NBA 660

CORPORATE SOCIAL RESPONSIBILITY: ORGANIZATIONAL ISSUES

Spring 2006
(2nd half)

Time: TH 2:55 – 4:10

Room: B11
Instructor: Dana Radcliffe
Office: Sage Hall 401C
Office hours: TTH 10:15 – 11:45 and by appointment
Telephone: 315-729-9195 (cell)
Email: dmr42@cornell.edu

More than a few corporate leaders continue to accept—in practice, if not explicitly—Milton Friedman’s
famous contention that “the social responsibility of business is to increase its profits.” This dictum assumes
that a company exists primarily to serve the interests of its shareholders. Nevertheless, many corporations
have embraced the idea that a company has substantive obligations to other stakeholders too, such as
customers, employees, suppliers, and local communities. Many firms recognize future generations as
legitimate stakeholders as well, seeing environmental stewardship as integral to corporate social
responsibility (CSR). Friedman and other critics (including the editors of the Economist and the Wall
Street Journal) claim that CSR initiatives necessarily conflict with the economic purposes of business and,
in any case, are generally ineffective in serving the common good. Through recent articles, case studies,
and talks by guest speakers, this course examines why and how high-profile companies pursue CSR.
Accordingly, the readings and class discussion explore such questions as: Why believe a corporation has
any social responsibility other than increasing profits? If a company adopts a CSR-orientation, by what
criteria should it evaluate possible initiatives? What challenges may a firm encounter in trying to
implement CSR programs and policies? What can it do in meeting them? How should a company measure
the success of its CSR activities? What has worked—and why? What has failed—and why? When a
corporation does business in other countries, what standards (for wages, safety, pollution, etc.) should it
use? What means are appropriate for its supporting human rights in host nations?

Text Material
• Articles on Blackboard course website (Course Documents/Readings)
• Course reader

Grading
Your grade in the course will be based on the following:

Class participation 20%

Three short (2-3 page) papers 35%
Final Project (8-10 pages) 45%

As the percentage breakdown indicates, class participation is a significant component of the course.
Consequently, each student is expected to do all of the reading and to be prepared to take part in class
discussion of the readings. The final project will be a team exercise which, focusing on a particular
company, develops recommendations as to how the firm might effectively resolve specific issues posed by
a commitment to CSR.
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Key Dates: Tue., Mar. 28 Final Project Assigned

Thur., Mar. 30 Paper #1 Assigned
Tue., Apr. 11 Paper #1 DUE
Thur., Apr. 13 Paper #2 Assigned
Tue., Apr. 25 Paper #2 DUE
Paper #3 Assigned
Thur., May 4 Paper #3 DUE
Thur., May 11 Final Project DUE (in Sage 304)

Course Schedule

Tue., Mar. 14 Introduction

- Course intro.
- Video: “Corporate Social Responsibility: From Principles to Profit”

Thur., Mar. 16 The Debate over CSR

Reading
- Friedman, “The Social Responsibility of Business Is to Increase Profits”
[course website]
- The Economist, “The Good Company” [course website]
- Davis, “The Biggest Contract” [course website]
- Vogel, “The Revival of Corporate Social Responsibility” [course website]

Tue., Mar. 28 CSR: Basic Questions

Reading
- Kotler and Lee, “The Case for Doing at Least Some Good” [course website]
- Smith, “Corporate Social Responsibility: Whether Or How?” [course reader]

Thur., Mar.30 Guest Speaker: Scott Johnson, Vice President, Global Environmental &
Safety Actions, S. C. Johnson & Son

Reading
- “Sustaining Values: 2005 S. C. Johnson Public Report” [course website]

Tue., Apr. 4 CSR Best Practices

Reading
- Zadek, “The Path to Corporate Responsibility” [course reader]
- Kotler and Lee, “Twenty-Five Best Practices for Doing the Most Good for the
Company and the Cause” [course website]

Thur., Apr. 6 Guest Speaker: Julie Hoesterey, Director of Corporate Social Responsibility,
Deloitte Touche Tohmatsu

- “Sustaining Growth: Deloitte Touche Tohmatsu Worldwide Member Firms

2005 Review,” pp. 2-5, 7-13, 38-39. (Page numbers are for the original
document.)
[www.deloitte.com/dtt/cda/doc/content/dtt_2005Review_FINAL_lowrez_121505.pdf]
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Tue., Apr. 11 Using Partnerships

Reading
- Berger, et. al., “Social Alliances: Company/Nonprofit Collaboration” [course
reader]
- Pearce and Doh, “The High Impact of Collaborative Social Initiatives” [course
reader]

