CORPORATE SOCIAL RESPONSIBILITY

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CORPORATE SOCIAL RESPONSIBILITY

• Chapter-5
• TY BBA SEM-5

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Ackermans Model

• Robert Ackerman was among the theorists who
  emphasized on the Micro level analysis, tried to
  show that how individual companies can be more
  socially responsible. He described three phases
  through which companies commonly tend to pass in
  developing a response to social issues.

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Organisational level Phase I Phase II Phase III
Chief Executive Issue Corporate Obligation Action Write and Communicate Policy Outcome Enriched purpose, increased awareness
Staff Specialists Issue Technical Problem Action Design Data System and Interpret environment Outcome Technical and Informational groundwork
Division Management Issue Management Problem Action Commit Resources and Modify Procedures Outcome Increased Responsiveness
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• Phase I Chief Executive will identify the social
  problem.
• Phase II Company hires the staff to study the
  problem and suggest the solution.
• Phase III Division managers implement the
  solution.
• Where the enlightened companies can make best
  information available. Being responsive may well
  be the only responsible course of action.

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Carrolls Four-Part Model

• This Model suggests
• Firm must produce the goods and/or services that
  society wants and must sell them at a profit.
• Legal responsibilities are also basic. Firms
  should operate within the law.

Economic Responsibilities
Legal Responsibility
Ethical Responsibility
Discretionary Responsibility
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Contd

• Ethical responsibility refers to behavior by the
  firm that is expected by society but not codified
  into law. These responsibilities are not well
  defined, where in specific situations they are
  clear.
• Discretionary responsibilities encompass
  voluntary activities undertaken for the public
  good. It refers to the voluntary contribution of
  the business to the social cause like involvement
  in community development or other social
  programmes.

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RESPONSIBILITY TOWARDS DIFFERENT SECTIONS

• -- shareholders
• -- employees
• -- consumers
• -- community

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Responsibility to Shareholders

• To protect the interests of the shareholders and
  employees and safeguard the capital of the
  shareholders.
• To provide dividend, the company should earn
  sufficient profit.
• To innovate and growth the company should
  consolidate and improve its position and help
  strengthen the share prices.
• To improve and maintain the image of the company,
  such that the shareholders should feel proud of
  their company.

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Responsibility to Employees

• The payment of fair wages and appropriate
  salaries.
• The provision of labor welfare facilities to the
  extent possible and desirable.
• Arrangements for proper training and education of
  the workers.
• Proper recognition, appreciation and
  encouragement of special skills and capabilities
  of the workers.

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Responsibility to Consumers

• To improve the efficiency of the functioning of
  the business so as to (a) increase productivity
  and reduce prices, (b) improve quality, and (c)
  smoothen the distribution system to make goods
  easily available.
• To do research and development, to improve
  quality and introduce better and new products at
  reasonable prices.
• To take appropriate steps to improve the
  imperfections in the distribution system,
  including black-marketing or profiteering by
  middlemen or anti-social elements.

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Contd

• To Provide the required after sales services.
• To provide sufficient information about the
  products, including their adverse effects, risks,
  and care to be taken while using the products.
• To avoid misleading the customers by improper
  advertisements or otherwise.
• To provide an opportunity for being heard and to
  redress genuine grievances.
• To understand customer needs and to take
  necessary measures to satisfy these needs.

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Responsibility to Community

• Taking appropriate steps to prevent environmental
  pollution and to preserve the ecological balance.
• Rehabilitating the population displaced by the
  operation of the business, if any.
• Development of backward areas.
• Promotion of ancillarisation and small-scale
  industries.
• Contributing to the national effort to build up a
  better society.

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Arguments for Social Responsibility

• Changed Public Expectations of Business.
• Better Environment for Business.
• Public Image.
• Avoidance of Government Regulations.
• Balance of Responsibility with Power.
• Business has the Resources.
• Prevention is Better than Cure.
• Moral Responsibility.
• Citizenship Arguments.
• Duty of Gratitude.

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Arguments against Social Responsibility

• Profit Maximization.
• Society has to pay the Cost.
• Lack of Social Skills.
• Business has enough Power.
• Social overhead Cost.