Icebreaker this will Mess With Your Head… 3 MEN GO INTO A HOTEL. THE MAN BEHIND THE DESK SAID THE ROOM IS £30 SO EACH MAN PAID £10 AND WENT TO THE ROOM. A WHILE LATER THE MAN BEHIND THE DESK REALIZED THE ROOM WAS ONLY £25 SO HE SENT THE BELLBOY TO THE 3 GUYS' ROOM WITH £5. ON THE WAY THE BELLBOY COULDN'T FIGURE OUT HOW TO SPLIT £5 EVENLY BETWEEN 3 MEN, SO HE GAVE EACH MAN A £1 AND KEPT THE OTHER £2 FOR HIMSELF. THIS MEANT THAT THE 3 MEN EACH PAID £9 FOR THE ROOM, WHICH IS A TOTAL OF £27 ADD THE £2 THAT THE BELLBOY KEPT = £29. WHERE IS THE OTHER DOLLAR?
Transcript
Icebreaker this will Mess With Your Head…
3 MEN GO INTO A HOTEL.
THE MAN BEHIND THE DESK SAID THE ROOM IS £30
SO EACH MAN PAID £10 AND WENT TO THE ROOM.
A WHILE LATER THE MAN BEHIND THE DESK REALIZED THE ROOM WAS ONLY £25
SO HE SENT THE BELLBOY TO THE 3 GUYS' ROOM WITH £5.
ON THE WAY THE BELLBOY COULDN'T FIGURE OUT HOW TO SPLIT £5 EVENLY BETWEEN 3 MEN,
SO HE GAVE EACH MAN A £1 AND KEPT THE OTHER £2 FOR HIMSELF.
THIS MEANT THAT THE 3 MEN EACH PAID £9 FOR THE ROOM, WHICH IS A TOTAL OF £27
ADD THE £2 THAT THE BELLBOY KEPT = £29.
WHERE IS THE OTHER DOLLAR?
CORPORATE CORPORATE SOCIAL SOCIAL
RESPONSIBILITYRESPONSIBILITY
MA in Human Resource ManagementMA in Human Resource Management
Oliver Parker, MBAOliver Parker, MBA
5th December 20075th December 2007
ContentsContents
We All Want A Better World
Pertamina.com Pertamina.com
telkomsel.com
What is ‘CSR’What is ‘CSR’
Corporate social responsibility is a Corporate social responsibility is a commitment to improve commitment to improve community community well-beingwell-being through discretionary through discretionary business practices and contributions business practices and contributions of corporate resources. of corporate resources. (Kotler)(Kotler)
Why? Why? Drivers for Change…Drivers for Change…
•Increased sales and market share
•Strengthen brand positioning
•Improved corporate image and clout
•Increased ability to attract, motivate, and retain employees
•Decreased operating costs
•Increased appeal to investors and financial analysts
Drivers for Change, or…Drivers for Change, or…
• Preserving the ‘license to operate’Preserving the ‘license to operate’• Building a valid reputationBuilding a valid reputation• Fostering corporate values and human resource goalsFostering corporate values and human resource goals• Meeting the expectation of host communities, activist Meeting the expectation of host communities, activist
groups and governments, as well as of customers, groups and governments, as well as of customers, employees and investorsemployees and investors
• Responding to critical social issues such as education, Responding to critical social issues such as education, poverty and health outside the companypoverty and health outside the company
• Exploring and expanding access to new marketsExploring and expanding access to new markets
• Source: 2001 Boston college - USSource: 2001 Boston college - US
CSR: Three schools of thoughtCSR: Three schools of thoughtNeo-liberal
school(markets provide CSR)
State-led school
“Third sector” school
• CSR product market demand• Labour market demand• Capital market demand
• National governments• International government
• Company membership organisations• Human rights • Educational organisations• For-profit organisations
A combination of all these schools drives “applied” CSR…
Public-private partnerships for applied CSR
CSR: Three possible critiquesCSR: Three possible critiquesNeo-liberal
critique
State-led critique
“Third sector” critique
• Distortions in the firm • Distortion in the economy
• National governments• International government
• New Social Movement?• NGO capture
A combination of all these critiques unmasks “applied” CSR…
site of contestation between public and private spheres
NO!NO!
