Mod.4

• Corporate Social Responsibility (CSR)


  A form of corporate self-regulation integrated into a business model, also referred to as corporate citizenship or socially responsible business
• CSR


  • Organizations that embrace CSR hold themselves accountable to others for their actions and seek to make a positive impact on the environment, their communities, and the larger society
  • CSR may include philanthropic efforts such as charitable donations or programs that encourage employee volunteerism by providing paid time off for such activities
  • Many organizations seek to have an even greater impact through CSR initiatives that integrate social values into operational and business strategies
• The interest in CSR has grown with the spread of socially responsible investing, the attention of nongovernmental organizations (NGOs), and ethics training within organizations
• Recent incidents of ethics-based corporate scandals have also increased awareness of CSR
• Socially responsible investing


  Investing in companies that have a positive social impact
• Nongovernmental organizations (NGOs)


  Organizations that are independent of government involvement
• Ethics training


  Training within organizations to promote ethical behavior and decision-making
• Corporate social responsibility may include philanthropic efforts such as charitable donations or programs that encourage employee volunteerism by providing paid time off for such activities
• Many organizations seek to have an even greater impact through CSR initiatives that integrate social values into operational and business strategies
• Corporate Social Responsibility (CSR)


  A form of corporate self-regulation integrated into a business model
• CSR


  • Interest has grown with the spread of socially responsible investing
  • Interest has grown with the attention of nongovernmental organizations (NGOs)
  • Interest has grown with ethics training within organizations
  • Recent incidents of ethics-based corporate scandals have also increased awareness of CSR
• Organizations that embrace CSR

  Hold themselves accountable to others for their actions and seek to make a positive impact on the environment, their communities, and the larger society
• CSR may include

  • Philanthropic efforts such as charitable donations
  • Programs that encourage employee volunteerism by providing paid time off
• CSR initiatives


  Integrate social values into operational and business strategies
• Organizations promote their CSR efforts

  As a way of shaping public perceptions, attracting customers, and building good will with stakeholders
• Public companies often report CSR policies and activities in their annual reports; some create separate documents or use their websites to describe and publicize their CSR-related efforts
• Measures of CSR performance


  Amount of expenditures or investment, degree of executive engagement, impact of implementation, and CSR outcomes relative to objectives
• The scale and nature of the benefits of CSR to an organization can be difficult to quantify
• Benefits of CSR

  • May result in higher or lower costs, but directly linking CSR initiatives to revenue increases is not always possible
  • Can improve employee recruitment and retention efforts
  • Can be a means of managing risk
  • Can provide brand differentiation
• Some business critics of CSR argue that too often it competes with a duty to maximize shareholder value
• Others cast the CSR efforts of companies as "greenwashing" efforts to draw attention away from unpopular practices such as polluting the environment or outsourcing jobs overseas
• Corporations, by their sheer size

  Affect their local, regional, national, and global communities
• Positive impacts of corporations

  Providing jobs, strengthening economies, or driving innovation
• Negative impacts of corporations

  Doing damage to the environment, forcing the exit of smaller competitors, and offering poor customer service
• Corporate Social Responsibility (CSR)

  A philosophy in which the company's expected actions include not only producing a reliable product, charging a fair price with fair profit margins, and paying a fair wage to employees, but also caring for the environment and acting on other social concerns

  
• Many corporations work on prosocial endeavors and share that information with their customers and the communities where they do business
• CSR, when conducted in good faith, is beneficial to corporations and their stakeholders
• CSR in its ideal form

  Focuses managers on demonstrating the social good of their new products and endeavors
• CSR can be framed as a response to the backlash corporations face for a long track record of harming environments and communities in their efforts to be more efficient and profitable
• Stakeholder communities left out of or directly harmed by the economic revolution have demanded that they be able to influence corporate and governmental economic practices to benefit more directly from corporate growth as well as entrepreneurship opportunities
• The trend to adopt CSR may represent an opportunity for greater engagement and involvement by groups mostly ignored until now by the wave of corporate economic growth reshaping the industrialized world
• Sustainability

  The practice of preserving resources and operating in a way that is ecologically responsible in the long term
• The Dow Jones Sustainability Indices serve as benchmarks for investors who integrate sustainability considerations into their portfolios
• There is a growing awareness that human actions can, and do, harm the environment, and that destruction of the environment can ultimately lead to reduction of resources, declining business opportunities, and lowered quality of life
• Enlightened business stakeholders realize that profit is only one positive effect of business operations, and that other ethical contributions that stakeholders could lobby corporate management to make include establishing schools and health clinics in impoverished neighborhoods and endowing worthwhile philanthropies in the communities where companies have a presence
• Other stakeholders, such as state governments, NGOs, citizen groups, and political action committees in the United States apply social and legal pressure on businesses to improve their environmental practices
• The California Transparency in Supply Chains Act requires firms to report on the working conditions of the employees of their suppliers
• As instances of this type of pressure on corporations increase around the world, stakeholder groups become simultaneously less isolated and more powerful
• Triple Bottom Line (TBL)

  A measure that forces businesses to consider not just their financial well-being, but also their social and environmental impacts
• The three components of the triple bottom line - economic, social, and environmental - are interrelated