CORPORATE SOCIAL

RESPONSIBILITY
Basics
Definition
Reasons to carry out CSR
Brief history
CSR Models
Process
Manager’s responsibility towards society
Managerial Ethics

Content taken from:

Principles of Management
Sana Zehra Pravin Durai
Questions

1. What are some of the most inspirational managers/business leaders?

2. What makes them great?

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Corporate Social Responsibility

CSR at Apple

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Reasons to carry out CSR

Realization – labour, capital, technology and physical resources are all supplied by society
Therefore, managers may fulfill social obligations for reasons of:
- legal compulsion
- popular social pressures
- genuine concern for the well-being of the society

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Classifying organizations on the basis of their social
responsibility
• Legal and • Legal and
responsible irresponsible

e.g. liquor
e.g. TATA
companies

e.g. dyeing
Greenpeace units in
activists Tirupur,
Tamil Nadu
• Illegal and • Illegal and
responsible irresponsible

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Definitions

• “Social responsibility can be defined as a business intention beyond its legal and
economic obligations to do the right things and act in ways that are good for society.” —
R. A. Bucchoiz.
• “Corporate social responsibility is about the way businesses take account of their
economic, social and environmental impacts in the way they operate—maximizing the
benefits and minimizing the downsides.” —Nigel Griffiths.

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Brief history of CSR
19th century
18th century
Industrial Revolution
Adam Smith insisted that
marketplaces participants
should be just and honest in
their interactions
20th century
Advent of technologies
created large number of
jobs.
Big industrialists began to
give back to society which
they benefitted from
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Formalization of CSR
First course on Ethics
offered at Harvard Busines
school in 1915
Labor rights, occupational
health/safety, women’s
rights, consumer protection,
child welfare
21st century
CSR is a distinctive
movement and a global
issue.
Ecological concerns,
poverty, population
growth, pollution,
corruption, illiteracy – all
part of CSR agendas
Models of CSR

1. Socio-economic model
2. Stakeholders’ model, and
3. Triple bottom-line model

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Socio-economic Model

• Profit is the only criterion for measuring the efficiency of business

• The only responsibility of any business is to supply goods and services to the society at a
profit.

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Stakeholders’ Model

• Views business as a part of the larger society

• Besides profit, businesses must serve the needs of market and non-market stakeholders
• Market stakeholders
• E.g. employees, shareholders, suppliers, customers and lending agencies

• Non-market stakeholders
• General public, NGOs, media, activists, environmentalists and governments.

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Triple Bottom Line

• Success is measured on financial, environmental and social performance

• Business objectives must be shared along the 3 dimensions

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CSR Process – 3 stages

Commitment Strategy Development Implementation &

• Firm’s philosophy and
attitude towards society
• Vision / mission
• External environment – to
choose the specific issues to
be addressed
• Strategies to fulfill
commitment
• Medium and long term
plans with specific targets
• Mobilize the resources
Control
• Communicating plans to
stakeholders
• Involvement of stakeholders
• Exercise control to manage
resources allocated for CSR

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Examples

Discussion

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Managers’ responsibility towards society

1. Towards owners
2. Towards employees
3. Towards consumers
4. Towards governments
5. Towards the general public
6. Towards nature

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Managers’ responsibility towards owners

1. Capital protection
2. Profit maximization
3. Business stability and growth
4. Access to accurate information
5. Equality in treatment

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Managers’ responsibility towards employees

1. Job security
2. Adequate remuneration
3. Productive training
4. Objective performance evaluation
5. Safe and healthy working conditions

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Managers’ responsibility towards consumers

1. Products in desired quality and quantity

2. Products at fair and just prices
3. Efficient after sales services
4. Prompt response for their complaints

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Managers’ responsibility towards governments

1. Observing rules and regulations

2. Paying taxes and duties
3. Furnishing true information

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Managers’ responsibility towards the general public

1. respect the sentiments, beliefs, values and ethos of the people in the community
2. care for their health and safety

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Managers’ responsibility towards nature

• Responsible release of pollutants

• Avoid activities that harm flora, fauna, animal and human life
• Avoid activities that result in destruction of heritage structures

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Challenges in CSR implementation

• Absence of active community involvement in CSR activities – lack of communication, awareness

• Absence of local capacities and well-organized NGOs – lack of trained workforce and infrastructure
• Lack of transparency – reluctance of NGOs to disclose information
• Perceptual differences between NGOs and companies
• Lack of clear-cut guidelines and policies – by the government
• Absence of unified approach in CSR implementation – duplication of activities and wastage of
resources
• Desire to gain quick popularity

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Green Management

Managerial practices that help in the preservation of environment. Green management

requires managers to continuously innovate:
1. Products
2. Processes
3. Practices (e.g. TQM)

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Managerial Ethics

“Ethics is a set of moral principles that govern the action of an

individual or group.” —Appleby”

Managerial ethics is the “set of standards that dictate the conduct

of the managers when performing their job”

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Managerial Ethics

• They are different from legal rules

• They regulate internal and external behavior during decision making
• Ethical codes help managers evaluate the ethical quotient of their decisions
• They differ from organization to organization

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Managerial Ethics

Principle-based ethical Policy-based ethical

codes codes

Basic values Procedures for specific ethical situations

Company’s responsibility Conflicts of interest

Quality of products Ethical dilemmas

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Ethical dilemmas in managerial decisions

Decisions are evaluated along 4 main dimensions:

1. Instrumental dimensions which involve cost−benefits analysis
2. Relational dimensions which involve the analysis of the impact of the decisions on the
future relationship with the stakeholders
3. Internal dimensions that focus on the impact of decision on internal capabilities of the
firm
4. Ethical dimensions which refer to the evaluation of the ethical dimensions of the
decisions, i.e. whether the decisions are good or bad, right or wrong, etc.

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