CORPORATE SOCIAL RESPONSIBILITY

1. CORPORATE SOCIAL RESPONSIBILITY Business Environment Ch. 5, Steiner & Steiner CSR

2. Class Objectives • Corporations will want to establish a StrategicCSR policy consistent with their view of their Social Contract • CSR can be described for its sources (causes) and its principles, but its effectiveness is hard to evaluate • Corporations have six responses to the multiple pressures they will receive from society • There are skills sets that can be developed to improve CSR. CSR

3. Corporate Social Responsibility (Steiner. P. 120) • Corporate duty, to • Create wealth, and • Protect social assets • Avoid harm • Preserve • Enhance CSR

4. CSR Related to AIDS • International Aids Vaccination Initiative • Non-profit, well funded (Bill & Melinda) • Invest in small US Pharmaceuticals • Broker US Pharm. & Develop. Countries • License to manufacture cheap alternative for Africa • Could affect prices in the U.S. CSR

5. History of Corporate Social Responsibility (CSR) • Corporate lesson in the Rodney King Riots? • McDonalds • Shell Corporation CSR

6. “Resistance” to CSR? • Adam Smith – “invisible hand” • Social Darwinism • Ultra Vires CSR

7. “Justification” for CSR--Bowen • Ethical duty to consider broad social impacts of decisions • Reservoirs of skill and energy • Power in keeping with a broad social contract • Enligtened self-interest to improve society • Voluntary action will head off negative reactions? CSR

8. Case Against CSR--Friedman • Use its resources for profit • Engage in activities for profit • Increase its profits • Within rules of the game CSR

9. Case Against CSR (cont.) • CSR money reduces shareholder profit • Is it what stockholders want? • Consumers paying for it • Separation • church/state • corporate/state CSR

10. Supremacy of CSR in the US • CED -- 1971 • Inner Circle—products & jobs • Intermediate Circle—environment, hiring, safety • Outer Circle—evolving • Business Roundtable Statement on CSR – 1981 • Economic/Social responsibilities are compatible • ALL CORPORATE RESPONSIBILITIES ARE …INTERWINED CSR

11. Basic Elements (causes) of CSR • Market forces • Mandatory programs • Voluntary Social Programs CSR

12. General Principles for StrategicCSR • Law: corporate and stakeholder regulations • Primarily by economic criteria: ROE & Shareholder value • Address the adverse social impacts they cause • Varies by corporate characteristics • Meet legitimate shareholder needs • Guided by winds of social direction CSR

13. Criteria for Rating CSR • Published Screens • Domini Social Equity Fund • Council on Economic Priorities – p. 138 • Personal screens – what is on your list? • WSJ in 2000 for top 50 using CSR

14. CSR and Profit – Related? • Investing on CSR is noble but less profitable p. 139 • Scholars and profit – no conclusions • Local programs – examples that work? CSR

15. CSR Internationally • European Nations • Regulations and taxes • Unraveling because of US/other competition • Japan • Confucianism – direct relationship responibility • Emperor Meiji’s “Imperial Oath” • Weaker Stakeholders • LDCs • India is an exemplar • Economic performance alleviates poverty CSR

16. Levi Strauss • Evaluate pros/cons of LS decision to stay/leave in 1993 • Evaluate pros/cons of LS decision to return in 1998 • What is the responsibility of a company like LS in improving HR in China? CSR

17. Review main points of CSR in Chapter 5: • Corporations will want to establish a StrategicCSR policy consistent with their view of their Social Contract • CSR can be described for its • Sources (causes) • Principles, but • Effectiveness is hard to evaluate CSR

18. IMPLEMENTING CORPORATE SOCIAL PROGRAMS Steiner & Steiner, Ch. 6 Business Environment CSR

19. Class Objectives • Corporations will want to establish a StrategicCSR policy consistent with their view of their Social Contract • CSR can be described for its sources (causes) and its principles, but its effectiveness is hard to evaluate • Corporations have six responses to the multiple pressures they will receive from society • There are skills sets that can be developed to improve CSR. CSR

20. Royal Dutch Shell • Responsible corporate member • Observe county laws • Support human rights • Proper regard or health, safety, & environment • Sustainable development CSR

21. Six Patterns of Social Response • Rejection • Adversary strategy • Resistance strategy • Compliance • Accommodation • Proactive strategy CSR

22. Pressures for Undertaking Programs • Government – jaw boning • Community interests & demands • Environmental concerns • Competitive responses • Stockholder/investor pressures • Philanthropy • Crises CSR

23. Implementation Procedures (SKILL SETS) • Issues Management • Crisis management • Corporate philanthropy • Business in education CSR

24. Issues management • What is it? • Identify important social issues • Potential of concern to the company • Develop responses CSR

25. Issues management methodology • Intuition • Scenario planning • Probability/Impact matrix • Setting priorities • Shaping public opinion • Legislation • Compliance CSR

26. Crises management • Examples • Bhopal in India • Exxon Valdez oil spill • Steps • Assess possibilities • Prepare process • Game it CSR

27. Corporate philanthropic allocations • Priorities: education, health, • 10% of pre-tax “profits” vs 1-2% actual • Buffett & Gates are significant contributors • How will you give? CSR

28. Philanthropic Programs • Community Economic Development • Target and Home Depot at Habitat • Strategic philanthropic self-interest • Cause related marketing • Current web sites • Business in Education • How much is OK? CSR

29. Social audits • Measure program contributions • Central East Rotary summarized giving 6 years • Kellogg Foundation • 80% of start-ups vanished w/i five years How would you respond if you were on the board? CSR

30. Class Objectives • Corporations will want to establish a StrategicCSR policy consistent with their view of their Social Contract • CSR can be described for its sources (causes) and its principles, but its effectiveness is hard to evaluate • Corporations have six responses to the multiple pressures they will receive from society • There are skills sets that can be developed to improve CSR CSR