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COURSE:
Ethical Business
MSC. 2017-2018
Session 4: Corporate Social Responsibility:
Approaches and Trends

Dr. Tanusree Jain

What is the responsibility of corporations?
A theoretical perspective
Session 2

Accountability
Theory

Session 4
Session 4
Corporate
Social Sustainability
Responsibility
Responsibility
Theory
of Corporations

Ethical Stakeholder
Session 1
Theories Theory Session 3

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 What is Corporate Social Responsibility
Defining CSR: navigating through the jungle of definitions
European The responsibility of enterprises for their impacts on society
Commission
Giving
CSR Asia We believe CSR is a company’s commitment to operating in an
(Social economically, socially and environmentally sustainable
Enterprise) manner whilst balancing the interests of diverse stakeholders.

World Bank CSR is the commitment of business to contribute to sustainable

economic development, working with employees, their families, the
local community and society at large to improve quality of life, in
ways that are both good for business and good for development
Mutual
World We believe that corporate citizenship is enlightened self-interest of
Economic corporations since their growth, citizenship prosperity and
Forum sustainability is dependent on the state of the global, political,
economic, environmental and social landscape.

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 What is Corporate Social Responsibility
Defining CSR: navigating through the jungle of definitions

Foreign Affairs & CSR is defined as the way companies integrate social,
International environmental, and economic concerns into their values
Trade (Canada) agreements and operations in a transparent and accountable
manner. It is integral to long-term business growth and success,
..in promoting Canadian values internationally and contributing to
the sustainable development of communities
Values
Chinese Ministry A concrete action taken by Chinese companies to implement the
of Commerce political aspiration of the new Communist Party – putting
people first to create a harmonious society

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 What is Corporate Social Responsibility
Defining CSR: navigating through the jungle of definitions

Nike It’s not just about getting better at what we do – addressing

impacts throughout our supply chain – it’s responsibility
about striving for the best, creating value for the business and
innovating for a better world.
Strategy
Volkswagen Acting responsibly – towards environment, our workforce, our
products and society – is a tradition of our company and in line
with our corporate culture. It enables us to increase our
competitiveness and future capabilities.
TATA CSR implies..to look beyond the generation of products
and profits to serving the communities in which we function.

Philanthropy

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 One of the most classical
typologies in the field of
CSR is Carroll’s (1991)
pyramid.

Voluntary

Mandatory

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 CSR: Voluntary or Mandatory
SUPPORTERS CRITICS

Voluntarism Helps prevent mandatory legislations if Self regulation also leads

(beyond law) industries self regulate. E.g. Calorie to Greenwashing. Move
labelling by food industry : KFC, Pizza hut to regulate: Disclosures:
and McDonalds EC (2011), Investment:
India CSR law (2013)

Impact on Externalities: Self regulation Regulations will lead to

leads to managing externalities (avoid internalizing costs of
harm). Investment in clean energy – could externalities e.g.
save $ for companies and customers, e.g. Pollution fines, Shell.
Dupont

Aligning social with economics: If voluntary, Only branding,

firms will increase CSR by creating shared reputation management,
value propositions. Link CSR to core PR, limited potential, no
competencies and competitive advantage, real shared value
innovate.

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 Different Approaches of CSR

Jain and Jamali, 2016

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 Philanthropy

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PHILANTHROPY
Individual Short
discretion termism
Individual Responsibility

Organizational Largely affected by How was

Responsibility through values/causes close to the wealth
created?
corporate giving the top management –
Requires good intentions
Based on community and strong leadership
expectations
What
What about
happens Impact?
during
crisis
Is it just to
avoid
inheritance
taxes?
Facebook

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 Different Approaches of CSR
PHILANTHROPY
Example:

Tata Motors,
Microsoft, Chrysler:
Training and
developing skills for
developing future
employees, reduce in
house training costs,
loyal workforce.

Jain and Jamali, 2016

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 Kenco: Coffee vs Gangs project

● An initiative set up in 2014 in the

Honduran capital - San Pedro Sula.

● Developed by Kenco and its partner

Fundes (Latin American NGO).

●1 year educational training

programme to provide
opportunities for young people.

● Offers an escape from the constant

threat of local gangs & the pressure
to join.
 How does it work?

● 19 young Hondurans' are being trained in the business of

coffee.

● They come from disadvantaged backgrounds (drugs,

crime, violence…).

● Skills: languages (English & Spanish), how to develop a

business plan & how to be a coffee farmer.

● Successful graduates are then provided with funding to

help set up and sustain their own businesses.
 Different Approaches of CSR
PHILANTHROPY CSR INTEGRATION

Example:
Nike: Solving
child labour
issues in SS
chain

Jain and Jamali, 2016

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 Different Approaches of CSR
PHILANTHROPY CSR INTEGRATION INNOVATION

Jain and Jamali, 2016

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 PERUS COMPANY

HENRI ARMAND NICOLAS

French brand producing colorful Sneakers Artisanally made in Peru

Launched in 2014 thanks to a crowdfunding campaign

 PERUS COMPANY

HENRI ARMAND NICOLAS

 STRATEGIC CSR
What about
Business needs to carefully intent?!
pick the issues that
Organizational
provide max shared value.
Responsibility
CSR can be a source of
opportunity and
Requires changes in
innovation (Misery
organization structures,
Yet, we see CSR Project!!)
as reputation establishing relationships
building and and incentives
PR, WHY ? Beyond community
expectation to
Opportunity. Focus on measureable
impact
Context matters: Industry,
What about geographic location
Cost of measuring
those issues exceeds benefits?
that do not
create shared
value?

