GGSR

• Klaus Schwab: 'Corporate social responsibility is measured in terms of businesses improving conditions for their employees, shareholders, communities, and environment. But moral responsibility goes further, reflecting the need for corporations to address fundamental ethical issues such as inclusion, dignity, and equality.'
• Corporate social responsibility (CSR)

  The most recent practice of companies in taking active participation in social concerns and community matters
• CSR


  • Requires companies to behave as good corporate citizens
  • In the conduct of their operations, they must avoid causing environmental pollution or exhausting limited natural resources
• Milton Friedman's view


  The social responsibility of business is to increase its profits
• Edward Freeman's view


  Stakeholders are those individuals or groups who can affect or are affected by any activities of the company
• Corporate social responsibility


  Extends beyond philanthropy and includes legal obligations, social, environmental and ethical concerns into the business process
• Triple bottom line approach

  Emphasizes a company's guarantee to operate its business in an economically, socially and environmentally sustainable manner
• Key components of CSR

  • Corporate governance
  • Business ethics
  • Workplace and labor relations
  • Positive action
  • Supply Chain
  • Customers
  • Environment
  • Community
• Corporate governance


  Accountability, transparency and conformance with the laws
• Business ethics


  Inclusion of the core values such as honesty, trust, respect, and fairness into the policies, practices, and decision making of a company
• Workplace and labor relations

  Good CSR practices including health and safety, employee relations and work-life balance
• Positive action


  Inclusion of people with disability and people from the local community in the diversity of workforce, gender policy, guidelines on prevention of sexual harassment, prevention of HIV/AIDS and employee volunteering
• Supply Chain


  The business process of any company is not limited to the internal operations but includes the whole supply chain involved in producing goods and providing services
• Customers


  Satisfaction and loyalty of customers would be contingent on the way the company has produced the goods and services with consideration on the social, environmental, supply-chain and other such concerns
• Environment


  CSR is beyond legal requirements including the issue on the environment. It is the role of the company to further deliver environmental benefits besides mandatory requirements
• Community


  The connection of a company with the community depends on its direct communication with it. CSR needs to help the community through providing positive changes to the lives of these people at the same cultivating the brand image of the company
• Drivers of CSR


  • The shrinking role of government
  • Demands for greater disclosure
  • Increased customer interest
  • Growing investor pressure
  • Competitive labour markets
  • Supplier relations
• Historical phases of CSR

  Phase 1 (1800s to early 1900s) - Profit Maximizing Management

  Phase 2 (Early 1900s) - Trusteeship Management

  Phase 3 (1930s) - Quality of Life Management
• Unorganized CSR (1960s to 1970s)
• Organized Philanthropy (1980s to 1990s)
• PBSP (Philippine Business for Social Progress) managed to evolve despite restrictions and lack of know-how
• Projects under PBSP have given assistance to powerless farmers, fishermen, countryside workers, underprivileged urban people and ethnic cultural communities in the Philippines
• Organized Philanthropy (1980s to 1990s)

  The Philippine government implemented new policies about deregulation, decentralization and liberalization during this period
• In the period of organized philanthropy, numerous foundations were put up such as ShoeMart Foundation (1983), Coca-Cola Foundation Philippines (1966), Roxas Foundation (1957), Sarmiento Foundation
• Corporate social responsibility programs were also adopted by other companies during the period of organized philanthropy
• Area Resource Management (ARM)

  Developed by PBSP in order to more organize CSR strategy, with the intention of connecting with other partners in the private sector for capacity building
• Any investment in CSR is now becoming strategic that toughens the relations amongst the participants
• Organized Movement (2000 and continues until present)


  Globalization was the great influence in the spread of CSR worldwide
• The interdependence of business competition and community health became popular as "shared value" in the field of CSR
• The League of Corporate Foundation (LCF) in the Philippines was founded in 1991 with the purpose of promoting and enhancing CSR among its network of over 80 of the largest operating and grant making corporate foundations and corporations in the Philippines
• For more than two decades now, LCF still lead the business sector in expanding interest in corporate philanthropy, CSR, and commitment to nation building
• Members of LCF collaborate in educational projects and initiatives ever since its foundation until these days through their committees on Arts and Culture, Education, Enterprise Development, Environment, and Health
• Socioeconomic view


  A business is a portion of the larger society and thus has social responsibility that goes beyond making and maximizing profits, with maximizing profit being the second priority and the first priority is defending and refining society's welfare
• Classical view


  The primary role of business is to provide goods and services to maximize profits for the benefits and satisfaction of the shareholders' interest in an open and free competition with obedience to laws, and socially responsible actions are seen as costs that may dilute their economic productivity
• Businesses that are socially responsible

  • Have a positive public image to increase sales, access to financing, and attract better employees
  • Help provide solutions to problematic social problems and offer a better quality of life which may also attract and retain skilled employees
  • Meet public expectation that businesses are not only after attaining economic goals but also social ones
  • Have the highest likelihood to earn more secure long-term profits due to harmonious community relationships and enhanced business reputation
  • Balance their power and responsibility as the most influential organizations in society
  • Result in higher stock price earnings ratio as the stock market observes their socially responsible actions
  • Have ample financial resources, technical experts and managerial talents to support and sustain their public and charitable projects
• Businesses with the classical view

  • Focus only on activities that would produce profits for shareholders
  • Believe that social welfare should be left for the government to take care of
  • Use aggressive competitive strategies to ensure survival of the business and maximize profits
  • Avoid commitment to CSR initiatives because there is only a small nature of direct economic benefit derived from it
  • Believe that utilising resources for CSR activities would mean additional costs and competitive disadvantage, negatively affecting financial performance
  • Consider commitment to philanthropic responsibility as averting shareholders wealth into non-economic activities, preventing the main objective of maximizing profits
• Pyramid of Corporate Social Responsibilities

  Considers five types of responsibilities: economic, legal, ethical, environmental, and philanthropic
• Economic responsibility


  The first and most apparent responsibility, to be profitable and focus on the long-term growth of the business, while also considering the overall effects on society through balancing economic decisions
• Legal responsibility


  The business' obligation to obey all laws set forth by society, as the government acts as regulators to maintain the integrity of business practices and protect public interest
• Ethical responsibility


  To do what is right even when not obligated to do so by law, such as fair labor practices and treating suppliers fairly