College of Management

BUSINESS ADMINISTRATION DEPARTMENT

Course Number: BA 314

Module Number: 4
Module Title: Corporate Social Responsibility
Course Facilitators: Mariane Vonne C. Delfin
John Fritz L. Villora
ST
Semester: 1 Semester, A.Y. 2020-2021

GOOD GOVERNANCE
AND SOCIAL
RESPONSIBILITY
Module 4
Corporate Social
Responsibility

At the end of the session, the students must have:

1. Described and explained corporate social responsibility
2. Distinguished between instrumental and social contract approaches to CSR
3. Explained the business argument for “doing well by doing good”
4. Summarized the five driving forces behind CSR
5. Explained the triple bottom-line approach to corporate performance
measurement
Expected Outputs:
1. Companies practicing TBL
2. Identifying carbon footprint

MODULE 4 – Corporate Social Responsibility 1|PAGE

WHAT IS CORPORATE SOCIAL RESPONSIBILITY?
Referred to as corporate citizenship or corporate conscience,
corporate social responsibility (CSR) is defined as the actions of an
organization that are targeted toward achieving a social benefit over
and above maximizing profits for its shareholders and meeting all its
legal obligations.
The above definition assumes that the corporation is operating
in a competitive environment and that the managers of the corporation
are committed to an aggressive growth strategy while complying with
all federal, state, and local legal obligations.
These obligations include payment of all taxes related to the
profitable operation of the business, payment of all employer
contributions for its workforce, and compliance with all legal industry
standards in operating a safe working environment for its employees
and delivering safe products to its customers.
For some, the practice of CSR may have been intentional or in some cases as a result of unexpected media attention.
Once however CSR becomes part of its strategic plan, choices have to be made as to how the company will address this new
element of corporate management.

Other definitions of CSR:

 a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public
 a type of business self-regulation with the aim of being socially accountable
 a management concept whereby companies integrate social and environmental concerns in their business operations and
interactions with their stakeholders
 the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-
Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders

Situations that drove the practice of CSR:

Nike faced an extensive consumer boycott after The New York Times and other media outlets reported abusive labor practices
at some of its Indonesian suppliers in the early 1990s
Shell Oil’s decision to sink the Brent Spar, an obsolete oil rig, in the North Sea led to Greenpeace protests in 1995 and to
international headlines
Pharmaceutical companies discovered that they were expected to respond to the AIDS pandemic in Africa even though it was
far removed from their primary product lines and markets
Fast-food and packaged food companies are now being held responsible for obesity and poor nutrition.
Nestlé, the world’s largest purveyor of bottled water, has become a major target in the global debate about access to fresh water,
despite the fact that Nestlé’s bottled water sales consume just 0.0008% of the world’s fresh water supply

MANAGEMENT WITHOUT CONSCIENCE

Management without conscience often occurs when the company/corporation run their business to make profit for them
and stakeholder.
Many take an instrumental approach to CSR and argue that the only obligation of a corporation is to make profits for its
shareholders in providing goods and services that meet the needs of its customers. Instrumental Approach has the perspective that
the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs
of its customers.
The most famous advocate of this “classical” model is the Nobel Prize–winning economist Milton Friedman. From an
ethical perspective, Friedman argues that it would be unethical for a corporation to do anything other than deliver the profits for
which its investors have entrusted it with their funds in the purchase of shares in the corporation. He also stipulates that those profits
should be earned “without deception or fraud.”
Friedman’s view of the corporate world supports the rights of individuals to make money with their investments (provided
it is done honestly), and it recognizes the clear legality of the employment contract—as a manager, you work for me, the owner (or
us, the shareholders), and you are expected to make as much profit as possible to make our investment in the company a success.

MODULE 4 – Corporate Social Responsibility 2|PAGE

 This position does not prevent the organization from demonstrating some form of social conscience—donating to local
charities or sponsoring a local Little League team, for example—but it restricts such charitable acts to the discretion of the owners
rather than recognizing any formal obligation on the part of the corporation and its management team.
This very simplistic model focuses on the internal world of the corporation itself and assumes that there are no external
consequences to the actions of the corporation and its managers. Once we acknowledge that there is a world outside that is affected
by the actions of the corporation, we can consider the social contract approach to corporate management.
Social Contract Approach is the perspective that a corporation has an obligation to society over and above the expectations
of its shareholders. Originally, the primary focus of the social contract was an economic one. The modern social contract approach
argues that since the corporation depends on society for its existence and continued growth, there is an obligation for the corporation
to meet the demands of that society rather than just the demands of a targeted group of customers. As such, corporations should be
recognized as social institutions as well as economic enterprises.

