CORPORATE SOCIAL

RESPONSIBILITY
CHAPTER 6
 LEARNING OBJECTIVES:

 Explain the concepts of corporate social responsibility.

 Elucidate the basic premises, arguments for and against CSR.

 Reason out on the need of a CSR initiative.

 LEARNING OBJECTIVES:

 Enumerate and discuss the ethical decision making process.

 Describe the issues considered in social screening of

investments.

 Exhibit understanding of corporate greenwashing.

What is CSR?
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the eighteenth century, the greatest

economist and philosopher Adam Smith
CSR HISTORY articulated the traditional or classical
economic model of business.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 This model suggested that the needs and

CSR HISTORY
desire of the society could be best be met
by free-for-all interactions of individuals
and organizations in the marketplace.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the century after Adam Smith, many of

his principles advocated were born out as
CSR HISTORY
the introduction of new technologies
allowed for more efficient production of
goods and services.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the late 19th century, many believed in

CSR HISTORY and practice a philosophy that called “Social
Darwinism.” in simple form, is the idea that
the principles of natural selection and
survival of the fittest are applicable to
business and social policy.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 Around the beginning of the 20th century a

backslash against the large corporations.
CSR HISTORY They were criticized as being to be too
powerful and for practising anti-social and
anti-competitive practices.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 Laws such as Sherman Antitrust Act were

enacted to rein in the large corporations and
CSR HISTORY to protect employees, consumers and society
at large.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the 1960s and 1970s, the civil right

movement consumerism, and
CSR HISTORY environmentalism affected society’s
expectations of business.
 ARGUMENTS FOR AND AGAINST
CORPORATE SOCIAL RESPONSIBILITY

Arguments For: Arguments Against:

• Public expectation • Violation of profit
• Improved financial performance
maximization
• Ethical obligations
• Enhanced brand image & reputation • Dilution of purpose
• Better environment • Costs
• Reduce regulatory oversight &
government control • Too much power
• Increased ability to attract and retain • Lack of skills
employees
• Stockholder’s interest
• Lack of accountability
• Easier access to capital/ resources • Lack of broad public support
• Risk management
 BASIC PREMISES OF CSR
Business Leaders

investors
Consumers
Employees

Local communities
Media
Regulators
 RELEVANCE OF CSR

 Changing social expectations

 Competitive labor markets

 RELEVANCE OF CSR

 Disclosure demands by stakeholders

 Dwindling government role
 Globalization
 Pressure from investors
 Supplier relations
 Wealth and vulnerability
 ETHICAL LEADERSHIP

 Is a leadership that is concerned in leading in a manner that

respects the rights, dignity, and stakes of others.
 Focuses on how leaders employ their business and political
power in the decisions they make and actions they engage into.
ETHICAL DECISION MAKING PROCESS IN
ORGANIZATIONS
CSR Principles
The Option of Doing
Nothing

Withdraw

Be Conscious of
Be An Archivist Long-Term Effects
ETHICAL DECISION MAKING PROCESS IN
ORGANIZATIONS
CSR Principles

Ask Around

Be Comprehensively
Consider Legalities Sensitive
and Ethics
ETHICAL DECISION MAKING PROCESS IN
ORGANIZATIONS
CSR Principles

Do Not Be A Dangerous
Find a Win-Win Solution
“Alpha Male”
 MYTHS ABOUT ORGANIZATIONAL
ETHICS

 Being ethical is easy

 Being ethical is not part of doing business

 Being ethical brings no benefit

 WHAT ETHICS IS NOT

 Ethics is not the same as feelings

 Ethics is not religion

 Ethics is not just following the laws

 Ethics is not following culturally accepted norms

 Ethics is not science

 CORPORATE CITIZENSHIP

Refers to the acceptance by a business of a conscious effort in focusing and in

satisfying the economic, legal, ethical, philanthropic and social responsibilities
and other acts expected from the corporations to do to its stockholders.
ELEMENTS OF CORPORATE CITIZENSHIP

• Commitment to quality

• Ethical legal compliance

• Stewardship and governance

• Superior employee relation

• Social advocacy

• Environmental advocacy

• Community involvement
PHILANTHROPY AND SOCIAL
INITIATIVES

What is
Philanthropy?
 BENEFITS OF CORPORATE
PHILANTHROPY
Benefits to the
Benefits to Business Benefits to stakeholders
community
 Enhance corporate  Build employee  Improves quality of
reputation morale and life of the community
 Improves relations engagements members
with the government,  Enlarge sense of  Provides human and
the community and community and social capital resources to
the key stakeholders obligations non-profit
 Supports a company’s  Develops future organizations
strategic business workforce
goals contributing to a
sustainable company
SOCIAL SCREENING OF INVESTMENTS

 “Scarce-off from” Strategy

 Impact Mitigation

 Whoever Is The Best

 Main or Derivative Connections

 CORPORATE GREENWASHING

It refers to the practice of companies characterized by deceptively making it

appear that their products, services and policies are environmentally friendly
by projecting cost cuts as reduction in use of resources or investments in
“Green Concerns” like in areas of ecology and environment.
 GREENWASHING SINS

 Sin of the hidden trade-off

 Sin of no proof
 Sin of vagueness
 Sin of irrelevance
 Sin of fibbing
 Sin of lesser of two evils
 The sin of worshiping false labels
 WAYS ON HOW TO SPOT
GREENWASHING

 Poor use of scientific facts.

 The use of buzz words like “carbon intensity”, “sustainable development”,
“carbon offsets” and “clean technology.”
 Look at the environmental label on the product.
 Never abandon common sense.
 Look out for negligible green claims.