statements to be
thoroughly assured to be true.

21. Like we’ve just found out, Financial Statements would be very significant
communication materials between corporations and its stakeholders. However,
would financial information be a representative means to lead people know
about the business as a whole?
This corporation is
making profit, and its
stable.. Yup, it is good
business.
Cash Flow
They are making profits by compulsory Labor?
They are disposing toxic chemicals without any processing to lower expenditure?
They are not contributing local communities economical development at all?

22. Conventionally, it is believed that the profit is the representative output which
businesses could offer to its stakeholders. Therefore, many stakeholders
thought that if they analyze the financial statements of a particular corporation
very well, they would understand thoroughly about that firm.
However, some critical information about the firm is not given in the financial
statements. Which means, your rationality on the specific company would be
bounded if you only focus on financial statements.
• Ensuring workers go home safely
SAFETY
• Making people happy to workWELFARE
• Help local people get a job
HIRING
• Improve air quality around the operation
PURIFICATION
• Contribute to national technology development
DEVELOPMENT
Profitability

23. And actually, more and more businesses are introducing their efforts regarding
providing their stakeholders with various outputs derived from business
activities. Stakeholders of corporations could access the official communication
materials such as sustainability reports or integrated reports, which are
containing statements about those efforts.
Of course, statements included in corporations’ sustainability reports or
integrated reports are based on very sophisticated and globally recognized
guidelines or standards. However, businesses and stakeholders should first be
aware of the ground principles about the desirable outputs that could come out
from business activities.
Data &
Information
Manuals &
Standards
The
SUSTAINABILITY
REPORT

24. ISO 26000, officially revealed in November 2010, may not be the best-known
publication about CSR in Korea, but most CSR professionals kept their eyes on
how it defines the topic.
According to the international standard, social responsibility means below:
"Responsibility of an organization for the impacts
of its decisions and activities on society and the
environment, through transparent and ethical
behavior."
ISO 26000 also presents 'The Seven Core Subjects'
and examples of 'transparent and ethical behaviors'
expected to corporates.
But putting those core subjects aside, the main point
of ISO's definition of CSR is that Corporates should
treat the society and the environment as righteously
as possible.
Picture
'The Seven Core Subjects', ISO 26000, 2010.
Community
involvement and
development
Human rights
Labor
practices
The Environment
Fair operating
practices
Consumer
issues
ORGANIZATION

25. At first glance, you might see six different areas. Some of them might seem
familiar and others would not. Many businesses are focusing on those areas,
more specifically on resolving questions about ‘how would corporations take
actions regarding to each area?’
Human
rights
Labor
practices
The
Environ-
ment
Fair
operating
practices
Consumer
issues
Community
involvement and
development
Identifying some Sustainability
criteria-related activities and managing
achievements of those activities
Does doing this
really assures
businesses to be
responsible?
Community
involvement and
development
Human rights
Labor
practices
The Environment
Fair operating
practices
Consumer
issues
ORGANIZATION

26. However, after digging more deeply into the ISO 26000, I found that the
structure of ISO 26000 standard would be described like this.
Human rights
Labor practices
The Environment
Fair operating practices
Consumer issues
Community involvement and development
Organizational Governance
Core Subjects
Domains that corporations should be responsible at
Organizational structures and decision making
processes that corporations should establish to
ensure social responsibility. Principles and considerations
Principles that corporations should abide
by and significant considerations to
ensure compliance with the principles
Issues
Specific categories of actions which
could make corporations responsible to
each domains.
Related actions and expectations
Examples of actions that corporations
could implement, and reasons why those
actions are desirable.

27. The structure of ISO 26000 gives us a hint about ‘How could organizations
assure their activities be responsible?’
Principles
Issues
Related actions
Expectations
Considerations
Corporations have to take
measures or actions to..
Meet expectations of stakeholders
regarding to…
Issues related with each subjects
without omitting any…
Significant considerations about
each core subjects to…
Make sure that they are adhering
to principles of each subjects.
So, it is like building…
seven different objects
To complete as
intended design!