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PHILANTHROPY STRATEGIC CSR

BOTH AGREE THAT

- Business success is important and even if

that creates haves and have-nots, business
is critical for society.

- Corporate success and social welfare is not

a zero-sum game.

- It is about corporate citizenship: it is not

just about writing the cheque, it is about
tracking implementation and results over
time.

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What is the responsibility of corporations?

Corporate
Social
Responsibility

Accountability
Theory Sustainability
Responsibility
Theory
of corporations

Ethical Stakeholder
Theories Theory

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 What is Sustainability?
Role of Business
Sustainability is defined as “meeting the needs of the
present without compromising the ability of the future
generations to meet their own needs” (World Commission on
Environment & Development, 1987).
Long-termism
Strategy
Sustainability refers to change processes in human societies
that promote the balanced endurance of a set of three
relationships:

Natural Environment
Stakeholder logic
Relationship 1

Humankind
Current
Generation
Universalism Future Generation
(Context X)

R/ship 2
Current Current
generation generation
(Context Y) (Context Z)
Long termism
Relationship(s) 3

Source: Boutilier, 2009

 Key Questions for Sustainability

– Why should we care : Individual responsibility

– Do we rather need a radical transformation of

present society?
E.g. Responsible consumption: Role of Consumers

– How do we mainstream the sustainability

development agenda into market systems? E.g.
Carrot or Stick: Role of Governments

– How do we ensure economic growth is sustainable?

E.g. Optimum scaling point : Role of Business
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How to incorporate environmental values
into business strategy
LIGHT GREEN / If a firm Lobby against
LEGAL GREEN innovates on regulation –
green energy, it will only work Requirement:
REGULATORY can trump in short run.
compliance regulation – Belief in Susty,
better, faster, Home and host Corporate
cheaper = CA country citizenship
differences –
Make lag – but will
regulation catch up (VW
irrelevant = CA emission)

If all comply, no
competitive
disadvantage CA = Comp Advantage

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How to incorporate environmental values
into business strategy
MARKET GREEN Requirement:
Firms innovate Create markets
due to market and new Belief in
Customer creating value
Preference pull approach, customers = CA
to suit eg. New else simply fad
customer supercomputers and greenwash
eg. Amazon
requirement =
CA packaging
issue,
Customer
dedication for
susty is key.

CA = Comp Advantage

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SOCIAL MEDIA REVIEWS
SOCIAL MEDIA REVIEWS
How to incorporate environmental values
into business strategy
STAKEHOLDER Requirement:
GREEN
Introduce Voluntary, ahead
sustainable of regulation = Belief in
Stakeholder stakeholder
Preference practices across CA
supply chain: value creation
customers:
packaging,
employees:
waste disposal,
ethical
sourcing.
Integrated CSR
approach

CA = Comp Advantage

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 Building Green
• WHAT DOES ‘ADOBE’ MEAN?
• ADOPTION OF LEED STANDARDS: LEADING IN ENERGY
AND ENVIRONMENTAL DESIGN. 70% OF BUILDINGS.
• SAN FRANCISCO OFFICE: OLDEST LEED BUILDING IN
THE WORLD
• 88% EMPLOYEE SATISFACTION RATE = INCREASED
PRODUCTIVITY
 Energy Conservation
• Adobe joined RE100 to commit to 100% renewable energy (Goal
set for 2035)
• Developed and implemented a monitoring system that captures
energy and critical operations of all Adobe data centers
• Incorporated evaporative cooling and other innovations to
reduce energy use
• In 2009 they installed 20 Windspire wind turbines for onsite
power generation.
 Waste Reduction

• 97%+ of Adobe’s licensed products delivered digitally, eliminated its physical

supply chain. Drastic waste reduction.

• Collaboration with local partners - responsibly divert waste from ever reaching
landfill. Compost, recycling and especially re-use whenever possible

• Employees at the heart of waste reduction

• Any material is either recycled, composted, repaired or repurposed

• Adobe Sign (digital signature) saved 14 million pounds of wood and 43 million
gallons of water

• Creative Cloud (Photoshop, Illustrator) subscriptions reduced carbon footprint of

boxed product by at least 90%

• Adobe Connect (web conferencing) helped customers avoid 5.4 million tonnes of
CO2 travel emissions
How to incorporate environmental values
into business strategy
DARK GREEN Requirement:
Introduce Some countries
sustainable follow Dark Design thinking
DEEP ecology Values
perspective business Green, Sweden is
models from banning Oil,
the very Netherlands is
beginning. Tie banning petrol
to business cars, Carbon
purpose = CA. credit schemes,
Body Shop you reduce
footprint

CA = Comp Advantage

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 Key Facts

Ecosia based in Berlin,

Germany

18 Employees

Every search raises cents

0.28 EUR = a single tree! Ecosia is powered by Bing and
its own search algorithms
Full financial transparency
 How The Model
Works

Search the web with Users clicking on ads 80% of profits is used
Ecosia via that appear on the to plant trees
www.ecosia.org search engine
generates income
CASE STUDY: Please sit in groups

VW Emissions Case
 WHAT HAVE YOU LEARNT
IN THIS SESSION ?

Be conversant with major aspects related to Ethical

Business, namely CSR and Sustainability

Understand how businesses approach their social and

environmental responsibilities and evaluate their potentials
and limits.

Learn to analyse complex business situations and be

conscientious of the underlying ethical dilemmas facing
businesses and individuals.

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 Preparation for Next Class
Session 5 : Defining and Measuring ‘Impact’

Readings:

To be announced.

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