CORPORATE SOCIAL RESPONSIBILITY (CSR) AND ETHICS

Chapter 15 Lecture 1

Definitions and Relationships

Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society In the business world, ethics is the study of morally appropriate beha iors and decisions, e!amining what "should be done# $lthough the two are lin%ed in most firms, CSR acti ities are no guarantee of ethical beha ior

Recent E idence of CSR Inte!est

$n Internet search turns up 15,&&& plus response to 'corporate citi(enship# )ournals increasingly 'rate# businesses (and *+,s) on socially responsi e criteria.est place to wor% /ost admired .est (and worst) corporate reputation

Reasons fo! CSR Acti ities

CSR acti ities are important to and e en e!pected by the public
$nd they are easily monitored worldwide

CSR acti ities help organi(ations hire and retain the people they want CSR acti ities contribute to business performance

Corporate Social Responsibility Continuum

2o more than re5uired3 e6g6 engage in philanthropic gi ing Integrate social ob1ecti es and business goals

/a!imi(e firm0s profits to the e!clusion of all else

4ight social responsibility initiati es

.alance profits and social ob1ecti es

2o what it ta%es to ma%e a profit3 s%irt the law3 fly below social radar

Comply3 do what is legally re5uired

$rticulate social alue ob1ecti es

Lead the industry and other businesses with best practices

CSR a!e "!o#nded $% Opposin& O$'ecti es ((a)i*i+e P!ofits to Balance P!ofits ,ith Social Responsi$ilit%) and so Acti ities Ran&e -idel%
2o what it ta%es to ma%e a profit3 s%irt the law3 fly below social radar 4ight CSR initiati es Comply with legal re5uirements 2o more than legally re5uired, e6g6, philanthropy $rticulate social (CSR) ob1ecti es Integrate social ob1ecti es and business goals Lead the industry on social ob1ecti es

B#sinesses CSR Acti ities

7hilanthropy
gi e money or time or in %ind to charity Integrati e philanthropy8select beneficiaries aligned with company interests

7hilanthropy will not enhance corporate reputation if a company

fails to li e up to its philanthropic image or if consumers percei e philanthropy to be manipulati e

Inte&!ate CSR "lo$all%

Incorporate alues to ma%e it part of an articulated belief system $ct worldwide on those alues
Cause9related mar%eting Cause9based cross sector partnerships

:ngage with sta%eholders

7rimary sta%eholders Secondary sta%eholders

B#siness Ethics De elop*ent

;he cultural conte!t influences organi(ational ethics ;op managers also influence ethics ;he combined influence of culture and top management influence organi(ational ethics and ethical beha iors

The E ol in& Conte)t fo! Ethics

4rom domestic where ethics are shared ;o international where ethics are not shared when companies/a%e assumptions that ethics are the same :thical absolutism8they adapt to us :thical relati ism8we adapt to them

;o global which re5uires an integrati e approach to ethics

E*e!&ence of a "lo$al B#siness Ethic

+rowing sense that responsibility for righting social wrongs belongs to all organi(ations +rowing business need for integrati e mechanisms such as ethics
:thics reduce operating uncertainties <oluntary guidelines a oid go ernment impositions

:thical conduct is needed in an increasingly interdependent world8e eryone in the same game Companies wish to a oid problems and=or be good

-a%s Co*panies Inte&!ate Ethics

;op management commitment in word and deed Company codes of ethics Supply chain codes 2e elop, monitor, enforce ethical beha ior See% e!ternal assistance

E)te!nal Assistance ,ith Ethics

Industry or professional codes Certification programs, e6g6, IS, >&&& $dopt=follow global codes
Cau! Round ;able 7rinciples

Reasons fo! B#sinesses to En&a&e in De elop*ent of a "lo$al Code of B#siness Ethics

Create the same opportunity for all businesses if there are common rules Le el the playing field ;hey are needed in an interconnected world ;hey reduce operating uncertainties If businesses don0t collaborate, they may not li%e what others de elop

.o#! Challen&es to a "lo$al Ethic

+lobal rules emerge from negotiations and will reflect alues of the strong +lobal rules may be iewed as an end rather than a beginning Rules can depress inno ation and creati ity Rules are static but globali(ation is dynamic