Slide- CH 7

• Corporate social responsibility (CSR) is the way a corporation achieves a balance among its economic, social, and environmental responsibilities in its operations to address shareholder and other stakeholder expectations
• Key elements of CSR include:

  • Corporations have responsibilities beyond the production of goods and services
  • Responsibilities involve helping to solve social problems, especially those they have helped create
  • Corporations have a broader constituency than just shareholders alone
  • Corporations have impacts that go beyond simple marketplace transactions
  • Corporations serve a wider range of human values than can be captured by a sole focus on economic values
• The basic idea of CSR is that business and society are interwoven rather than distinct entities, with expectations placed on business due to its roles as an institution, corporation, and individual managers who are moral actors within the corporation
• The CSR debate includes arguments for involvement such as corporations being part of an interdependent "system" within society, preventing public criticism, and turning social problems into opportunities, as well as arguments against involvement like profit maximization being the primary purpose of business and social policy being the role of government, not business
• Managers have different motivations when responding to sustainability, resulting in different sustainability management initiatives categorized as reactionary, reputational, responsible, and dialogue-based
• Three categories of social responsibility theories include:

  • Amoral view: traditional view of business as merely profit-making entity
  • Personal view: corporations viewed as collectives that act as individuals and can be held responsible for their actions
  • Social view: corporations are social institutions in society with social responsibilities
• Carroll's pyramid of CSR (1991) depicts four kinds of social responsibility in a pyramid - economic responsibilities at the bottom, followed by legal, ethical, and philanthropic responsibilities higher up
• Contemporary CSR concepts include:

  • Corporate sustainability (CS)
  • Reputation management
  • Social impact management
  • Triple bottom line (TBL)
• Corporate citizenship is when a corporation demonstrates that it takes into account its complete impact on society, environment, and economic influence, providing business benefits in areas like reputation management, risk profile, employee relations, and operational efficiency
• The VBA model integrates and unifies five common frameworks based on three core concepts: value, balance, and accountability, to avoid confusion and provide a proper role of business in society