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Introduction to

CSR

Corporate Social Responsibility

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p p y

•Definition of CSR

•Meaning of CSR

•Should corporations be involved in CSR?

•Two views of CSR : Shareholder or Stakeholders

•The pros and cons of CSR

Chapter overview:

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CORPORAT !!!! The corporation" a legal entit# created withob$ective of profit%

SOC&A' !!!! The co((unit# of people a(ong who( and

who( the corporation runs its business and depends on for

its (onetar# returns%

RSPO)S&*&'&T+ !!!! The trait of being answerable

Corporate Social Responsibility

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,Co(panies with a defined

corporate co((it(ent to

ethical principles do better financiall# than co(panies that don-t.%

Definition of CSR

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,CSR is continuing co((it(ent to behave

ethicall# and contribute to econo(ic

develop(ent while i(proving the /ualit# of

life of the workforce and their fa(ilies as well

as the local co((unit# and societ# at large.%

What is CSR?

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,Onl# social !welfare!pro(oting actions

perfor(ed over and above the econo(ic and

legal re/uire(ents of business in a countr#

/ualif# as corporate social responsibilit#%

What is CSR?

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,The idea that business has a dut# to serve

societ# in general as well as the financial

interests of stockholders.%

Pearce & Robinson

What is CSR?

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Meaning of CSR

CSR is the integration by companies of social andenvironmental concerns in their business operations

and in their interaction with their stakeholders on a

voluntary basis

! "he concept of social responsibility means going

beyond the fulfillment of legal re#uirements by

investing more in human capital$ the environment$ and

relations with stakeholders

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Meaning of CSR

%t is a voluntary instrument$ but must be implemented

reliably so that it fosters trust and confidence amongstakeholders

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•Customers and clients are influenced by a companys reputation in social and environmental areas•"he e(plo#(ent market is competitive and good recruits want

to work for and stay with companies that care•Social performance increasingly influences investors- decisions$

as the ethical investment market grows evermore #uickly•CSR enables the strategic (anage(ent of internal and e'ternal

risks in social as well as environmental areas•('isting sociall# responsible actions become more visible and

are better communicated•Social and environmental responsibility has been demonstrated

to reduce operating costs

0h# is CSR i(portant?

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People ! Planet ! Profit% 

•)uman resources•*ork and life balance

•+ther fundamental rights at work•(nvironmental issues•Public safety and health ,including product

safety-•Profitability and productivity

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"wo views of corporate socialresponsibility

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•"he only social responsibility of business is to

create shareholder wealth

• Corporate management cannot decide whatis in the social interest• "he costs of social responsibility which do not

increase the value of stock$ will be passed on

to consumers

The shareholder view

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• .ll customers and employees are treated with

dignity

• Relationships with suppliers must be basedon mutual trust• /elief in fair economic competition• /usiness can contribute to social reform and

honor human rights

The (ultiple stakeholders view

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Should Corporations be involved in CSR0

Classical view: *ehavioral view:

1ew trends would so

thoroughly undermine

the very foundations ofour free society as the

acceptance by corporate

officials of a social

responsibility other thanto make as much money

for their shareholders as

they possibly can2

3%n addition to making a

profit$ business should help

to solve social problems 

whether or not business

helps to create those

problems even if there is

probably no short4runor long4run profit potential2

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 .rguments for CSR

•/alancing Corporate power with Corporate

responsibility• CSR as Duty

•Discouraging the creation and imposition of5overnment Regulation•1ocusing on Social problems

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 .rguments against CSR

Stakeholders bear the costs of corporate social actions

,shareholders$ employees and consumers- which affect a 3

corporation6s operating efficiency and weaken competitive

position and advantage2

Mismatch of the roles and e'pectations between the

organi7ation and society

"he prospect of corporations becoming powerful 8 e'ercising

considerable power over society

Management trained in functional areas of management

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Carroll’s four part model of Corporate Social Responsibility