Corporate S ocial R esponsibility

1. Corporate SocialResponsibility JanDvořáček Technical University in Zvolen

2. What is the purpose of a business? Company – thisfundamentalbusinessterm is derived from two Latin words, “cum” and “panis”, which mean breaking bread together.

3. What is the purpose of a business? „Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.“ Milton Friedman (Nobel prize recipient for economy)

4. What is the purpose of a business? „I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper and find the real reasons for our being. As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately – they make a contribution to society, a phrase which sounds trite but is fundamental.“ Dave Packard (Co-founder of Hewlett Packard Company)

5. CSR – whatdoesitmean? C – Corporate S – Social R – Responsibility ....aduty or obligation to satisfactorily perform or complete a task (assigned by someone, or created by one's own promise or circumstances) that one must fulfill, and which has a consequent penalty for failure.

6. CSR – egoismvs. altruism "Egoism is a life principle when human’s activities following only their own interests, ignoring the interests of other people. Egoism, as a moral quality, was in the history of moral consciousness generally evaluated negatively“ "Altruism is such a moral principle, that is based on the suppression of their own egoism (selfishness), in selfless sacrifice for the benefit of others, in the willingness to sacrifice their own interests for the interests of others“

7. egoism (companies‘ profitonly) altruism (fully divided company’s profit for society) CSR – egoismvs. altruism

8. CSR definition A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis. (European Commission) Operating a business in a manner that meets or exceeds the ethical, legal and public expectations that society has of business. (Business for Social Responsibility)

9. CSR – intersectionofdefinitions • Environmental dimension • Social dimension • Economic dimension • Stakeholders dimension • Dimension of voluntariness

10. CSR hierarchy

11. Stakeholders „A stakeholder in an organization is any group or individual who can affect or is affected by the achievement of the organizations objective“ (Freeman, 1984) • Primary stakeholders - owners, stockholders,investors, customers, suppliers, creditors, and employees • Secondary stakeholders - the general public, government, competitors, communities, activist groups, lobbyists, business support groups, and the media

12. Stakeholders – internal and external

13. Stakeholder’s concerns

14. CSR activities Economic: • transparency, corporate governance, code of ethics, ethical marketing and advertising, a non-corrupt framework, ... Social: • philanthropy, supporting localcommunity, volunteerism,supporting of education, workforce diversity, engaging in fair trade practices, outplacement, ... Environmental: • recycling, waste management, water management, using renewable energy sources, utilizing reusable resources, creating 'greener' supply chains, packaging and transportation, using digital technology instead of hard copies, ...

15. CSR – relatedterms • Sustainable Development • Corporate Philanthropy • Corporate Citizenship • Cause Related Marketing • Corporate Volunteering • Social Responsible Investment • Taxassignation

16. Benefits of CSR • Enhancedbrand image and reputation • Differentiation from competitors • Increased ability to attract, motivate and retain employees • Costs reductions • Increased sales and customer loyalty • Positive PR • More business opportunities • Easieraccess to capital

17. Consumer attitudes to CSR

18. Critiqueof CSR • MiltonFriedman • ...“thereisone and onlyonesocialresponsibility of business – to useitsresources and engage in activitiesdesigned to increaseitsprofits so long as itstayswithintherules of the game, whichis to say, engages in openand freecompetitiondeception or fraud.“ • Consumers’ skepticism

19. Sociocultural and economiccontextof CSR • sociocultural and economic environments are so heterogeneous • countries with more developed economies have higher social expectations • Maslow's hierarchy of needs • example of an air pollution problem (Chile vs. U.S.A.)

20. CSRcontroversy

21. CSRleadership

22. CSRleadership R2 Jacket environmental cost: • 60 % of recycled polyester • 135 liters of water • 20 pounds of carbon dioxide “I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money. Our customers know that—and they want to be part of that environmental commitment.” YvonChouinard (Patagoniafounder)

23. Thank you for your attention!