Thur., Apr. 13 Using Partnerships: Case Study

Reading
- “Timberland: Commerce and Justice” [course reader]

Tue., Apr. 18 Guest Speaker: John Sherman, Deputy General Counsel, National Grid USA

Reading
- “A Guide for Integrating Human Rights Into Business Management” [course
website]
- “Operating Responsibly” [course website]

Thur., Apr. 20 Stakeholder Demand for CSR

Reading
- Vogel, “What Is the Demand for Virtue?” [course website]
- Bhattacharya and Sen, “Doing Better at Doing Good: When, Why, and How
Consumers Respond to Corporate Social Initiatives” [course reader]

Tue., Apr. 25 Measuring CSR Returns

Reading
- Martin, “The Virtue Matrix: Calculating the Return on Corporate
Responsibility” [course reader]
- Lingane and Olsen, “Guidelines for Social Return on Investment” [course
reader]

Thur., Apr. 27 Measuring CSR Returns: Case Study

Reading
- “IBM On Demand Community” [course reader]

Tue., May 2 Guest Speaker: Bob Corcoran, Vice President, Corporate Citizenship,
General Electric and President, G. E. Foundation

Reading
- Gunther, “Money and Morals at GE” [course website]
- Murray, “Will ‘Social Responsibility’ Harm Business?”, Wall Street Journal,
May 18, 2005 [course website]

Please spend some time with “Our Actions: GE 2005 Citizenship Report”
(http:www.ge.com/files/usa/en/citizenship/pdfs/citizrep2005.pdf). Also, last fall
the Wall Street Journal conducted an online debate about CSR which included
among the three participants Ben Heineman, then GE’s Senior Vice President for
Law and Public Affairs. See “Corporate Social Concerns: Are They Good
Citizenship Or a Rip-Off for Investors?”, WSJ, December 6, 2005 [course
website]. If you get a chance, take a look at this article, noting especially Mr.
Heineman’s comments.
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Thur., May 4 CSR Case Study

Reading
- “Starbucks and Conservation International” [course reader]

COURSE READINGS

1. Milton Friedman, “The Social Responsibility of Business Is to Increase Its Profits,” New York Times
Magazine, September 13, 1970.

2. “The Good Company,” The Economist, January 22, 2005.

3. Ian Davis, “The Biggest Contract,” The Economist, May 28, 2005.

4. David Vogel, “The Revival of Corporate Social Responsibility,” Ch. 1 of The Market for Virtue:
The Potential and Limits of Corporate Social Responsibility, Brookings, 2005.

5. Philip Kotler and Nancy Lee, “The Case for Doing at Least Some Good,” Ch. 1 of Corporate Social
Responsibility: Doing the Most Good for Your Company and Your Cause, Wiley, 2005.

6. N. Craig Smith, “Corporate Social Responsibility: Whether or How?”, California Management

Review, Summer 2003.

7. S. C. Johnson & Son, Inc., “Sustaining Values: 2005 S. C. Johnson Public Report.”

8. Simon Zadek, “The Path to Corporate Responsibility,” Harvard Business Review, December 2004.

9. Philip Kotler and Nancy Lee, “Twenty-Five Best Practices for Doing the Most Good for the
Company and the Cause,” Ch. 9 of Corporate Social Responsibility: Doing the Most Good for Your
Company and Your Cause, Wiley, 2005.

10. “Sustaining Growth: Deloitte Touche Tohmatsu Worldwide Member Firms 2005 Review,” at
www.deloitte.com/dtt/cda/doc/content/dtt_2005Review_FINAL_lowrez_121505.pdf.

11. Ida E. Berger, Peggy H. Cunningham, Minette E. Drumwright, “Social Alliances:

Company/Nonprofit Collaboration,” California Management Review, Fall 2004.

12. John A. Pearce II and Jonathan P. Doh, “The High Impact of Collaborative Social Initiatives,” MIT
Sloan Management Review, May 2005.

13. James A. Austin, Herman B. Leonard, and James W. Quinn, “Timberland: Commerce and Justice,”
Harvard Business School Case, December 21, 2004.

14. Business Leaders Initiative on Human Rights, “A Guide for Integrating Human Rights Into Busines
Management,” consultation draft, 2005.

15. National Grid USA, “Operating Responsibly,” 2005.

16. David Vogel, “What Is the Demand for Virtue?”, Ch. 3 of The Market for Virtue: The Potential and
Limits of Corporate Social Responsibility, Brookings, 2005.

