Lecture on CSR in tourism, business and hospitality industries with a focus on business management.

1. Lecture: CORPORATE SOCIAL RESPONSIBILITY
(CSR) AND ETHICS
Essential Reading: Parker, B. (2005). Introduction to globalization and business : Relationships
and responsibilities (2nd ed.). London: SAGE Chapter 15
08 November 2023

2. Lecture Objectives
1. Understand CSR definitions and corporate interest
2. Explore Theories related to CSR
3. Discuss Global Ethics and Businesses

3. What is CSR?

4. Definitions and Relationships
• Corporate social responsibility (CSR) is the process by which
businesses negotiate their role in society
• Volunteer actions of a firm that benefit society beyond legal
obligations and direct company interests
• 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

5. Recent Evidence of CSR Interest
• A general Google search turns up over 836 million results to
“Corporate Social Responsibility” and 141 million to
“Corporate Social Responsibility and ethics”
• Journals increasingly “rate” businesses (and NGOs) on socially
responsive criteria:
– Best place to work
– Most admired
– Best (and worst) corporate reputation

6. CSR Pyramid
(Tulder & Mil 2023; Schwartz and Carrol 2003)
https://www.researchgate.net/publication/4883660_The_Pyramid_of_C
orporate_Social_Responsibility_Toward_the_Moral_Management_of_
Organizational_Stakeholders

7. Sustainability demands by diners
M&S love for heritage?

8. Reasons for CSR Activities
• CSR activities are important and even expected by the public
– they are easily monitored worldwide
• CSR activities help organisations hire and retain the people
they want
• CSR activities contribute to business performance

9. Maximise
firm’s profits
to the
exclusion of
all else
Balance
profits and
social
objectives
Do what it
takes to make a
profit; skirt the
law; fly below
social radar
Fight social
responsibility
initiatives
Comply;
do what
is legally
required
Integrate
social
objectives
and business
goals
Lead the industry
and other
businesses with
best practices
Do more than
required; e.g.
engage in
philanthropic
giving
Articulate
social value
objectives
Corporate Social Responsibility Continuum
Freidman
Carol,
Drucker

10. 10

11. Businesses CSR Activities
• Philanthropy
– give money or time in kind to charity
– Integrative philanthropy—select beneficiaries aligned with
company interests
– Examples?
• Philanthropy will not enhance corporate reputation if a
company
– fails to live up to its philanthropic image or
– if consumers perceive philanthropy to be manipulative

12. Integrate CSR Globally
• Incorporate values to make it part of an articulated belief system
McDonald's: “We believe that being a good corporate citizen means
treating people with fairness and integrity, sharing our success with
the communities in which we do business, and being a leader on issues
that affect customers”
• Act worldwide on those values
– Cause-related marketing
– Cause-based cross sector partnerships
• Engage with stakeholders
– Primary stakeholders
– Secondary stakeholders

14. Business Ethics Development
• The cultural context influences organisational ethics
- Some school of thought believe that everyone has their own
ethics – what is considered right or wrong depends on the time,
place, preferences and practices of a group or individual
• Top managers also influence ethics
• The combined influence of culture and top management
influence organisational ethics and ethical behaviors

15. Unethical practices -> unlawful actions
• If bribery is perceived to be a national practice, then most
companies in that society may use bribery
• If a top manager is unethical, then he/she may set a lead that
others follow
• High demands for performance and profitability led Enron
employees first to cut ethical corners and finally to break laws as
well:
According to one Enron insider: "If your boss was [fudging] and you have never
worked anywhere else, you just assume that everybody fudges earnings. Once
you get there and you realized how it was, do you stand up and lose your job? It
was scary. It was easy to get into 'Well, everybody else is doing it, so maybe it isn't
so bad"

16. I always tell the truth even when I lie

17. The Evolving Context for Ethics
• From domestic where ethics are shared
• To international where ethics are not shared, when
companies:
– Make assumptions that ethics are the same
– Ethical tyranny—they adapt to us
– Ethical belief—we adapt to them
• To global which requires an integrative approach to ethics
• NIKE Inc. was "founded on a handshake“ based on trust,
teamwork, honesty and mutual respect

18. Emergence of a Global Business Ethic
• Growing sense that responsibility for righting social
wrongs belongs to all organisations
• Growing business need for integrative mechanisms such
as ethics
– Ethics reduce operating uncertainties
– Voluntary guidelines avoid government impositions
• Ethical conduct is needed in an increasingly
interdependent world—everyone in the same game
• Companies wish to avoid problems and/or be good public
citizens

19. Ways Companies Integrate Ethics
• Top management commitment in word and deed
• Company codes of ethics
• Supply chain codes
• Develop, monitor, enforce ethical behavior
• Seek external assistance

20. External Assistance with Ethics
• Industry or professional codes
• Certification programs, e.g., ISO 9000
• Adopt/follow global codes
• Examples to follow i.e.
– Caux Round Table Principles
– Government Principles
– Good Citizens Principles

21. 21

22. 22
PRINCIPLES FOR GOVERNMENT

23. 23
PRINCIPLES FOR GOOD CITIZENSHIP

24. Reasons for Businesses to Engage in
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

25. 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
– Organizations may hide behind global codes & find
loopholes then use the rules in defense
– Rules can depress innovation and creativity
– Rules are static but globalisation is dynamic

26. Some other points to consider/explore in your own time
-No organisation will tell you that they are strictly a profit-making mechanism
-Deregulation of governance aims to reduce red tape and cost obligations of
organisations, but it also permits non-transparent and unethical operations
-In a deregulated world companies are marketing their CSR strategies to greenwash
their unsustainable activities.
-Without Brexit the UK businesses would have had to obey the labour, banking,
environmental and social legislations of the EU, whereas Brexit implicitly wants to
pursue more US version, where those above and entitlement for maternity,
paternity leave are not as supportive.
-Example: US Private student loan companies are not forced to cancel loans of
students who have been victims of fake universities like the Trump University.
Student loan companies continue to charge interest fees and the law takes years
before it brings such universities to justice

27. References
• Kotler, P., & Lee, N. (2008). Corporate social responsibility: Doing the most good for your
company and your cause. John Wiley & Sons.
• Drucker, P. F. (1984). Converting social problems into business opportunities: The
new meaning of corporate social responsibility. California Management Review (Pre-
1986), 26(000002), 53. Retrieved from
https://hallam.idm.oclc.org/login?url=https://www-proquest-
com.hallam.idm.oclc.org/docview/206322257?accountid=13827
• Parker, B. (2005). Introduction to globalization and business : Relationships and responsibilities (2nd ed.).
London: SAGE