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Meaning and

origins of
corporate
responsibility

Introduction

CR not new concept - concern with its notions dated


to Code of Hammurabi
but gained mainstream recognition last 5 to 10
years.
Why?
Globalization vs global inequality
Rise of new superpowers
Economic growth but

environmental degradation, resource depletion

Conflicts:

intergenerational, wealth distribution, companies v nation states,


stakeholders

Companies roles & importance changing


No real alternative to free market economics
But how powerful should Business be?

Definitions of CR

No definitive definition many


Also different related concepts:
Corporate Social Responsibility
Corporate Sustainability
Corporate Citizenship

Does CR begin where the law ends?

Voluntary & self regulatory

Definitions of CR: some


examples

Chiquita 2004

CSR commits us to operate in a socially


responsible way everywhere we do business,
fairly balancing the needs and concerns of our
various stakeholders all those who impact,
are impacted by, or have a legitimate interest in
the Companys actions and performance

Confederation of British Industry 2001

CSR requires companies to acknowledge that


they should be publicly accountable not only for
their financial performance but also for their
environmental record.
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Definitions of CR

Different definitions emphasise different


elements
Eg:

Stakeholders
Accountability
Ethics
Environment
Social record

In short the VALUES that companies uphold,


eg:

Honesty, fairness, integrity

Often reflected in
Standards
Codes of practice

Instrumental value (the business case)


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Frameworks for
understanding CR

Blowfield and Murray on CR

an umbrella term that captures the


variety of ways in which business
relationship with society is being defined,
managed and acted upon.
Motivations

Values motivation

Materiality motivation

Business ethics

Business case?

Focus on societally beneficial


outcomes

Focus on societal challenges


with resultant material benefits
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Frameworks for
understanding CR

One example: in terms of

RESPONSIBILITIES
Discretion
ary

Ethical

Legal

Desireable but
discretionary

Beyond legal
compliance, not
economic

Confines of the
law

Responsibility
= to produce
goods/services

Contribute to
societal good

Over and
above
regulation/econ
omic
rationalism

In CR terms
adhere to
regulation, still
make profit

Profit motive =
only valid
motive

Eg
Philanthropy

Doing less
harm v doing
more good

Hard and soft


law

All else =
misuse of
owners capital

Economic

Case study 1

Pharmaceuticals and corporate


responsibility

Limitations to CR

Responsibilities/frameworks:
Hierarchy?
Cherry picking?
New issues, new concepts dictate focus
(eg climate change)
Long term v short term

Origins of Corporate
Responsibility

Evolved with:

Free-market capitalism
Rise of corporate personality (the company)

Adam Smith separation of ownership & control =


problem prophetic?

i.e. since industrial revolution


20th century fluctuations

Regulation v laissez-faire
Post WWII

Corporate scandals eg Coke, IBM, in bed with the Nazis


Environmental degradation

Globalization era
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Key thinkers (a sample)

Adam Smith
Karl Marx
Milton Friedman
John Maynard Keynes
Rachel Carson (Silent Spring)
Joseph Stiglitz
Naomi Klein
Joel Bakan
John Kenneth Galbraith
Noam Chomsky
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Some final thoughts:

Sunday 9 Feb 2014:

Tuesday 11 Feb 2014:

http://www.theguardian.com/business/2014/feb/09/barclays-catastroph
ic-theft-customer-files

http://www.bbc.co.uk/news/business-26133654
http://www.theguardian.com/business/nils-pratley-on-finance/2014/f
eb/11/barclays-bonuses-pay-for-performance

Institute of Directors corporate


governance director Roger Barker asked
"for whom is this institution being run?

http://www.theguardian.com/business/2014/feb/11/barclays-hikes-bonu
ses-profits-slide
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Case study 2

Cadbury and slavery revisited

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