Corporate Social Responsibility

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Corporate Social Responsibility

• Mayookapan Chaimankong
• Mayookapanc_at_hotmail.com

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Corporate Social Responsibility

• Discussion
• 1) ?????? CSR ??????????????
• 2) Motive ??? Firm ????? CSR ????????
• 3) ???????????????????? CSR ?????????????????????
  ?

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CSR VS CG
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Defining CSR

• What is CSR?
• Lack of a widely agreed definition

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Defining CSR CSR as an ethical stance

• Mintzberg stated that CSR can be practised in
  four forms
• 1) Purest form Firm expects nothing back
• 2) Enlightened self interest Undertake CSR
  with the belief that CSR pay
• 3) Sound investment Undertake CSR will be
  rewarded by the market
• 4) Avoid Interference Prevent authorities
  forcing them to do so via legislation

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Defining CSR CSR as an ethical stance

• Apart from the purest form, Mintzberg sees the
  others not as ethical stance as it raises greed
• The proponents of this view include Moore (2003),
  Goyder (2003) and Jone (2003)

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Defining CSR CSR as business strategy

• Ideas originates from Agency Theory
• Agency Theory managers are agents of the
  stockholders and should therefore give priority
  to serving them by maximize financial gains
• Implication manager should not engage in any
  acts that deteriorate shareholder wealth
• Friedman (1970) and Henderson (2001, 2004) have
  argued that CSR is a dangerous concept as its
  threaten the basic of principle of market economy

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Defining CSR CSR as business strategy

• Many others believe that CSR can become a useful
  tool to maximize shareholders wealth
• Lantos (2001, 2002) purposed that CSR should
  focused on two aspects
• 1) Prevent injuries and harm form
  business activities
• 2) Accomplishing strategic business
  goals

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Defining CSR CSR as business strategy

• Carroll (1979) purpose Four faces of
  responsibility to fully address the entire range
  of obligations business has to society
• Economic the first and foremost responsibility
• Legal obligation to abide the law
• Ethical Doing beyond law requirement
• Discretionary Philanthropic contribution
• Firm will use CSR to devise a strategy to enhance
  overall business performance

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Carrolls Pyramid of Social Responsibility
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Defining CSR CSR as business strategy

• Schwartz and Carroll (2003) purpose Three domain
  model which built upon Carroll pyramid model
• Discretionary is disappeared as the author
  believe that discretionary is an option, not
  obligation. However discretionary acts can be
  undertaken for economic and ethical motive (i.e.
  strategically)
• They argued that the best business strategy lies
  in the overlap area

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Three domain model The multiple responsibilities
of business
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CSR Serving Stakeholders

• Regardless of the views, the way stakeholders are
  treat take central stage.
• CSR as Ethical stance The company treat
  stakeholder ethically due to the belief that it
  is a noble way to behave
• CSR as Strategy Stakeholder are treated
  ethically to make business prosper

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The Evolving Idea of Social Responsibility

• The fundamental idea is that corporations have
  duties that go beyond carrying out their basic
  economic function in a lawful manner.
• Over time the doctrine has evolved to require
  more expansive action by companies largely
  because
• Stakeholder groups have gained more power to
  impose their agendas
• The ethical and legal philosophies underlying it
  have matured

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Social Responsibility in Classical Economic Theory

• Adam Smith introduced the expression of
  invisible hand in 1770s
• Invisible hand brought about economic prosperity
  and social benefits even though their real
  intentions were the pursuit of self-interest. In
  other words, Social welfare is the by-product
  of capitalist activities
• Implication Firm operating to maximize profit
  within the law.

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The beginning of CSR

• In US, the idea of CSR appeared around the 19th
  Century. Firms came under attack for being to
  big, too powerful, and guilty of antisocial
  practices
• A few far farsighted business executive began to
  use their power for broad social purpose

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The Early Charitable Impulse

• Steven Girard changed the climate of education in
  the United States by donating 6 million for a
  school to educate orphaned boys.
• John D. Rockefeller systematically gave away 550
  million over his lifetime.
• Henry Ford developed paternalistic programs to
  support the recreational and health needs of his
  employees

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The Early Charitable Impulse

• Andrew Carnegie gave 350 million over his
  lifetime to causes that would elevate the culture
  of a society.

