Corporate social responsibility 1

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.

2
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).

3
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
  ways.)

4
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
  CSR.

5
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.

6
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.)

7
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.

8
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.

9
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.

10
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.

11
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).