28. Therefore, if our job is to assure a corporate’s activity related to financial
reporting to be just and fair enough to comply with all the relevant principles,
then we also would be able to develop a service that assures a client’s non-
financial activities to be sophisticated enough to adhere to all the related norms.
Investigating & assuring work processes and
controls related to financial reporting
Assuring financial statements
The
SUSTAINABILITY
REPORT
Investigating & assuring non-financial
topics management processes and controls
Assuring corporation’s
official statements
regarding to its non-
financial operational
activities.
WHY
NOT?

29. ►Agenda 3
When would Social
Responsibility be a
competitive advantage?

30. The most famous definition of CSR between general publics in Korea is the
iconic 'Pyramid of Corporate Social Responsibility', suggested by Professor
Archie B. Carrol in 1991.
People usually analyze and try to understand
what do each four components of CSR mean and
the dynamics between each floor, because doing so
is indeed quite informing.
However, what have given me more insight about
the topic was a principal goal of the article, which
is according to the author, "to flesh out what it
means to manage stakeholders in an ethical or
moral fashion."
Using that sentence as a logical basis, I assumed
that Professor Carroll defines CSR as an 'activity
conducted by corporate to manage stakeholders in
a righteous manner.''Pyramid of Corporate Social Responsibility',
Archie B. Carrol, 1991.
ECONOMIC
responsibilities
Be Profitable
The foundation upon which all others rest
LEGAL
responsibilities
Obey the Law
Law is society’s codification of right and wrong;
Play by the rules
ETHICAL
responsibilities
Be ethical
Obligation to do what is right, just and fair;
Avoid harm
PHILANTHROPIC
responsibilities
Be a good Corporate Citizen
Contribute resources to the community;
improve quality of life

31. Amongst South Korean corporations which are interested in responsible
business, almost every firm is looking for solutions for appropriately fulfilling
the philanthropic responsibility.
Well, being philanthropically responsible business is aa undoubtedly virtuous
choice. However, just as the purpose of working out is not to equally make the
whole part of our body bulky and rock solid, the proper level of corporate
responsibility would be different for each business considering its maturity and
the characteristic.
ECONOMIC
responsibilities
LEGAL
responsibilities
ETHICAL
responsibilities
PHILANTHROPIC
responsibilities
But…

32. Considering the statement of the author that the purpose of the pyramid is to
flesh out how to manage stakeholders, corporations should first take the four-
story-pyramid as a standard of ‘what stakeholders are expecting for
corporations?’
PHILANTHROPIC responsibilities
Stakeholders’ expectation:
Be a good Corporate Citizen. Contribute resources to the community, and improve the quality of
people’s life. Well, although being philanthropic cannot be an obligation, we consider that you
could have generosity and benevolent spirit toward people and community around you.
Matter of
Integrity
ECONOMIC responsibilities
Stakeholders’ expectation:
Be Profitable. After all, corporations also have to survive. Therefore, until you are making enough
money to make your own living, please do your best to maximize your profitability. We would
understand that doing so is the only way that you could benefit us.
Matter of
Quantity
LEGAL responsibilities
Stakeholders’ expectation:
Obey the Law. Now we see that you are profitable enough to forget about the worries of yourself
starving to death. Therefore, it is time for you to have a conscience of playing by the rule. Beware
the rules of the game that you are playing and take it as a standard of your operation.
ETHICAL responsibilities
Stakeholders’ expectation:
Do what is right, just and fair. You are now quite accustomed to the laws and orders. Complying to
the rules of the game that you are playing seems to be no burden for you at all. From now, you need
to try to be the best of what you could be. Avoid as much harm as possible.
Matter of
Quality

