Mgt 419 - Lecture Notes 9/5

MGT 419: Lecture Notes 9/5

Chapter 2:

Corporate Social Responsibility (CSR)

CSR- Managers need to consider the impact of the company’s actions on society.

• Corporate Citizenship
• Sustainability
• Conscious Capitalism
• Creating Social Value

CSR Timeline

Economic Model – organizations need to be financially viable to survive. Sometimes engaged in: philanthropy, community obligations and paternalism.

Legal Model – organizations need to follow the rules.  

Social Model – organizations need to consider in general when making decisions.

Stakeholder Model – organizations need to consider its impact upon individual stakeholders when making business decisions.

CSR Terminology

Corporate Social Responsibility -Emphasizes obligation and accountability

Corporate Social Responsiveness -Emphasizes action and activity

Corporate Social Performance -Emphasizes outcomes and results

“New” Concepts 

Corporate Citizenship (CC) - Views companies as citizens and all this implies

Corporate Responsibility (CR) - Broadly focuses on all categories of corporate responsibilities

Sustainability (Sus) - Emphasizes longer – term concern for people, planet and profits

Creating Shared Value (CSV) - Focuses upon how companies generate economic value in a way that produces value for society

Conscious Capitalism - “Mindful” business practices – higher purpose, stakeholders, conscious, leaders and conscious culture

Four Part Def. of CSR

Economic Expectations (Required) – Organizations effectively and efficiently produce what society needs at a fair price (drugs & dog food)

Legal Responsibilities (Required) – Obey rules and regulations (gray areas – taxes; quid pro quos)

Ethical Responsibilities (Expected) – Legal responsibilities deal with what organizations need to do; ethical issues are what organizations are supposed to do. (Apple and $246 billion in overseas accounts)

Philanthropic Responsibilities (Desired/expected) – Voluntary or discretionary actions that reflect current expectations of organizations by the public (Hurricane Harvey response)

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Philanthropic 

     Legal

MGT 419 – 9/12/2017

CSR Exemplar Firms

• Social Entrepreneurship
• Social Intrapreneurship
• Mainstream Adopters

Arguments against CSR

• Classical economics
• Business not equipped
• Dilutes business purpose
• Businesses have too much power already

Arguments for CSR

• Enlightened self-interest
• Warding off government regulations
• Better resources available
• Proaction better than reaction
• Public support

Business Case for CSR

• Defensive Approach
• Cost- benefit approach
• Strategic approach
• Innovation and learning approach

Chapter 3 – Stakeholders

View of the Firm

“Production” View

• Focused on who supplied raw materials and who bought outputs

Managerial view of the firm

• Included owners and employees

“Stakeholder” view of the firm 

Types of Stakes

• Included all segments affected by the firm (i.e. social, economic, political)

An interest

• If an organization does something, does it affect me directly or indirectly?

A right

• If an organization does something that affects my ability to pursue “life, liberty, or the pursuit of happiness?” (Houston zoning regulations; fossil fuel plant emissions).

Ownership 

• Do I hold a share of the organization? (Direct ownership/mutual fund ownership).

Types of Stakeholders

Primary Social Stakeholders