Case discussion

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Chapter 3

of Stakeholders, Ethics, Public Policy:

“Corporate social responsibility and citizenship”

Shawn Berman

Anderson School of Management

University of New Mexico

Management 308

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Corporations and countries, revenue vs. GDP

Copyright © McGraw-Hill Education. Permission required for reproduction or display.

Figure 3.1

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Corporate Social Responsibility, 1
The Iron Law of Responsibility

Succinctly, the iron law of responsibility is the idea that those who do not use power in ways that society considers responsible will tend to lose it.

What’s an instance of the iron law of responsibility being applied to corporations?

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• The book defines Corporate Social Responsibility as meaning “that a corporation should… be held accountable for any of its actions that affect people, their communities, and their environment”. (p. 51)
• Corporate Citizenship refers to actions companies take to put their commitments to CSR into practice.

Is this what CSR means to you? Does it mean more or less to you? How should businesses balance their responsibilities to all their stakeholders?

CSR

Corporate Social Responsibility, 2

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• 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 principles—charity and stewardship—have help to shape thinking about CSR.

The history of CSR

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Foundation Principles of Corporate Social Responsibility

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Arguments for CSR

CSR balances corporate power with responsibility

CSR discourages government regulation

CSR promotes long-term profits for business

CSR improves business value and reputation

CSR corrects some of the social problems caused by business

All of these arguments hinge on the concept of “enlightened self-interest”

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Arguments against CSR

CSR lowers economic efficiency and profits

CSR imposes unequal costs among competitors

CSR imposes hidden costs passed on to stakeholders

CSR requires skills businesses lack

CSR places responsibility on business rather than individuals

These arguments tend to focus on the economic function of business

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Achieving balance

Taking social responsibilities seriously means trying to balance all the economic, legal, and social responsibilities of a business. Again the concept of “enlightened self-interest” comes to the fore.

Is following the laws (legal compliance) enough to be considered “socially responsible”?

Two types of businesses tie this balance into the DNA of the company: Companies founded by Social Entrepreneurs and B Corporations.

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Mirvis & Googins, Stages of Corporate Citizenship

Figure 3.5

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Corporate Social Performance Audits

Is a systematic evaluation of an organization’s social, ethical, and environmental performance

Demand for social auditing has grown in Europe and U.S.

In some European countries is required by law

Can take 2 forms

Performance measured against a company’s own mission statement or policies

Performance measured against a set of established standards

Like the Davenport Principles presented earlier, or the global standards presented on the following slides

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CSR at Gravity Payments discussion questions

Is Price demonstrating elements of CSR by his actions in this, or not?

How is Price exhibiting the fourth phase of Corporate Citizenship in his actions at Gravity Payment?

What arguments in support of, or concerns about, CSR are relevant in this case?

Is Price acting like an executive of a firm that could be certified as a B Corporation

At what stage of global corporate citizenship is Gravity Payments operating? Why?