Corporate Social

Responsibility
9 Corporate social Responsibility
 Orientation towards CSR- framework
 Models and theories-instrumental, political, integrative and ethical theories.

10 Strategies to Manage CSR

 strategic options, and managing CSR internally and externally
 Collaborative approaches to meet socially responsible objectives.
Corporate Social Responsibility
As an Evolving Concept
Early Definitions -
• CSR means seriously considering the impact of a company’s actions
on society.
• CSR requires the individual to consider his or her acts in terms of a
whole social system, and holds him or her responsible for the
effects of his or her acts anywhere in that system.
• These definitions provide useful insights into the concept of
Corporate Social Responsibility.
Corporate Social Responsibility
Related Concepts
Traditional CSR Patterns Newer Terms with Similar
Emphasize: Meanings

Corporate Social Responsibility Corporate Citizenship (CC) - Views

Emphasizes Obligation, companies as citizens and all this
Accountability implies

Corporate Social Responsiveness Corporate Responsibility (CR) – Broadly

Emphasizes Action, Activity Focuses on all categories of corporate
Responsibility

Corporate Social Performance Sustainability (SUS) –

(CSP) Emphasizes Outcomes, Emphasizes longer-term concern for
Results people, planet and profits
Historical Perspective on CSR
Evolving Meanings of CSR
• CSR:
• …is seriously considering the impact of the company’s actions on
society.
• … is the obligation of decision makers to take actions which protect
and improve the welfare of society as a whole, along with their own
interests.
• …supposes that the corporation has economic and legal obligations
as well as responsibilities to society that extend beyond these
obligations.
The Four Components of CSR
Societal
Responsibility Expectation Examples

Be profitable. Maximize sales,

Economic Required minimize costs.

Obey laws, adhere to

Legal Required regulations.

Avoid questionable practices.

Ethical Expected Do what is right, fair, and just.

Desired/ Be a good corporate citizen.

Philanthropic
Expected Give back.
The Pyramid of CSR

A stakeholder perspective focuses on the CSR

pyramid as a unified whole.
The CSR Equation

A stakeholder perspective focuses on the CSR

pyramid as a unified whole.

© 2018 Cengage 8
Top 20 Activities or Characteristics
of
a Socially Responsible
• Makes products that are safe. Company
• Responds quickly to customer
problems.
• Does not pollute air or water.
• Obeys the law in all aspects of business. • Maintains waste reduction program.
• Promotes honest or ethical employee • Provides or pays portion of medical
behavior. costs.
• Commits to safe workplace ethics. • Promotes energy conservation
• Does not use misleading or deceptive program.
advertising. • Helps displaced workers with
• Upholds stated policy banning placement.
discrimination.
• Gives money toward charitable or
• Utilizes “environmentally friendly” educational causes.
packaging.
• Protects employees against sexual • Utilizes only biodegradable or
harassment. recyclable materials.
• Recycles within company. • Employs friendly or courteous or
• Shows no past record of questionable responsive personnel
activity. • Tries continually to improve quality.
© 2018 Cengage 9
Theories of CSR

