Corporate Responsibility and Society MNGT 5990

1. Corporate Responsibility and SocietyMNGT 5990 Fall 2013 - Shanghai, PRC Robert Serben, Ph.D. Week 8- Review for Final Examination Essential CSR Concepts and Principles

2. Composition of final exam

3. CSR “Corporate social responsibility” A collection of evolving terms, concepts, theories, and practices to describe one essential idea: • That business has the responsibility to do more than comply with the minimum requirements of law and the generation of a profit for its owners. Corporate Social Responsibililty

4. True or False • Only at large companies do successful CSR strategies take into account the perspectives of stakeholders. MNGT 5990 Corporate Responsibility and Society

5. Fundamental CSR points Business does not exist in a vacuum The environment surrounding business is always changing CSR takes a longer term view of success Shareholders are not always the most important stakeholders Corporate Social Responsibililty

6. Shareholders • “…the average holding period for stocks has dropped from five years in the mid-1970s to six months today. People aren’t investing in your company; they’re investing in your stock.” – Class text, p.44 Corporate Social Responsibility

7. CSR programs - Examples Corporate Social Responsibililty

8. Strategic CSR • Strengthening the strategic capabilities of the organization • Activities supportive of unique business needs • A balanced relationship among stakeholders • Adaptable to changing conditions • Medium to long term view Corporate Social Responsibililty

9. Three arguments for CSR • Moral argument: • Successful operations reflects the values of the larger society • Rational argument: • Maximize performance by minimizing restrictions • Economic argument: • Reflects concerns of stakeholders over medium to longer term Corporate Social Responsibililty

10. CSR relevancy • Five trends that seemingly will grow throughout the 21st century: • Growing affluence • Ecological sustainability • Globalization • Free flow of information • Brands Corporate Social Responsibililty

11. The growing role of affluence • Affluence (one of the five emerging trends) promotes corporate social responsibilitybecause affluent customers can and do make choices about product purchases based on company/brand reputation or image. Corporate Social Responsibililty

12. CSR relevancy Five mega - issues Five demanding stakeholders “Green" consumers Activist shareholders Civil society / NGOs Governments and regulators Financial sector • Climate change • Pollution / health • Globalization backlash • The energy crunch • Erosion of trust http://www.greenbiz.com/news/2005/10/23/balanced-scorecard-and-corporate-social-responsibility-aligning-values-profit Corporate Social Responsibility

13. An important question • How to find socially responsible action that is strategic? • Both Prahalad and Porter: focus on areas of expertise and relevance to the organization. Corporate Social Responsibility

14. Strategic planning: CSR inclusion Central component of strategic CSR: Focus on “areas of social concern that extend beyond profit maximization, but that are related to the businesses core operations.” • Class text. Pages 39 & 40. Corporate Social Responsibility

15. Stakeholders • “… any group or individual who can affect is affected by the achievement of the organization’s objectives.” Glossary of Terms. Class text. P.xiii Corporate Social Responsibility

16. Stakeholder groups ( p.35) Globalization: Dynamic force Customers, competitors, creditors, distributors, suppliers 2. Economicstakeholders Government/regulators, communities nonprofits, environment 3. Societalstakeholders 1. Organizationalstakeholders Employees, managers, stockholders Technology: Dynamic Force Corporate Social Responsibility

17. Benefits • “Six Reasons Companies Should Embrace CSR” • Innovation • Cost savings • Brand differentiation • Long-term thinking • Customer engagement • Employee engagement • James Epstein-Reeves. Forbes Magazine. • Found at: http://www.forbes.com/sites/csr/2012/02/21/six-reasons-companies-should-embrace-csr Corporate Social Responsibility

18. CSR Reporting With regard to communicating about the performance of a CSR program, a survey of business businesses showed: • 67% had scorecards, 100% of those scorecards set future targets • 83% used the term “sustainability” • P.48. CSR Trends 2010. PricewaterhousCooper LLP. Corporate Social Responsibility

19. Milton Friedman • Published in 1970 – rational argument • “Business has a social purpose” talk is illogical • Logically, business is only responsible to its owners to: • Make as much money as possible • Conform to the basic rules of society (law, custom, and ethics)

20. Charles Handy • Published in 2002. Moral argument: • “The purpose of a business …is not to make a profit. It is to make a profit…to do something more or better.” • Three points • Focus on stock price and ownership can distort the business culture • Shareholders are rarely owners • Intellectual capital is as important as financial capital

21. SCSR • Business does a better job in reacting to CSR concerns rather than initiating them. • Stakeholders need to care and to act for socially responsible action. • True responsibility for initiating social responsible action is shared among stakeholders.

22. Sustainability • Definition - “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” • Gro Harlem Bruntland. 1987 Bruntland Report MNGT 5990. Corporate Responsibility and Society

23. “Green washing” • An abuse of CSR • Definition: • The act of misleading consumers regarding the environmental practices of the company or the environmental benefits of a product or service. (p.109) MNGT 5990. Corporate Responsibility and Society

24. Two statements - True or False • Apple (maker of the Iphone and Ipad) is a highly successful, global business. • However, Apple does a poor job in measuring its effectiveness in meeting its CSR goals. MNGT 5990. Corporate Responsibility and Society

25. Apple – an example of CSR measurement http://www.apple.com/environment/our-footprint/ MNGT 5990. Corporate Responsibility and Society

26. Two statements - True or False • Outcomes – stakeholders want to see what they’re getting • Philanthropists and donors increasingly want to see what they're getting MNGT 5990. Corporate Responsibility and Society

27. True or False • It is impossible to analyze and rate a CSR program’s general structure MNGT 5990. Corporate Responsibility and Society

28. It is possible to analyze and rate a CSR program’s general structure MNGT 5990. Corporate Responsibility and Society

29. Middle management – an important role 1. Translating strategy into action. 2. Managing competing pressures MNGT 5990 Corporate Responsibility and Society

30. End of review MNGT 5990 Corporate Responsibility and Society