33. Then, the expectations of stakeholders per each stage of responsibility would
forma basis of decide what actions could corporations take to react such
expectations. Of course, actions taken in the previous stage should be remained
or continued through next stages.
Be Profitable. ► Maximize profitability -> minimize expenses through innovation
Obey the Law. ► Enhance output quality -> maintain profitability while complying to stricter regulations
Do what is right ► Set a premium -> maximize outputs while maintaining costs as minimum
Be a good
Corporate Citizen.
Share premium for free
-> make current output as a norm
ECONOMIC
LEGAL
ETHICAL
PHILANTHROPIC

34. Long story short, for each different corporation, which has a different set of
assets and capabilities and which makes different impacts to society, Professor
Archie B. Carrol’s idea could be a hint to define an adequate behavior of each,
avoiding from being overly responsible.
'Pyramid of Corporate Social
Responsibility',
Archie B. Carrol, 1991.
ECONOMIC
responsibilities
Be Profitable
The foundation upon which all others rest
LEGAL
responsibilities
Obey the Law
Law is society’s codification of right and wrong;
Play by the rules
ETHICAL
responsibilities
Be ethical
Obligation to do what is right, just and
fair; Avoid harm
PHILANTHROPIC
responsibilities
Be a good Corporate Citizen
Contribute resources to the
community; improve quality of life
Example-Environmental responsibility for different corporations
Situation: The Government requires every corporation to install waste reduction facility in their operation sites. It takes
$5 mil to set up the facility. Neglecting the requirement would charge a fine of $1 mil annually.
Company A
• Makes $ 10 mil of sales, and net profit is $3 mil.
• Setting up waste reduction facility would damage its profitability
severely while neglecting the requirement would just weaken it slightly.
Company B
• Makes $ 22 mil of sales, and net profit is $8 mil.
• Although setting up waste reduction facility would weaken its
profitability, this company still could continue to operate itself
Company C
• Makes $ 50 mil of sales, and net profit is $17 mil.
• This company could install two required facilities in their operation
site without failing to achieve its minimum profit goal of $7 mil.
Company D
• Makes $ 120 mil of sales, and net profit is $36 mil.
• This company could install more than two required facilities in their
operation site without failing to achieve any of its profit goals.
However, setting up more than two facilities would not make any
further reduction effect.
Well, yoursurvival is first.
Just pay a fineand keepoperating.
Now youcan play by the rules.
Install the facility in your operation
site.
It seemsthatrules don't bother you
anymore.
Set two facilitiesup andbe the best
you can be.
You are already the best youcould
havebeen.
It wouldbe marvelousif you help
Company A improveby donating a
requiredfacility.

35. Combining the pyramid of CSR with the ISO 26000, we could find that
corporates could respond to each subject of social responsibility at a different
level. This finding means that corporates could set a satisficing level of their
responses to each topic, considering the status of various outputs of their
operations.
Complying human
rights laws
Ethically treating
employees
Ethically conserving the
environment
Complying market
related laws
Ethically treating
consumers
Philanthropically
composing organization
Philanthropically involving and
developing community

36. Anyway, the concept of ‘responding to stakeholder’s expectation’ implies us
about when could corporates social responsibility become a competitive
advantage.
Hmm… I needto wear shoes. Are
there any shoesthatI can afford?
Yeah!Thisis the shoes youare
looking for!
Usually, shoesare
soldfor 30$, but theseshoesare
soldonly for 10$!
Now I want a ‘legit’ product. I don't
want to be an unjust consumer.
This!Is!LEGIT shoes!
They are made of legally permitted
materials, producedviaguaranteed
processes, anddistributedthrough
official networks!!
Hmm.. Now, justprotectingmy feet
witha legitproductdoesn’tsatisfy
me. I want somemore
Then!You are lookingfor these
shoes!
They are made of qualitymaterials,
by the mostskilledshoemakers!!
Also, they will be fullycustomized
to fit your feet perfectly!
Wow! Youare supposedto be
finding thisoption!
If you choose thispurchaseoption,
you will have your pair of the best
qualityshoes, andwe will donate
anotherpair to developing
communities!
Well, now I am lookingfor some
meaningful action to make my
consumptionmore valuable. Will
there be any suchoptionfor me?
Corporations Corporations Corporations Corporations