• Instrumental
• Political
• Integrative
• Ethical
Instrumental
Theory
• Businesses engage in social and environmental initiatives primarily to
serve their own self-interests and to achieve tangible benefits that
contribute to their financial performance.
• Views CSR activities as strategic investments.
• Profit Maximization
• Risk Management
• Enhanced Reputation
• Cost Savings
Political
Theory
• Advocates for business’ responsibility to address social and
environmental issues beyond their economic interests.
• Views CSR as a way for businesses to contribute to broader societal
goals and to participate in shaping public policies
• Corporate citizenship
• Stakeholder Pressure
• Public Policy Influence
• Social Justice
Integrative
Theory
• Advocates for the integration of social and environmental
considerations into the core business strategy and operations of
companies.
• This perspective focus on alignment of business goals with societal
needs and values, aiming for mutual benefit for both the company and
society
• Shared value
• Innovation
• Stakeholder engagement
• Long term sustainability
Ethical
Theory
• Focuses on the moral obligations of businesses to act ethically and
responsibly toward all stakeholders, beyond mere compliance with laws
and regulations.
• Views CSR as a matter of ethical principles and values, guided by
considerations of fairness, justice, integrity, and respect for human
rights.
• Ethical Decision making
• Respect for Human dignity
• Sustainability and Responsibility
• Social Justice
Arguments against CSR -
• Classical Economics: The classical economic view is that business’s
only goal is the maximizing of profits for owners.
• Business Not Equipped: Business is not equipped to handle social
activities.
• Dilutes Business Purpose: It dilutes the primary purpose of business.
• Too Much Power Already: Businesses have too much power already.
• Global Competitiveness: It limits the ability to compete in a global
marketplace.
Arguments in Support of CSR -
• Enlightened self-interest: Businesses must take actions to ensure
long-term viability.
• Warding off government regulations. This is one of the most
practical reasons.
• Resources Available: Business has the resources and expertise. Let it
try.
• Pro-action is better than Reaction. Pro-action is also less costly.
• Public supports: the public strongly supports CSR.
CSR Framework

Ethical
Governance

Stakeholder
Engagement
Environmental
Sustainability
Corporate
Transparency
and
Reporting
Social
Supply chain
Management
Community
Engagement Responsibility
Employee
Engagement
 4 Levels of Strategy
in CSR
• CSR initiatives are aligned with the organization's mission and core values.
• Focus on broad themes such as environmental stewardship, social impact,
and ethical business practices.
Enterprise Focuses on how the company can achieve synergies across its various
•
Level business units and maximize overall corporate performance.
• Involve setting overall targets and guidelines, for CSR performance,
allocating resources, and monitoring progress across the organization
Corporate
Level • Involves decisions about product offerings, market positioning, &
competitive advantage.
• Involves integrating social & environmental considerations into product
design and development, supply chain management, and customer
Business Level engagement strategies