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Two traditional principle of CSR

• The Charitable principle the wealthier members
  of society should be charitable toward those less
  fortunate
• The Stewardship principle Act as stewards or
  trustees, act in general public interest

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Two traditional principle of CSR
Foundation principles of corporate social responsibility and their modern expression. Foundation principles of corporate social responsibility and their modern expression. Foundation principles of corporate social responsibility and their modern expression.
Charity Principles Stewardship Principle
Definition Business should give voluntary aid to societys needy persons and groups. Business, acting as a public trustee, should consider the interests of all who are affected by business decisions and policies.
Modern Expression Corporate philanthropy Voluntary actions to promote the social good Acknowledging business and society interdependence Balancing the interests and needs of many diverse groups in society
Examples Corporate philanthropic foundations Private initiatives to solve social problems Employee volunteerism Enlightened self-interest Meeting legal requirements Stakeholder approach to corporate strategic planning
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Recommended social responsibility action
Recommended social responsibility actions Committee for Economic Development. Source Social Responsibilities of Business Corporations (New York Committee for Economic Development, 1971). Recommended social responsibility actions Committee for Economic Development. Source Social Responsibilities of Business Corporations (New York Committee for Economic Development, 1971).
Economic growth and efficiency Improving productivity Cooperating with government Education Giving aid to schools and colleges Assisting in managing schools and colleges Employment and training Training disadvantaged workers Retraining displaced workers Civil rights and equal opportunity Ensuring equal job opportunities Urban renewal and development Building low-income housing Improving transportation systems Pollution abatement Installing pollution controls Developing recycling programs Conservation and recreation Protecting plant and animal ecology Restoring depleted lands to use Culture and the arts Giving aid to art institutions Medical care Helping community health planning Designing low-cost medical care programs Government Improving management in government Modernizing and reorganizing government
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CSR Classification (By activities)
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CSR in Thailand
??????????? "?????????????? CSR ?????????????
?.?.2549 ??????????????????????????????
Positioning ?????? CSR ??? "?????? ??????

• ????????? cause philanthropy ????????????????????
  ???????????????? ?.?.2549 ??????? 52.5
• ?????????? ?????? cause promotion ????
  ??????????????????????????????????????? 29.6
• ??????? corporate social marketing
  ??????????????????????????????????????????????????
  ??????????????????????????????????????
  ???????????????????????????????????? 9.5
• cause related marketing ?????????????????????????
  ???????????????????????????????????????? 9.5

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CSR in Thailand

• socially responsible business practice
  ??????????????????????????????????????????????????
  ??????????????????????????????????????????????????
  ?????????? ?????????????????????
  ?????????????????? ????????????????????????? 2.2
  
• community volunteering ???????????????????????
  0.6

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Cause Promotions
Provides funds, in-kind contributions, or other
organization resources to increase awareness and
concern about a social cause
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Cause Related Marketing
Commits to making a contribution or donating a
percentage of revenues to a specific cause based
on product sales e.g. donate 10 of the price of
each product sold
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Cause Related Marketing RED Campaign Example It
is the first time that the worlds leading
companies have made a commitment to channel a
portion of their profits from sales of
specially-designed products to the Global Fund to
support AIDS programs for women and children in
Africa.
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Social Marketing
Supports the development and/or implementation of
a behavior change campaign e.g. Non-smoking
campaign, No plastic bag
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Corporate Philanthropy
Makes a direct contribution to a charity or
cause, most often in the form of cash grant,
donations and/or in-kind service
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Community Volunteering
Supports and encourages employees, retail
partners, and/or franchise members to volunteer
their time to support local community
organization and causes
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Community Volunteering
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Socially responsible business practices
Adopts and conducts discretionary business
practices and investments that support social
causes to improve community well-being and
protect the environment e.g. community trade,
environmental friendly process
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Socially responsible business practices
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Socially responsible business practices
Starbucks example
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CSR Classification (By process)

• CSR after process CSR that separated from
  business operation Legitimacy
• CSR in Process Incorporate social responsibility
  in business operation
• CSR as Process non profit organization

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CSR Classification (By Resource)

• Corporate driven CSR CSR that use the resource
  from within e.g. employee volunteers
• Social Driven CSR CSR that use the resource from
  outside e.g. cause related promotion

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Corporate Social Responsibility Guideline and
standards

• There are number of CSR guideline and standards
  (Both International Local)
• - UN Global compact
• - OECD
• - ISO 26000
• - SEC ????????????? Responsibility
  Guidelines

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The United Nations and the Global Compact

• The Global Compact is a way of getting companies
  to voluntarily apply widely agreed upon
  principles to individual situations.

