BUS100

Week 3
History of CSR & CSR
Dr Shora Moteabbed
 Corporate Social Responsibility (CSR)

Seriously considering the impact of

a company’s actions on society.
Corporate
Requires the individual to consider
Social his/her acts in terms of a whole
Responsibility social system, and holds him/her
responsible for the effects of acts
anywhere in that system.

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 History of CSR

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https://www.tsiconsultancy.com/category/corporate-social-responsibility/page/2/
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https://www.unido.org
 Arguments Against CSR

 Restricts the classic  Increases the power of

economic goal of profit business
maximization

 Limits the ability to

 Business is not compete in a global
equipped to handle
social activities marketplace

 Dilutes the primary

purpose of business

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 Arguments For CSR

 Addresses social issues  Addresses issues by

brought on by business, using business resources
and allows business to be and expertise
part of the solution
 Addresses issues by
 Protects business being proactive
self-interest
 The public supports CSR
 Wards off future
government intervention

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 Corporate Citizenship

 A reflection of shared moral and ethical principles

 A vehicle for integrating individuals into the

communities in which they work

 A form of enlightened self-interest that balances

stakeholders’ claims and enhances a company’s
long-term value

Charles J. Fombrum, “Three Pillars of Corporate Citizenship” 7

 Stages of Corporate Citizenship

Figure 2-11 8
 Corporate Responsibility
in the 21st Century

 Demonstrate a commitment to society’s values and

contribute to society’s social, environmental, and
economic goals through action.
 Insulate society from the negative impacts of
company operations and its products and services.
 Share benefits of company activities with key
stakeholders as well as with shareholders.
 Demonstrate that the company can make more
money by doing the right thing.

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 Activity

In groups of 4-5 students:

Choose a company
Look up their mission/ vision/ strategy for traces of
CSR
Check their CSR related activities addressed on the
website
Look for scandals, crisis situations etc. and how the
company reacted.

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 “Triple Bottom Line” Perspective

Key Spheres of Sustainability

1. Economic

2. Social

3. Environmental

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 Legal Responsibilities

 Law cannot address all the topics or issues that

business may face

 Law often lags behind more recent concepts of what

is considered appropriate behavior

 Laws are made by lawmakers and may reflect the

personal interests/motivation of legislators rather
than appropriate ethical justifications

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 A Stakeholder View of CSR

Stakeholder Group Addressed and Primarily Affected

CSR Owners Con- Employees Community Others

Component sumers

Economic 1 4 2 3 5

Legal 3 2 1 4 5

Ethical 3 1 2 4 5

Philanthropic 3 4 2 1 5

Figure 2-4 14
 Benefits of Corporate Citizenship

 Improved employee relations

 Improved customer relationships

 Improved business performance

 Enhanced company’s marketing efforts

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 Business’s Interest in
Corporate Citizenship

Nonacademic Research

 Fortune's ranking of “Most Admired” and

“Least Admired” corporations

 Conference Board’s Ron Brown Award

for Corporate Leadership

 CRO Magazine Awards

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 “Multiple Bottom Line” Perspective

Owner
Owner Stakeholders’
Stakeholders’
“Bottom
“Bottom Line”
Line”
Consumer
Consumer Stakeholders’
Stakeholders’
“Bottom
“Bottom Line”
Line”
Corporate
Corporate Employee
Employee Stakeholders’
Stakeholders’
Social
Social “Bottom
“Bottom Line”
Line”
Performance
Performance
Community
Community Stakeholders’
Stakeholders’
“Bottom
“Bottom Line”
Line”
Other
Other Stakeholders’
Stakeholders’
“Bottom
“Bottom Line”
Line”
Figure 2-14 17
 Socially Responsible
or Ethical Investing

A technique used to screen

Social
firms for socially-responsible
Screening investment purposes

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 Reasons for Upsurge in
Socially Responsible Investing

1. More reliable research on CSP

2. Investment firms using social criteria have

solid track record

3. The socially conscious 1960s generation is

making investment decisions

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 Social and Financial
Performance Relationship
Perspective 1: CSP Drives the Relationship

Good Corporate
Good Corporate Good Corporate
Financial
Social Performance Reputation
Performance

Perspective 2: CFP Drives the Relationship

Good Corporate
Good Corporate Good Corporate
Financial
Social Performance Reputation
Performance

Perspective 3: Interactive Relationship Among CSP, CFP, and CR

Good Corporate
Good Corporate Good Corporate
Financial
Social Performance Reputation
Performance

Figure 2-13 20
 Until 1930: Extreme power of corporations, great
depression, limited CSR more in the form of philanthropy
and improving working conditions
 1935–1950 Big corporations regain power, New Deal and
start of the welfare state
1945–1960 state enterprises (former colonies, Communist
bloc) and postwar consensus (US), starting talks about CSR
1960–1970 Return of business and society debate, still more
talks than action
1970–1980 Shift from responsibility of leaders to
responsibility of companies, actions

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 1975–1985 Debate about the nature of
responsibilities 
 1975–1990 Corporate responsibility as management
practice (e.g. corporate social responsiveness)
1980–1990 Introduction of stakeholder theory
1990–2000 Environmental management
1990–2000 Corporate social performance
1995–now Stakeholder partnerships
2000–now Business and poverty
2000–now Sustainability

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 CSR: Evolving Viewpoints

1. CSR considers the impact of the company’s actions on

society.

2. CSR requires decision makers to take actions that protect

and improve the welfare of society as a whole along with
their own interests.

3. CSR supposes that the corporation has not only economic

and legal obligations, but also certain responsibilities to
society which extend beyond these obligations.

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 CSR: Evolving Viewpoints

4. CSR relates primarily to achieving outcomes from

organizational decisions concerning specific
issues or problems which (by some normative
standard) have beneficial rather than adverse
effects upon pertinent corporate stakeholders. The
normative correctness of the products of corporate
action have been the main focus of CSR.

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