• involves decisions made by departments or functional areas within the

organization.
Functional Level • include incorporating sustainability criteria into procurement decisions,
promoting employee volunteer programs, and integrating CSR messaging
into marketing campaigns
Internal and External Strategy
• Corporate Social Responsibility (CSR) involves both internal and external strategies aimed
at integrating social, environmental, and ethical considerations into the core business
operations and interactions with stakeholders.
• Internal Strategies:
 Establishing corporate culture and value ethics,sustainability, and social responsibility by top
management
 Development of clear CSR policies and guidelines, outlining the company's commitments, standards,
and expectations regarding ethical conduct, environmental stewardship, and social impact.
 Engaging employees in CSR initiatives through volunteer programs, sustainability training,
opportunities for involvement in community projects & embedding CSR activities into performance
evaluation and incentive systems.
 Collaborating with supplier, monitoring, and engagement processes to ensure ethical sourcing
practices, fair labor standards, and environmental sustainability throughout the supply chain.
 Implementing strategies to minimize environmental impact, reduce resource consumption, and
promote sustainability across operations.
Internal and External Strategy
• External Strategies:
Engaging with stakeholders, to understand their perspectives, needs, and
expectations regarding CSR.
Providing transparent and accurate information about CSR initiatives, performance,
and impacts through regular reporting and communication channels.
Collaborating with external partners, like non-profits organizations, academia,
government agencies, and other businesses, to leverage resources, expertise, and
networks for addressing social and environmental challenges more effectively.
Engaging in public policies and regulations that promote sustainability, social justice,
and responsible business practices at local, national, and international levels.
Investing in community development projects, philanthropic initiatives, and
charitable giving programs to address social needs and contribute to the well-being
of communities where the company operates.
Collaborative Approach to meet
socially responsible organization
• Collaborative approaches are effective in meeting socially responsible
objectives as they leverage the strengths, resources, and expertise of
multiple stakeholders to address complex social, environmental, and
ethical challenges.
• Multi-Stakeholder Partnerships:
• Forming partnerships that involve a diverse range of stakeholders, including
businesses, governments, NGOs, academia, and local communities, to
address specific social or environmental issues collaboratively.
• These partnerships enable shared decision-making, resource sharing,
knowledge sharing and collective action to achieve common goals.
Collaborative Approach to meet
socially responsible organization
• Cross Sector Collaboration:
• Facilitating collaboration between different sectors, such as the private sector, government, academia,
and civil society, to address systemic issues that require coordinated efforts and multi-sectoral solutions.
• Cross-sector collaboration fosters innovation, enhances coordination, enhances accountability and
transparency, builds trust and social capital, address challenges and root causes, and maximizes impact
by leveraging the complementary strengths of each sector.
• Supply Chain Collaboration:
• Collaborating with suppliers, subcontractors, and other partners throughout the supply chain to
promote ethical sourcing practices, improve labor standards, and enhance environmental sustainability.
• Supply chain collaboration involves transparency, ethical sourcing, fair labor practices, dialogue, and
capacity-building to address social and environmental risks and opportunities across the supply chain.
• Collective Impact Initiatives:
• Participating in collective impact initiatives that bring together multiple stakeholders from different
sectors to address complex social problems systematically.
• These initiatives involve a structured approach to collaboration, including a common agenda, shared
measurement systems, mutually reinforcing activities, continuous communication, and backbone
support organizations
Collaborative Approach to meet
socially responsible organization
• Public Private Partnership:
• Engaging in partnerships between governments and businesses to address social and environmental
challenges through joint initiatives, investment projects, and policy interventions.
• PPPs leverage the respective strengths of the public and private sectors to achieve shared objectives,
such as infrastructure development, public service delivery, or environmental conservation
• Cross Industry Collaboration:
• Collaborating with competitors, industry associations, and other stakeholders within the same
industry to address industry-wide challenges, promote best practices, and drive collective action on
CSR issues.
• Cross-industry collaboration fosters pre-competitive cooperation, knowledge sharing, and industry-
wide transformation
• Social Innovation Networks:
• Participating in networks and platforms dedicated to social innovation, sustainability, and corporate
responsibility to exchange knowledge, share best practices, and collaborate on innovative solutions
to pressing social and environmental issues.
• Social innovation networks provide opportunities for learning, collaboration, and collective problem-
solving across sectors and geographies.
Business Responses to calls for CSR
Make the Business Case for CSR

Defensive approach

Cost-benefit approach

Strategic approach

Innovation and learning approach

© 2018 Cengage 24
The Business Case for CSR
6 Reasons for Embracing CSR 4. Attract, retain, and maintain a
happy workforce and be an
1. Innovation Employer of Choice
2. Cost savings 5. Save money on energy and
3. Brand differentiation operating costs and manage risk
4. Long-term thinking 6. Differentiate oneself from
competitors
5. Customer engagement
7. Improve business reputation and
6. Employee engagement standing
Business Benefits of CSR 8. Provide access to investment and
7. Win new business funding opportunities
8. Increase customer retention 9. Generate positive publicity and
media opportunities due to media
9. Develop and enhance interest in ethical business
relationships with customers, activities.
suppliers, and networks
© 2018 Cengage 25
Corporate Social Responsiveness
Corporate Social Responsiveness -
• An action-oriented variant of CSR.
Responsibility -
• Implies a state or condition of having assumed an obligation.
Responsiveness -
• Connotes a dynamic, action-oriented condition.
Corporate Social Performance:
Carroll’s Model
Creating Shared Value and
Conscious Capitalism
CSV (Creating Shared Value)
• Business and society could be brought back together if business
redefined the basic purpose as creating shared value—generating
economic value in a way that also produces value for society.
Conscious Capitalism
• A more complex form of capitalism that reflect and leverages the
interdependent nature of life and all of the stakeholders in business.
• Higher purpose, Stakeholder orientation, conscious leadership, conscious
culture.
International Government Environmental
Responses
• Global Compact – joins firms across the
world to support environmental and social
principles.
• Global Reporting Initiative (GRI) – a
collaborating center of the UNEP. GRI
developed a sustainability reporting
framework, now the most widely used
standard in the world; outlines principles
and indicators that organizations can use
to measure and report their economic,
environmental and social performance.