MANAGEMENT BY INCLUSION
Management by inclusion involves building permeable structures that
allow for input from all levels of an operation and distributed power structures
that push out decisions and solution generation to all levels of the operation, and
more importantly closest to where the challenges exist.
Inclusive Management highlights the fact that many of the decisions
made are influenced by unconscious biases. It is the combination of working
inclusively towards a common goal, making decisions inclusively and ensuring
that all stakeholders understand the wider framework.
Applying this to corporate social responsibility, corporations now do
not operate in an isolated environment. Most acknowledges that their actions
impact their customers, their employees, their suppliers, and the communities in which they produce and deliver their goods and
services.
Recognizing the interrelationship of all these groups leads us far beyond the world of the almighty bottom line, and those
organizations that do demonstrate a “conscience” that goes beyond generating profit inevitably attract a lot of attention. As Jim
Roberts, professor of marketing at the Hankamer School of Business, points out:
I like to think of corporate social responsibility as doing well by doing good. Doing what’s in the best long-
term interest of the customer is ultimately doing what’s best for the company. Doing good for the customer
is just good business.
“Doing well by doing good” seems, on the face of it, to be an easy policy to adopt, and many organizations have started
down that road by making charitable donations, underwriting projects in their local communities, sponsoring local events, and
engaging in productive conversations with special interest groups about earth-friendly packaging materials and the use of more
recyclable materials.

THE DRIVING FORCES BEHIND CORPORATE SOCIAL RESPONSIBILITY

Joseph F. Keefe of New Circle Communications asserts that there are five major
trends behind the CSR phenomenon:
• Transparency: Companies can no longer sweep things under the rug—whatever
they do (for good or ill) will be known, almost immediately, around the world. This can be
attributed to the creation of the internet and government legislation. What companies do for
either the good or the bad will be known almost instantaneous, where in the past companies
have been able to hide things from the citizens.
• Knowledge: With all the information we can find today this has caused the economy
to be strictly information based, we know have more information than ever before at our
disposal. The transition to an information-based economy also means that consumers and
investors have more information at their disposal than at any time in history. They can be more
discerning, and can wield more influence. Consumers visiting a clothing store can now choose
one brand over another based upon those companies’ respective environmental records or
involvement in sweatshop practices overseas.
• Sustainability: We are fast approaching or have already crossed the sustainable
yield thresholds of many natural systems (fresh water, oceanic fisheries, forests, rangelands),
which cannot keep pace with projected population growth. . . . As a result, corporations are
under increasing pressure from diverse stakeholder constituencies to demonstrate that business
plans and strategies are environmentally sound and contribute to sustainable development.
MODULE 4 – Corporate Social Responsibility 3|PAGE
 • Globalization: Globalization is the spread of products, technology, information, and
jobs across national borders and cultures. In economic terms, it describes an interdependence of
nations around the globe fostered through free trade. Globalization represents a new stage of
capitalist development, this time without . . . public institutions [in place] to protect society by
balancing private corporate interests against broader public interests.
• The Failure of the Public Sector: Many people in our societies worldwide have lost
their faith in the government, and arguably expect less from them because of previous promises
that they have failed to keep. With this failure of the public sector, the pressure has greatly
increased to those who own businesses and corporations, to take action for their own social actions
and do what is right for the people.

THE TRIPLE BOTTOM LINE

The triple bottom line was first fully explained by John Elkington in his 1999 book, "Cannibals With Forks: The
Triple Bottom Line of 21st Century Business." The triple bottom line (TBL) aims to measure the financial, social, and
environmental performance of a company over time. The theory holds that if a firm looks at profits only, ignoring people and
the planet, it cannot account for the full cost of doing business.

