MBA 292 Strategic Corporate Social Responsibility

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MBA 292Strategic Corporate Social Responsibility

• Professor Kellie A. McElhaney
• 4.04.07

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Tonight

• Current News
• Project Updates
• Limitations of CSR
• Issues Analyses
• Great Debate Assignments for April 18th Class

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Current News

• The Supreme Court ordered the EPA to explain why
  it has refused to regulate greenhouse gas
  pollution from cars- says it is their job and
  within their jurisdiction (54 vote).
• http//video.msn.com

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Current News

• A unanimous Supreme Court overturned a lower
  court's ruling that would have allowed utility
  Duke Energy Corp. to modernize aging coal-fired
  power plants without reducing air pollutants.
• Automotive engineers at the Union of Concerned
  Scientists (UCS) unveiled a minivan design that
  shows automakers can build affordable vehicles
  with existing technology that would meet or
  exceed global warming pollution standards for
  cars and trucks adopted by California and 10
  other states.
• UCS Vanguard

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Current News

• More than two-thirds (68) of the world is
  concerned about climate change with the South
  Africans (82) and Brazilians (87) most
  concerned, findings from a BBC study said.
• At the low end of anxiety were Americans at 57
  and Indians at 59.

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Current News

• Food Is Top Advertised Product to Children on
  U.S. TelevisionIn what The Washington Post calls
  the "largest study ever conducted of television
  food marketing to children and teens," a study by
  the Kaiser Family Foundation and Indiana
  University finds that of all television
  advertisements during children's shows, 34 are
  for candy and snacks, 28 for cereal and 10 for
  fast foods.
• Harry Potter Heralds Publishing First with
  FSC-Certified PaperU.S. publisher Scholastic
  Corp. has announced that 65 of the 16,700 tons
  of paper used to publish the seventh and last
  Harry Potter book, "Harry Potter and the Deathly
  Hallows," will be certified by the Forest
  Stewardship Council (FSC) as coming from
  sustainability managed forests.
• San Francisco is First U.S. City to Ban Plastic
  BagsSan Francisco's City Council has voted to
  ban plastic bags at the checkout of large
  supermarkets and chain pharmacies within the
  coming year. In the first law of its kind in the
  United States, only compostable or paper bags
  will be allowed.

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Individual Giving by State
Source James Irvine Foundation
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Individual Giving by Region
Source James Irvine Foundation
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Foundation Giving
Source James Irvine Foundation
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Project Updates

• Next Milestone Preliminary Recommendations
• Due April 18th
• Bring hard-copy draft of preliminary
  recommendations presentation to Colleen and me in
  class (2/page)
• Email to liaisons for feedback
• There can still be placeholder slides awaiting
  final data/ analysis we want to review general
  direction, comprehensiveness, focus
• Use consistent template to lay out each
  recommendation

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Limitations of CSR
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Economists Viewpoints
Few trends could so thoroughly undermine the
very foundation of our free society as the
acceptance by corporate officials of a social
responsibility other than to make as much money
for their stockholders as possible.
- Milton Friedman
A large corporation these days not only may
engage in social responsibility, it had damn well
better try to do so. - Paul A.
Samuelson
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Friedmans Argument
Individual responsibility vs. Corporate
responsibility
Taxes vs. regulations
Voluntary v. mandated
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Two Perspectives

• The business of business is business
• The sole legitimate purpose of business is to
  create shareholder value
• Challenges to this perspective?
• CSagghhhh
• CSR in its most fuzzy, ill-defined format
• Companies must also create positive social impact
• Challenges to this perspective?

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The Economists Argument

• CSR initiatives could diminish shareholder
  returns, distract business leaders from their
  focus, and allow companies to continue bad
  behaviors in the shadows

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The Economists Argument

• It is philanthropy at other peoples expense
• Profit-maximizing CSR does not silence the
  critics
• Non-profit-maximizing CSR silences the critics,
  but is unethical
• Companies can pay lip service to CSR, but
  continue to make things worse for communities

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The Economists Argument

• Disenchanted NGOs are now calling for more
  government, when poor government was the reason
  for CSR in the first place
• Seeking profit has made our system as great and
  powerful as it is
• Companies funding CSR just to get negative press
  and NGOs off their backs, not in best interest of
  company or community
• Using company money for CSR is like CEO deciding
  to buy a corporate jet, or expensive shower
  curtain

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A New CSR Framework?
Raises Social Welfare
Reduces Social Welfare
Raises Profits
Reduces Profits
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Myths Reality
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Measure Value in Buckets

• Workplace
• Absenteeism, turnover, grievances, diversity
  profile, pay conditions, etc.
• Marketplace
• Customer complaints, customer satisfaction,
  supplier satisfaction, supplier codes
• Environment
• Energy consumption, water usage, solid waste, CO2
  emissions
• Community
• Pre-tax cash giving, in-kind giving, reputation

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Solutions

• Develop processes to build CSR into highest
  levels of strategy setting (Board seat, map
  relevant issues)
• Actively manage contracts
• Shape societal debates
• Government regulations
• Social labeling
• Changing Corporations legal status/ structure
• Building CSR principles into founding stage of
  companies

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A Reality?
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The Great CSR Debate

• For April 18th (no class next week) you will
  prepare and argue either PRO or CON of CSR as an
  effective/ ineffective business strategy
• PRO Team Leader Mike Abbott
• CON Team Leader Lorin May
• First PRO Team (5-7 minutes to lay out statement
  and position) Pedro, Mike A., Hans, Mike P.,
  Melissa, Matt E.
• First CON Team (5-7 minutes to lay out statement
  and position) Jeff D., Iris, Elizabeth L.,
  Steven O., Lorin, Margot

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Next Class The Great Debate

• Second PRO Team (rebuts first CON, extends
  position, 5-7 minutes) Maria, Sarah, Mike T.,
  Annabelle, Joe, Akif
• Second CON Team (rebuts first PRO, extends
  position, 5-7 minutes) Shirin, Cristin, Adrian,
  Yang-Yang, Wiam, Nick
• PRO Closing Argument (restates position, 3-5
  minutes) Alec, Steven A., Elizabeth S., Theresa
• CON Closing Argument (restates position, 3-5
  minutes) Amy, Gabi, David, Emily

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Next Class The Great Debate

• Judges Q A (10 minutes)
• 3-5 questions per side
• Determine winner
• Give specific feedback/ reasoning for vote,
  discuss what worked, what did not work
• Roni, Daniel, Jennifer, Brooke, Jason
• Time Keeper Jason
• What will your strategy be?

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Good Debating

• Conviction
• Think like opponent
• Cite experts
• Well-prepared presentation
• Use of visuals and words
• Well-researched

• Examples
• Data
• Persuasiveness
• Blend of ethos, pathos, logos
• Strong Communication Skills
• Verbal nonverbal
• Use of physical presence and space