Agency TheoryAgency Theory““the social responsibility of business is to make as much money the social responsibility of business is to make as much money
as possible for the shareholders, within the rules of the game.” as possible for the shareholders, within the rules of the game.” (Milton Friedman)(Milton Friedman)
• The role of business is to increase profits by legal meansThe role of business is to increase profits by legal means
• The use of resources for greater good will decrease profits or The use of resources for greater good will decrease profits or increases prices or bothincreases prices or both
YesYes
Stakeholder TheoryStakeholder Theory““There exists an implicit or explixcit contract between business and There exists an implicit or explixcit contract between business and
the community in which it operates.”the community in which it operates.”
Cannon (1994)Cannon (1994)
““The concept of an imaginery ‘operating licence’ granted to a The concept of an imaginery ‘operating licence’ granted to a company by the public, which can effectively be suspended or company by the public, which can effectively be suspended or
withdrawn if the company appears to be behaving badly.”withdrawn if the company appears to be behaving badly.”
Royal Society, ‘The Role of Business in a Changing World.’ (1995)Royal Society, ‘The Role of Business in a Changing World.’ (1995)
• Business exists to serve the greater community Business exists to serve the greater community • Business is obligated to use its resources in ways Business is obligated to use its resources in ways
sustainability based upon a economic perspective & continuity
individual authenticity (self-management) and selected/chosen (social) embeddedness
inclusion involvement
transparency accountability
added-value & business proposition
value(s) management
Features of CSRFeatures of CSR
““companies integrate social and environmental concerns in their companies integrate social and environmental concerns in their business operations and in their interaction with their business operations and in their interaction with their
stakeholders on a voluntary basis” stakeholders on a voluntary basis”
(EU Commission, 2001)(EU Commission, 2001)
• BehaviourBehaviour – over and above… – over and above…
• Human ResourcesHuman Resources – cultural issues & human behaviour – cultural issues & human behaviour
HR Role in Ethics & CSRHR Role in Ethics & CSR
• Identify the values of the organisationIdentify the values of the organisation
• Drawing up a Code of EthicsDrawing up a Code of Ethics
• Ethical Behaviour with key stakeholders Ethical Behaviour with key stakeholders (‘psychological; (‘psychological; contract’, CIPD,2003) contract’, CIPD,2003)
• Managing the culture of the organisationManaging the culture of the organisation• Training & developmentTraining & development• Maintaining the ‘Employer- Brand’Maintaining the ‘Employer- Brand’
Codes of PracticeCodes of Practice
• Declaration of InterestDeclaration of Interest• Confidentiality & Accuracy of InformationConfidentiality & Accuracy of Information• CompetitionCompetition• Business GiftsBusiness Gifts• HospitalityHospitality
(CIPS, 2003) (CIPS, 2003)
‘‘Can codes of ethics really produce Can codes of ethics really produce consistent behaviours?’consistent behaviours?’
• Public Interest Disclosure Act 1998Public Interest Disclosure Act 1998
• Example: Example: Piper Alpha Oil Platform, 1988Piper Alpha Oil Platform, 1988– Explosion of oil & gas production facilityExplosion of oil & gas production facility
– 167 persons lost their lives167 persons lost their lives
– Cullen Report: severe shortfalls in safety proceduresCullen Report: severe shortfalls in safety procedures
– Company or managers were never prosecutedCompany or managers were never prosecuted
– Why did this happen?Why did this happen?• Workers fear for jobs for raising safety issuesWorkers fear for jobs for raising safety issues• Might embarrass superiorsMight embarrass superiors
Bristol-Myers SquibbBristol-Myers Squibb
Evaluating Efforts
Develop & Implement Plans
Select initiatives to support
issues
Choosing Social Issues
to Support
Best CSR Practices
So what is…So what is…THE BOTTOM LINE!THE BOTTOM LINE!
• Build trust of stakeholdersBuild trust of stakeholders• More effective management of riskMore effective management of risk