According to TBL theory, companies should be working simultaneously on these three bottom lines:

 Profit: This is the traditional measure of corporate profit—the profit and loss
(P&L) account. The financial bottom line is the one that all companies share, whether they're
using the triple bottom line or not. When looking at profit from a triple bottom line standpoint,
the idea is that profits will help empower and sustain the community as a whole, and not just
flow to the CEO and shareholders.
 People: This measures how socially responsible an organization has been
throughout its history. Companies that follow the triple bottom line way of doing
business think about the impact their actions have on all the people involved with them.
This can include everybody from farmers supplying raw materials, on up to the CEO of
the company. Everyone's well-being is taken into consideration.
 Planet: This measures how environmentally responsible a firm has been. Triple
bottom line companies take pains to reduce or eliminate their ecological footprint. They strive
for sustainability, recognizing the fact that "going green" may be more profitable in the long run.

BUYING YOUR WAY TO CSR

There are other ways by which companies could also practice corporate social responsibility – even individuals can
also do so. This is by measuring the carbon footprint emissions of an individual and be mindful of it.

So what is carbon footprint? It is the amount of greenhouse gases—primarily carbon dioxide—released into the
atmosphere by a particular human activity. A carbon footprint can be a broad measure or be applied to the actions of an
individual, a family, an event, an organization, or even an entire nation.

How can you calculate your carbon footprint? Although adding up one’s
individual carbon footprint can be difficult, online calculators can do some of the
work, giving a rough estimate of carbon footprint based on the size of household,
the efficiency of appliances, how much you drive or fly, what you eat, and how
much you recycle.

How can you reduce your carbon footprint? Methods of reducing carbon
footprint include driving more-efficient vehicles (or making sure that current
vehicles are properly maintained), taking public transportation, using energy-
efficient appliances, insulating homes to reduce heating and air conditioning costs,
consuming food that doesn't require as much transportation, and eating less meat,
which has a higher carbon footprint than fruits and vegetables. Individuals and
companies can also offset some of their CO2 emissions by purchasing carbon credits, the money from which can go into
projects such as planting trees or investing in renewable energy.

MODULE 4 – Corporate Social Responsibility 4|PAGE

 Republic of the Philippines
CAPIZ STATE UNIVERSITY
PONTEVEDRA CAMPUS
Bailan, Pontevedra, Capiz

College of Management
Module 4: Worksheet 1 in BA 314
Companies Practicing TBL
1st Semester, A.Y. 2020-2021

EXERCISE #1

Name: Course/Yr./Sec.:

It is said that Triple Bottom Line should be the way of the 21st century businesses. As such, I want you
to familiarize yourselves on the different businesses practicing the TBL theory. You may use the internet in
researching for those companies. Submit at least three (3) companies from different industries practicing the
TBL. Content of the output should include the following:
 Brief background of the company
 Their TBL practices
 Impact of TBL practices to the company

You may submit your outputs via the Google Classroom/eClassroom.

MODULE 4 – Corporate Social Responsibility 5|PAGE

 Republic of the Philippines
CAPIZ STATE UNIVERSITY
PONTEVEDRA CAMPUS
Bailan, Pontevedra, Capiz

College of Management
Module 4: Worksheet 2 in BA 314
Identifying Carbon Footprint
1st Semester, A.Y. 2020-2021

EXERCISE #2
Name: Course/Yr./Sec.:

Directions: This exercise would help you determine the approximate number of carbon footprint that you are emitting
based on your day-to-day living and would help you evaluate what you are going to do with the information that you
have. To do so, kindly follow the steps:

Step 1: Go to https://www.nature.org/en-us/get-involved/how-to-help/carbon-footprint-calculator/
Step 2: Fill in the information needed for the carbon footprint calculator
Step 3: Take a screen shot of your total carbon footprint. It should include the total footprint and the breakdown per
category. An example of the screenshot taken is provided below.

Step 4: Do an evaluation on how you are going to take action by answering the following questions:
a. What particular activities/practices that I have should I reduce or eliminate to decrease my carbon footprint?

b. If I could not reduce or eliminate those activities/ practices as I deem it essential, what will I do instead?

Step 5: Submit a copy of the screenshot and your answers to step 4.

MODULE 4 – Corporate Social Responsibility 6|PAGE
 Republic of the Philippines
CAPIZ STATE UNIVERSITY
PONTEVEDRA CAMPUS
Bailan, Pontevedra, Capiz

College of Management
Module 4: Worksheet 3 in BA 314
Doing Essays
1st Semester, A.Y. 2020-2021

EVALUATION: ESSAY

Name: Course/Yr./Sec.:

Directions: Analyze the following questions carefully. Write your answers on the space provided after each
question.

