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Corporate social responsibility 1


Corporate social responsibility (1) It's easy to choose between good and bad. ... The debate about corporate social responsibility (CSR) began in the early 20th ... – PowerPoint PPT presentation

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Title: Corporate social responsibility 1

Corporate social responsibility (1)
  • Its easy to choose between good and bad. When
    competing goods seem to clashlike conflicting
    claims from the legitimate stakeholders of an
    organizationit is often harder for managers to
    make good decisions.

Corporate social responsibility (2)
  • As well see, the conceptualization of corporate
    social responsibility offered in your textthat a
    corporation should be held accountable for any of
    its actions that affect people, their
    communities, and their environmentmay be a bit
    too broad (but not too much so).

Corporate social responsibility (3)
  • Remember that any social institution that fails
    to use its power in a socially-responsible way is
    likely to lose it. (The flip side is that
    institutions seen to be powerful will face
    demands to use their power in socially-responsible

The history of CSR (1)
  • The debate about corporate social responsibility
    (CSR) began in the early 20th century, as
    concerns about large corporations and their power
    came to the fore. Two broad principlescharity
    and stewardshiphave help to shape thinking about

The history of CSR (2)
  • Ida Tarbells 1904 work The History of the
    Standard Oil Company helped lead to the Supreme
    Courts decision to break up the company on
    antitrust grounds. Similarly, Upton Sinclairs
    1906 book The Jungle led to the passage of the
    Pure Food and Drugs Act and the Meat Inspection
    Act by Congress. The Triangle Shirtwaist Fire of
    1911 led to demands for businesses to ensure
    worker safety.

Arguments for CSR
  • The arguments for CSR tend to focus on the
    relationship between power and responsibility,
    the need for good stakeholder relations, and
    business desire to forestall government
    regulation. (The notion of enlightened
    self-interest also fits in here.)

Arguments against CSR
  • The arguments against CSR tend to focus on the
    economic function of business (to make products,
    not to solve social problems that are the
    responsibility of individuals, society, and the
    government), the imposition of unequal costs on
    some companies and stakeholders, and lower
    economic efficiency.

Achieving balance (1)
  • Businesses need to balance economic, legal, and
    social responsibilities in order to achieve
    long-run success. More generally, there is a
    often a relationship between good social and good
    financial performance.

Achieving balance (2)
  • Further, firms that are seen as acting
    illegitimately are likely to face difficult
    relations with employees, governments,
    communities, and consumerswhich all have direct
    impacts on the top and bottom lines.

Achieving balance (3)
  • One defense of the shareholder view of CSR is
    that shareholders take on a unique set of risks,
    but other stakeholders are protected by
    contractual relations with organizations. But
    Enron and other companies illustrate that most
    stakeholders take on risksometimes without
    knowing it.

And finally. . .
  • One result of increasing globalization is that
    there are many different voices around the world
    with differing views on corporate social
    responsibility. What is seen as ethical in one
    country may not be in another (like GMOs).
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