CHAPTER 1

Social Responsibility
Framework
Chapter Objectives
To define the concept of social responsibility
To trace the development of social responsibility
To examine the global nature of social responsibility
To discuss the benefits of social responsibility
To discuss the framework for understanding social
responsibility
What do you believe organizations
should be responsible for
accomplishing?
Social Responsibility Defined
The adoption by a business of a strategic
focus for fulfilling the economic, legal,
ethical and philanthropic responsibilities
expected of it by its stakeholders
Social Responsibility Defined (cont.)
Businesses should look beyond their self-
interests and recognize that they belong to
a larger group that expects responsible
participation.
Applies to all types of businesses
Adopts a strategic focus
Fulfills societal expectations



Social Responsibility Defined (cont.)
Economic responsibilities
Legal responsibilities
Ethical responsibilities
Philanthropic responsibilities
Who are the key
stakeholders of the organization?
Social Responsibility Defined (cont.)
Requires a stakeholder orientation
Customers
Employees
Investors
Stockholders
Suppliers
Government
Communities
Stakeholders
Those constituents who have a stake in, or
claim on, some aspect of a companys
products, operations, markets, industry, and
outcomes



Lessons Learned from Economic
Crises

Transparency
A long-term perspective
Liquidity
Limited use of derivatives
Absence of rating triggers
Minimal counter-party exposure
Diversification

Global Nature of Social
Responsibility
Who determines social responsibility
on a global scale?
Host country
Home country
Outside organizations
Benefits of Social Responsibility
Greater trust with stakeholders
Greater customer satisfaction
Stronger employee commitment
Stronger investor loyalty
Greater profitability
Countries with greater trust-based institutions
foster a productivity-enhancing environment.

Social Responsibility Builds Trust
Trust is the glue that holds organizational
relationships together.
Stephen Covey contends that low trust
results in organizational decay and
relationship deterioration.

Social Responsibility
Strengthens Employee Commitment
The greater a companys dedication to
employees, the greater the likelihood that
employees will take care of the organization.
What happens when
employee loyalty is breached?
Quality is compromised.
Service is compromised.
Efficiency decreases.
Strengthening
Employee Commitment
Employee stock ownership plans (ESOPs)
Employee-centered programs

Social Responsibility
Contributes to Investor Loyalty
Investor relationships require dependability,
trust, and commitment.
Shareholders are concerned about ethics, social
responsibility, and corporate reputation.
Half of investors sell their stock
within one year.
Social Responsibility
Enhances Economic Performance
Economic well-being is promoted by:
Trust and a sense of community
Rigor in the legal and ethical systems
Consistent exercise of authority within society
Social institutions that foster access, productivity
and economic growth
Positive attitudes about work, innovation,
savings, and profits
Framework for Studying
Social Responsibility
Chapter 2
Strategic Management of Stakeholder Relationships
Chapter 3
Corporate Governance
Chapter 4
Legal, Regulatory, and Political Issues
Chapter 5
Business Ethics and Ethical Decision Making
Framework for Studying
Social Responsibility (cont.)
Chapter 6
Strategic Approaches to Improving Ethical Behavior
Chapter 7
Employee Relations
Chapter 8
Consumer Relations
Chapter 9
Community Relations and Strategic Philanthropy
Framework for Studying
Social Responsibility (cont.)
Chapter 10
Technology Issues
Chapter 11
Sustainability Issues
Chapter 12
Social Responsibility in a Global Environment