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CORPORATE SOCIAL RESPONSIBILITY AND SOCIAL REPORTING

CORPORATE SOCIAL RESPONSIBILITY AND SOCIAL REPORTING. GROUP 4 Tria Marissa Nurfajrina Ryan Novrian. A. IS THERE A SOCIAL RESPONSIBILITY OF BUSINESS?.

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CORPORATE SOCIAL RESPONSIBILITY AND SOCIAL REPORTING

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  1. CORPORATE SOCIAL RESPONSIBILITY AND SOCIAL REPORTING GROUP 4 Tria Marissa Nurfajrina Ryan Novrian

  2. A. IS THERE A SOCIAL RESPONSIBILITY OF BUSINESS? • The first article in this section by Milton Friedman is perhaps the best known argument for a purely profit-based social responsibility of business. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective.

  3. B. WHAT IS THE NATURE OF CORPORATE SOCIAL RESPONSIBILITY? • Is profit for the firm the only guiding principle of socially responsible activities, or should the impact of its decision on others be considered, even where the law allow the decision.

  4. C. IN THE END, DOES GOOD ETHICS MEAN GOOD BUSINESS? Professor Ullman summarizes the results of previous empirical studies on the relationship between social and financial performance as follow: • Seven showed a positive relationship between social and financial performance. • Three showed a negative relationship between social and financial performance. • One showed a positive relationship between the promotion of women and financial performance and a negative relationship between charitable contribution and financial performance.

  5. D. IF THERE IS A CORPORATE SOCIAL RESPONSIBILITY, HOW DOES A FIRM EVIDENCE ITS SATISFACTION OF THAT RESPONSIBILITY? • Formal effort at standardized corporate responsibility reporting began in early 1990s. In, 1991 seven companies had published sustainability report, at that time, however much of the report focus was on the environment. The reporting trend has since transformed itself, addressing not only environmental issues, but also economic and social performance.

  6. E. MAXIMIZING ETHICS AND PROFIT Patrick Primeaux offers a practical rejoinder to critics of Friedman, arguing for the possibility of a balance between money and ethics that is based on a theory of profit maximization. The problem for business and business ethics is the equation of business with money, specifically bottom-line accounting profits, and pressure to increase those profits quarterly or annually. That motivating objective is itself reflective of an ethical code. It consists of an ethical principle and demands a certain kind of behavior consistent with that principles.

  7. F. THE DIVINE RIGHT OF CAPITAL, Is Maximizing Returns to shareholders a legitimate Mandate? In response to what Marjorie Kelly sees as the problems of capitalism, she explores the question of whether maximizing shareholder wealth is an appropriate mandate for business. To judge by the current arrangement in corporate America, one might suppose capital creates wealth much as the divine right of kings was once the law of the land. Indeed, “maximizing returns to shareholders” is universally accepted as a kind of divine, unchallengeable mandate.

  8. G. GLOBAL CORPORATE CITIZENSHIP, The Leadership Challenge for CEOs and Boards FRAMEWORK FOR ACTION 1. Provide Leadership • Articulate purpose, principles and values internally and externally • Promote the “business Case” internally • Engage the financial sector

  9. 2. Define What it Means for Your Company Define the issues Agree on Company’s spheres of influence Identify key stakeholders 3. Make it Happen • Put Corporate Citizenship on Board Agenda • Establish Internal Performance, Communication, Incentive and Measurement Systems • Engage in dialogue and partnership • Encourage Innovation and Creativity • Built the Next Generation of Business Leaders

  10. Continue….. 4.Be Transparent About it • Agree what and how to measure • Develop a graduated program for external reporting • Be realistic

  11. REPUTATION QUOTIENT (RQ) To measure the Reputation Quotient Based on six dimension that are : • Emotional appeal • Products and services • Financial performance • Vision and leadership • Workplace environment • Social responsibility

  12. TITHING PROGRAM According to Charles Stoddard, the chairman and CEO of the Grand Rapids, “if the company used Tithing program so would be get three advantages he called “triple win” that are : The charity received an unsolicited donation, the stockholders received recognition for designating the donation, and the company received a tax-deduction”.

  13. SOCIAL REPORTING Potential benefits of reporting : • Anticipated critical performance • Communication tool an organization’s responding to stakeholder • Transparency • vehicle for linking typically discrete and insular functions in a more strategic manner • Management evaluate potentially damaging developments • Sharpen management’s ability to assess the organization’s contribution to natural, human and social capital • Reduce volatility and uncertainty in share price

  14. the Global Reporting Initiative Guideline • Vision and Strategy Encompasses a statement of the reporting organization’s sustainability vision and strategy, as well as a statement from the CEO • Profile An overview of the reporting organization and describes the scope of the report • Governance Structure and Management Systems An overview of the governance structure, overarching policies ands management systems in place to implement the reporting organization’s vision for sustainable development and to manage its performance

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