Corporate Social

Responsibility
Lecture 5 and 6

Model of Corporate Responsibility

Generations of CSR
Third Generation

Transformative
Reshaping Markets

Strategic
Evolving Strategies

Tactical (micro)
Fixing Problem

Contemporary Driver of CSR

New & emerging
issues
Shrinking role of the
government
Rising customer
interest

Increasing supply-chain
responsibility

Competitive labour
markets

Why should
managers look
at the
theoretical
propositions in
CSR?

Theoretical positions.. (1)

Friedmans Theory/Fundamentalist Theory

The only social responsibility of business to use its

resources and engage in activities designed to increase
its profits so long as it stays within the rules of the
game, i.e. engages in open and free competition, without
deception or fraud .
The rules of the game suggests that social
responsibility is derived from the general economic
environment or context in which business operates

gal Recognition view: the corporation is an autonomous entity, owned and run
reely constituted group It is not a creation of society.

Theoretical positions ..(2)

Social Contract Theory
Corporation as organization enter into
social contracts with other members of
society, & receive resources, goods and
societal approval to operate in exchange
for good behaviour.
Davis explored the power that business has
on society and the impact of this power.
Enunciated
- Social power equation &
- Iron law of responsibility

Theoretical positions ..(2)

The iron law of responsibility

The social power equation

Social responsibilities of
businessmen arise from the amount
of social power that they have.

Whoever does not use his social

power responsibly will lose it
because other groups will eventually
step in to assume those
responsibilities.

Theoretical Position(3)
Social Justice Theory
Focuses on fairness and distributive
justice : how and according to what
principles, societys goods are
distributed amongst the members of
society.
Corporate managers need to consider
how these goods can be appropriately
distributed in society

Theoretical Position(4)
Rights Theory
Concerned with the meaning of rights,
including basic human rights and property
rights.
Property rights should not override human
rights.
Shareholders of a corporation have certain
property rights, this does not give them
license to override the basic human rights of
employees, local community members and
other stakeholders.

Theoretical Position(5)
Deontological Theory
Everyone, including corporate managers,
has a moral duty to treat everyone else
with respect listening and considering
their needs: Golden Rule
If society in general believes that
sustainable development is a worthwhile
goal, corporations have an ethical
obligation to help society move in that
direction.

Theoretical positions.. (6)

Stakeholder Theory
Strategic management concept
Corporations strengthen relationship
with external groups to develop
competitive advantage.
Companys own best economic
interest to meet its business
objectives.

Theoretical positions.. (7)

Trusteeship Theory
Spiritualizing economics : concept of
Trusteeship
Private property capitalism into
public property social institution
based on social good rather than
individual and collective greed.

Approaches to CSR
Triple Bottom Line
Socially Responsible Investment