17. C. B. Bhattacharya and Sankar Sen, “Doing Better at Doing Good: When, Why, and How
Consumers Respond to Corporate Social Initiatives,” California Management Review, Fall 2004.
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18. Roger L. Martin, “The Virtue Matrix: Calculating the Return on Corporate Responsibility,”
Harvard Business Review, May 2002.

19. Alison Lingane and Sara Olsen, “Guidelines for Social Return on Investment,” California
Management Review, Spring 2004.

20. John A. Quelch, “IBM On Demand Community,” Harvard Business School Case, August 6, 2004.

21. Marc Gunther, “Money and Morals at GE,” Fortune, November 15, 2004.

22. Alan Murray, “Will ‘Social Responsibility’ Harm Business?”, Wall Street Journal, May 18, 2005.

23. General Electric, “Our Actions: GE 2005 Citizenship Report,” at www.ge.com.

24. “Corporate Social Concerns: Are They Good Citizenship Or a Rip-Off for Investors?”, Wall Street
Journal, December 6, 2005.

25. James E. Austin and Cate Reavis, “Starbucks and Conservation International,” Harvard Business
School Case, May 1, 2004.

Some Supplementary Sources

Christine Arena, Cause for Success: 10 Companies That Put Profits Second and Came in First, New
World Library, 2004.

David Hess, Nikolai Rogovsky, and Thomas W. Dunfee, “The Next Wave of Corporate Community
Involvement: Corporate Social Initiatives,” California Management Review, Winter 2002.

Jeffrey Hollender, What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility
to Big Business, and Why Big Business Is Listening, Basic Books, 2004.

Ira A. Jackson and Jane Nelson, Profits with Principles: Seven Strategies for Delivering Value with
Values, Currency/Doubleday, 2004.

Philip Kotler and Nancy Lee, Corporate Social Responsibility: Doing the Most Good for Your Company
and Your Cause, Wiley, 2005.

Michael E. Porter and Mark R. Kramer, “The Competitive Advantage of Corporate Philanthropy,” Harvard
Business Review, December 2002.

Lynn Sharp Paine, Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve
Superior Performance, McGraw-Hill, 2003.

David Vogel, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility,
Brookings, 2005.
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Websites

African Institute for Corporate Citizenship (www.aiccafrica.com)

Amnesty Interational Business Groups (www.amnesty.org.uk/business)
Amnesty International Human Rights Principles for Companies
(www.amnesty.org.uk/business/pubs/hrgc.shtml)
Business & Human Rights Resource Centre (www.business-humanrights.org)
Business for Social Responsibility (www.bsr.org)
CAFOD (www.cafod.org.uk)
The Caux Round Table Principles for Business (www.cauxroundtable.org/index.html)
Christian Aid (www.christian-aid.org.uk)
The Danish Institute for Human Rights (www.humanright.dk)
Dow Jones Sustainability Index (www.sustainability-index.com/)
Ethical Trading Initiative (www.ethicaltrade.org/Z/home/index.shtml)
Ethos Institute (www.ethos.org.br)
Friends of the Earth (www.foe.org.uk)
FTSE4Good (www.ftse.com/ftse4good/index.jsp)
Fund for Peace Human Rights and Business Roundtable (www.fundforpeace.org/programs/hrbrt/hrbrt.php)
GESI – Global E-Sustainability Initiative (www.gesi.org)
Global Reporting Initiative (www.globalreporting.org)
The Global Sullivan Principles (www.thesullivanfoundation.org/gsp/default.asp)
Human Rights Compliance Assessment Tool (www.humanrightsbusiness.org)
Human Rights Watch (hrw.org)
International Chamber of Commerce (www.iccwbo.org)
The International Federation of Free Trade Unions (www.icftu.org)
International Labour Organization (www.ilo.ch)
ILO’s Declaration on Fundamental Principles and Rights at Work
(www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE)
ISO Standard on CSR (www.iso.org/iso/en/ISOOnline.frontpage)
Office of the United Nations High Commissioner for Human Rights (www.ohchr.org)
Organisation for Economic Co-operation and Development (www.oecd.org)
The OECD Guidelines for Multinational Enterprises (www.oecd.org)
The Prince of Wales International Business Leaders Forum (www.iblf.org)
Social Accountability International (www.sa-intl.org)
SA 8000 (www.sa-intl.org)
Social Venture Network (www.svn.org)
United Nations Development Programme (www.undp.org)
UN Global Compact (www.unglobalcompact.org)
Voluntary Principles on Security and Human Rights (www.voluntaryprinciples.org)
World Business Council for Sustainable Development (www.wbcsd.org)
World Health Organization (www.who.int)