Global Compact A set of 10 voluntary principles
based on international norms administered by the
United Nations. Member companies are to follow
the principles in every country in which they do
business.
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The United Nations and the Global Compact
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OECD Guideline
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?????????????Responsibility Guidelines
???????????????????????? CSR ??????????? 8 ??????
?????? 1. ??????????????????????? 2.
?????????????????????????????? 3.
???????????????????????????????????????????????? 4
. ????????????????????????? 5. ???????????????????
?????? 6. ??????????????????????? 7.
??????????????????????????????????????????????????
? 8. ?????????????????????????????????????
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?????????????Responsibility Guidelines
1. ??????????????????????? ??????? ???????????????
???????? ?????????????????????????????????????????
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2. ??????????????????????????????? ??????? ???????
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??????? ??????????????????????????????????????????
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??????????
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?????????????Responsibility Guidelines
3. ???????????????????????????????????????????????
? ??????? ????????????????????????????????????????
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4. ????????????????????????? ??????? ??????
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Responsibility Guidelines
5. ????????????????????????? ??????? ?????????????
??????????? ???????????????????????????
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???/???? ?????????????????????????????????????????
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6. ??????????????????????? ??????? ???????????????
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???????????????
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Responsibility Guidelines
7. ???????????????????????????????????????????????
???? ??????? ??????????????????????????????? CSR
????????????????????????????? ????????????????????
??????????? ??????????????????????????????????????
???????????????? CSR ??????????????
??????????????????????????????????????????????????
??????????????????????????????????? ? ???
(innovative business
8. ????????????????????????????????????? ??????? ?
??????????????????????????????????????????????????
???????????????????????? CSR ?????????????????????
? ????????????????????????????????????????????????
?????????????(stakeholders) ???????????
?????????????????????????????????????
???????????????????? CSR???????????????????????
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Responsibility Guidelines
8. ?????????????????????????????????????
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ISO 26000

• ISO 26000 ??????????????????????????? ?.?. 2548
  ????????? ??????????????????????????? ?.?.
  2553 ??????????????????? (guidance document)
  ??????????????????????????????????
  ???????????????????????????????????????? ???????
  ??????????????????????????????????????????????????
  ?????????????????????????????????? 5 ???????
  ?????? ??????????? ?????? ???????????
  ???????????? ?????????????????????????????????????
  ?

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ISO 26000

• ??????????????????????????????????
  ?????????????????????????????????????????????
  ?????? ISO 26000 ?????????????????????????????????
  ???????? 7 ?????? ??????
• 1.????????????????????????? (Organization
  governance) ???????? ?????????????????????????????
  ??????????????? ?????????? ???????????????????????
  ??????????????????????????????????????????????????
  ??????????????????????? ??????????????????
  ??????????????????????????????????????????????????
  ???????????????
• 2.???????????????????? (Human rights)
  ?????????????????????????????????
  ??????????????????????????????????????????????????
  ???????????????? ???????????????? ?????
  ??????????? ??????????????????????????????????

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ISO 26000

• 3.???????????????????? (Labor practices)
   ?????????????????????????????????????
  ??????????????????????????????????????????????????
  ?????
• 4.?????????????????? (Environment)
  ??????????????????????????????????????????????????
  ???????????????????????? (Sustainable
  consumption) ?????????????????????????????????????
  ?????????????????????????
• 5.???????????????????????????? (Fair
  operating practices) ???????????
  ??????????????????????????????????????
  ??????????????????????????????????????????????????
  ??????? ????????????????????????????????????????
  ??????????????????????????????????????????????????
  ???????????????

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ISO 26000

• 6.????????????????? (Consumer issues)
  ??????????????????????????????????????????????????
  ??????????????????????????????????
   ?????????????????????????????????????????????????
  ??????????????????????? ??????????????????????????
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  ????????????????????????????? ????????????????????
  ??????????????????? ??????????????????????????????
  ???????????????????????? ?????????????????????????
  ?????????
• 7.?????????????????????????? (Contribution to
  the community and society)

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The pros and cons of corporate social
responsibility.
The pros and cons of corporate social responsibility. The pros and cons of corporate social responsibility.
Arguments for corporate social responsibility Balances corporate power with responsibility. Discourages government regulation. Promotes long-term profits for business. Responds to changing stakeholders demands. Corrects social problems caused by business. Arguments against corporate social responsibility Lowers economic efficiency and profit. Imposes unequal costs among competitions. Imposes hidden costs passed on to stakeholders. Requires social skills business may lack. Places responsibility on business rather than individuals.
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Limits of CSR

• Legitimacy Social expenditures are considered to
  be a lawful use of shareholders fund
• Costs Every social action is accompanied by
  costs of one kind or another
• Efficiency CSR can potentially reduce efficiency
  and affect its ability to compete in the
  marketplace
• Scope and Complexity Some social problem are too
  massive and too complex

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Are Social and Financial Performance Related?

• A recent review of 95 studies over 30 years found
  that a majority (53 percent) of businesses showed
  a positive relationship between profits and
  responsibility, while only 5 percent showed a
  negative one.
• Results inconsistent and ultimately inconclusive
  due to methodological questions.
• Safe to say corporations rated high in social
  responsibility are no less profitable than lower
  rated firms.