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ANKMFedEx

Corporate Social Responsibility ProgramAudit

By: Abiola Are, Bashiruddin Ataullah, Kathrin Auzinger-Hotzel, Michael Bratley

CSR Definition

CSR is not: Ethics, Philanthropy and Public Relations

General definition: A set of actions a company takes to improve, maintain, or mitigate a company’s impact on society and the environment while increasing value.

CSR deals with role of business in society

History of CSR CSR beginnings span centuries

CSR theory developed in 1930’s Chester Barnard Howard R. Bowens

Rise of Globalization & Multinational Corporations effect in 1960’s, early 1970’s H.L. Johnson’s “Utility Maximization” Milton Friedman’s CSR outlook

Contemporary CSR theorists’ views Combine opposing views of profit maximization and social responsibility CSR Four Faces: economic, legal, ethical, and philanthropic

Importance of CSR Component of corporate strategy to guide corporate action Influences and leverages environment to create value Motivates employees by addressing stakeholders and shareholders

Triple Bottom Line People, Planet, Profit Value-driven CSR quantitatively focuses success on social, ecological, and

economic lines of operation

CSR’s Three Paths Provide products and services that improve community quality of life Invests profits into social and environmental initiatives Distinguish company by how it operates

FedEx CSR policy foci (5) Ethics, workplace and diversity initiatives, environment, and philanthropy

Importance of CSR & FedEx’s CSR Policy

Ethics FedEx intent to create high business ethics

Mission Statement

Corporate governance protocol Code of Business Conduct and Ethics (CBCE) Whistleblower policies Alert Line

Governance hierarchy Independent Board of Directors Committee Charters (4)

Audit, Compensation, Information Technology Oversight, Nominating & Governance

Workplace & Diversity Initiatives

Employee Recognition Programs Five Star [enhanced service and profitability through teamwork] Bravo Zulu [above and beyond job expectations] Purple Promise [deliver superior customer service] Humanitarian Award [community service] CEO Safety Award [contribute to operational safety]

People-Service-Profit (P-S-P) Philosophy

Survey-Feedback-Action (SFA) Program

Health Risk Reduction and Cost Reduction Program Twelve employee wellness initiatives

Official Diversity Mission Statement and Corporate Diversity Council

Environment FedEx stated priority: Provide global connections while

minimizing its environmental impact

Main focus areas (3) Conservation

All electric delivery vehicles and commercial hybrid trucks Route optimization Extensive recycling program

Alternate energy Solar and green power Drive train configurations Hybrid diesel/gasoline-electric

Industry leadership

Philanthropy Philanthropic investment focus (3)

Emergency and disaster relief Transporting aid Funding disaster preparedness education initiatives

Child pedestrian safety Safe Kids Walk This Way program

Environmental sustainability EarthSmart, EarthSmart Outreach, EarthSmart@Work

Supports Red Cross and Salvation Army Employee volunteers Purchased 11 Emergency Services Response Units Free shipping of emergency supplies $1 million pledge to Japan disaster relief

Evaluation FedEx engages in variety of CSR initiatives

Incidental/responsive: Japan and Haiti relief efforts Continuous: ORBIS International, Red Cross, Conservation

International Internal: EarthSmart

Evaluation: Internal: FedEx annual CSR report External:

Recognition and awards Ratings and indices

Warning for FedEx Discretionary, strategic effort wins UPS surpasses FedEx in many ways

Recommendation Porter’s concept: “strategic CSR”

Aligns CSR with business goals – transforming from business cost to business strategy

Will leverage core competencies Requires mapping social opportunities Categorizing and prioritizing social issues

Improve annual CSR report Move beyond statistics and stories Include impact analysis and quantitative ROI assessments Understand CSR and financial performance are correlated

Conclusion CSR:

Will become increasingly important to competitive success Can be more than just an operating expense Can mitigate market/competitive risk

Strategic CSR: Promotes social welfare Combines goals of profit maximization and social responsibility

into joint corporate strategy Satisfies shareholders and stakeholders

Combining strategic CSR and effective reporting will improve outcomes and increase shareholder value