Discussion Questions:
1. Why do you think it is important for companies to practice corporate social responsibility? Defend your
answer.
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________
2. Profit or CSR? Explain why.
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________
3. Express your views on the business argument “Doing well by doing good.”
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________

MODULE 4 – Corporate Social Responsibility 7|PAGE

Additional Readings and References

Additional Readings:
 “Why CSR? The Benefits of Corporate Social Responsibility Will Move You to Act” by Devin Thorpe (May 8, 2013).
Retrieved from Forbes: https://www.forbes.com/sites/devinthorpe/2013/05/18/why-csr-the-benefits-of-corporate-social-
responsibility-will-move-you-to-act/#40d6344d65a3
 https://www.tutor2u.net/business/reference/csr-elkingtons-triple-bottom-line
References:

(2020). Retrieved from CourseHero: https://www.coursehero.com/file/p6fod3d/Management-without-conscience-often-occurs-when-the-

company-corporation-
run/#:~:text=Management%20without%20conscience%20often%20occurs%20when%20the%20company%2C%20corporation%20run
,unhealthy%20agents%20for%20the%20

Anderson, A. (2011, June 22). Management by Inclusion: Which comes first, high quality leadership or high quality management? Retrieved from
Management Innovation Exchange: https://www.managementexchange.com/hack/management-inclusion-which-comes-first-high-
quality-leadership-or-high-quality-management

Chen, J. (2020, September 17). Corporate Social Responsibility. Retrieved from Investopedia: https://www.investopedia.com/terms/c/corp-
social-responsibility.asp

Driving Forces Behind CSR. (2020). Retrieved from Corporate Social: https://corporatesocialresponsibility4.weebly.com/driving-forces.html

Ghillyer, A. W. (2018). Business Ethics Now, Fifth Edition. New York: McGraw-Hill Education.

Inclusive Management: How to Implement an Inclusive Culture. (2017, July 24). Retrieved from Marshall e-Learning Consultancy:
https://marshallelearning.com/blog/inclusive-management-2/

Kenton, W. (2020, July 27). Triple Bottom Line (TBL). Retrieved from Investopedia: https://www.investopedia.com/terms/t/triple-bottom-
line.asp

Kopp, C. M. (2020, April 30). Globalization. Retrieved from Investopedia: https://www.investopedia.com/terms/g/globalization.asp

Mind Tools Content Team. (2020). The Triple Bottom Line: Measuring Your Organization's Wider Impact. Retrieved from MindTools:
https://www.mindtools.com/pages/article/newSTR_79.htm

Schooley, S. (2020, June 26). What is Corporate Social Responsibility? Retrieved from Business New Daily:
https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html

What is Carbon Footprint? (2020). Retrieved from takepart: http://www.takepart.com/flashcards/what-is-a-carbon-

footprint/index.html#:~:text=A%20carbon%20footprint%20is%20the%20amount%20of%20greenhouse%20gases%E2%80%94primar
ily,or%20even%20an%20entire%20nation.

What is CSR? (2020). Retrieved from United Nations Industrial Development Organization: https://www.unido.org/our-focus/advancing-
economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-responsibility-market-
integration/what-csr

Image Sources:
https://www.nicva.org/resource/guest-post-tapping-into-corporate-social-responsibility-csr
http://www.takepart.com/flashcards/what-is-a-carbon-
footprint/index.html#:~:text=A%20carbon%20footprint%20is%20the%20amount%20of%20greenhouse%20gases%E2%80%94primarily,or%20
even%20an%20entire%20nation.
https://sustain.wisconsin.edu/sustainability/triple-bottom-line/
https://www.boardeffect.com/blog/balancing-board-transparency-privacy/
https://thriveglobal.com/stories/knowledge-trap-wisdom-understanding-truth-misleading-action-growth/
https://www.pearsoned.com/the-importance-of-sustainability/
https://www.magzter.com/article/Business/Legal-Era/Liberalization-Globalization
https://philmckinney.com/should-one-government-encourage-innovation-in-another-country/
https://medium.com/cultivate-ai/how-to-create-better-and-more-inclusive-management-in-silicon-valley-74aa1fe45494
https://www.cagmc.com/accounting-for-corporate-social-responsibility-csr-expenditure/

MODULE 4 – Corporate Social Responsibility 8|PAGE