CORPORATE SOCIAL

RESPONSIBILITY
CHAPTER 6
 LEARNING OBJECTIVES:

 Explain the concepts of corporate social

responsibility.

 Elucidate the basic premises, arguments for and

against CSR.

 Reason out on the need of a CSR initiative.

 LEARNING OBJECTIVES:

 Enumerate and discuss the ethical decision making

process.

 Describe the issues considered in social screening of

investments.

 Exhibit understanding of corporate greenwashing.

What is CSR?
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the eighteenth century, the

greatest economist and philosopher
Adam Smith articulated the
CSR HISTORY
traditional or classical economic
model of business.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 This model suggested that the needs

CSR HISTORY and desire of the society could be
best be met by free-for-all
interactions of individuals and
organizations in the marketplace.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the century after Adam Smith,

many of his principles advocated
CSR HISTORY were born out as the introduction of
new technologies allowed for more
efficient production of goods and
services.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the late 19th century, many

believed in and practice a
CSR HISTORY philosophy that called “Social
Darwinism.” in simple form, is the
idea that the principles of natural
selection and survival of the fittest
are applicable to business and social
policy.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 Around the beginning of the 20th

century a backslash against the
large corporations. They were
CSR HISTORY criticized as being to be too
powerful and for practising anti-
social and anti-competitive
practices.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 Laws such as Sherman Antitrust Act

were enacted to rein in the large
CSR HISTORY corporations and to protect
employees, consumers and society
at large.
 CONCEPT OF CORPORATE SOCIAL
RESPONSIBILITY

 In the 1960s and 1970s, the civil right

movement consumerism, and
CSR HISTORY environmentalism affected society’s
expectations of business.
 ARGUMENTS FOR AND AGAINST
CORPORATE SOCIAL RESPONSIBILITY

Arguments For: Arguments Against:

• Public expectation • Violation of profit
• Improved financial performance
• Ethical obligations maximization
• Enhanced brand image &
reputation
• Dilution of purpose
• Better environment • Costs
• Reduce regulatory oversight &
government control • Too much power
• Increased ability to attract and
retain employees
• Lack of skills
• Stockholder’s interest • Lack of accountability
• Easier access to capital/
resources • Lack of broad public
• Risk management support
 BASIC PREMISES OF CSR
Business Leaders

investors
Consumers
Employees

Local communities
Media
Regulators
 RELEVANCE OF CSR

 Changing social expectations

 Competitive labor markets

 RELEVANCE OF CSR

 Disclosure demands by stakeholders

 Dwindling government role
 Globalization
 Pressure from investors
 Supplier relations
 Wealth and vulnerability
 ETHICAL LEADERSHIP

 Is a leadership that is concerned in leading in a

manner that respects the rights, dignity, and stakes
of others.
 Focuses on how leaders employ their business and
political power in the decisions they make and
actions they engage into.
ETHICAL DECISION MAKING PROCESS
IN ORGANIZATIONS
CSR Principles
The Option of Doing
Nothing

Withdraw

Be Conscious of
Be An Archivist Long-Term Effects
ETHICAL DECISION MAKING PROCESS
IN ORGANIZATIONS
CSR Principles

Ask Around

Be Comprehensively
Consider Sensitive
Legalities and
Ethics
ETHICAL DECISION MAKING PROCESS
IN ORGANIZATIONS
CSR Principles

Do Not Be A Dangerous
Find a Win-Win Solution
“Alpha Male”
 MYTHS ABOUT ORGANIZATIONAL
ETHICS

 Being ethical is easy

 Being ethical is not part of doing business

 Being ethical brings no benefit

 WHAT ETHICS IS NOT

 Ethics is not the same as feelings

 Ethics is not religion

 Ethics is not just following the laws

 Ethics is not following culturally accepted norms

 Ethics is not science

 CORPORATE CITIZENSHIP

Refers to the acceptance by a business of a conscious effort in

focusing and in satisfying the economic, legal, ethical,
philanthropic and social responsibilities and other acts expected
from the corporations to do to its stockholders.
 ELEMENTS OF CORPORATE
CITIZENSHIP

• Commitment to quality

• Ethical legal compliance

• Stewardship and governance

• Superior employee relation

• Social advocacy

• Environmental advocacy

• Community involvement
PHILANTHROPY AND SOCIAL
INITIATIVES

What is
Philanthropy?
 BENEFITS OF CORPORATE
PHILANTHROPY
Benefits to Benefits to the
Benefits to Business
stakeholders community
 Enhance  Build employee  Improves quality
corporate morale and of life of the
reputation engagements community
 Improves relations  Enlarge sense of members
with the community and  Provides human
government, the social obligations and capital
community and  Develops future resources to non-
the key workforce profit
stakeholders contributing to a organizations
 Supports a sustainable
company’s company
strategic business
goals
SOCIAL SCREENING OF INVESTMENTS

 “Scarce-off from” Strategy

 Impact Mitigation

 Whoever Is The Best

 Main or Derivative Connections

 CORPORATE GREENWASHING

It refers to the practice of companies characterized by

deceptively making it appear that their products, services and
policies are environmentally friendly by projecting cost cuts as
reduction in use of resources or investments in “Green
Concerns” like in areas of ecology and environment.
 GREENWASHING SINS

 Sin of the hidden trade-off

 Sin of no proof
 Sin of vagueness
 Sin of irrelevance
 Sin of fibbing
 Sin of lesser of two evils
 The sin of worshiping false labels
 WAYS ON HOW TO SPOT
GREENWASHING

 Poor use of scientific facts.

 The use of buzz words like “carbon intensity”, “sustainable
development”, “carbon offsets” and “clean technology.”
 Look at the environmental label on the product.
 Never abandon common sense.
 Look out for negligible green claims.