assignment 8
maemk
Topic8_CSR.pdf
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Dr Udo C Braendle
Topic 8: Corporate Social Responsibility – CSR
An Introduction to CSR (Reporting)
Reference:
Braendle,
CSR- More than
Corporate
Storytelling?
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Dr Udo C Braendle
Introduction
Did you ever expect a corporation to have a conscience, when it has no
soul to be damned, and no body to be kicked?
Edward, First Baron Thurlow 1731-1806
Lord Chancellor during King George III’s reign.
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Dr Udo C Braendle
Introduction (Continued)
▪ Craig Carter, Rahul Kale and Curtis Grimm define corporate social
responsibility as follows
– “[Corporate] social responsibility deals with the managerial consideration
of non-market forces or social aspects of corporate activity outside of a
market or regulatory framework and includes consideration of issues such
as employee welfare, community programs, charitable donations, and
environmental protection.”
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Dr Udo C Braendle
Corporate Power and Responsibility
Corporate Power: Capability of corporations to influence government, the economy, and society, based on their organizational resources.
The tremendous power of the world's leading corporations has both positive and negative effects.
Positive
• More resources.
• Lower cost production.
• New products.
• Technologies.
Negative
• Disproportionate political system.
• Dominant public course.
• Divide markets.
• Squash competition.
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Dr Udo C Braendle
Comparison of Annual Sales Revenue and the GDP
for Select Multinational Enterprises and Nations in $
Billions
Access the text alternative for these images.
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Dr Udo C Braendle
Corporate Power and Responsibility1
Iron law of responsibility says in the long run, those who do not use power in ways that society considers responsible will tend to lose it.
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Dr Udo C Braendle
The Meaning of
Corporate Social Responsibility
Act in a way that enhances society and its inhabitants and be held accountable.
Acknowledge any harm to people and society and correct it if possible.
May forgo some profits if its social impacts hurt its stakeholders or if its funds is usable for a positive social impact.
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Dr Udo C Braendle
The Origins of
Corporate Social Responsibility
• In the United States, the idea of corporate social responsibility appeared around the start of the 20th century.
• Corporations under attack for being too big, too powerful, and guilty of antisocial and anticompetitive practices.
• To use their power and influence voluntarily for broad social purposes rather than for profits alone.
→ Example: Steelmaker Andrew Carnegie, Henry Ford.
→ Example: “new” philanthropists—Mark Zuckerberg, Priscilla Chen.
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Dr Udo C Braendle
Phases of Corporate Social Responsibility
• Frederick provides expanded framework for understanding the evolution of the CSR concept.
• Divided into 4 phases:
Corporate
Social
stewardship
(1950s-
1960s)
Corporate
social
responsiven
ess (1960s–
1970s)
Corporate/
business
ethics (1980s
– 1990s)
Corporate/
global
citizenship
(1990s –
2000s)
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Dr Udo C Braendle
Evolving Phases of Corporate Social
Responsibility
Access the text alternative for these images.
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Dr Udo C Braendle
Characteristics of Sustainability – Triple Bottom Line
•Environmental
•Economic
•Social
Responsibilities of a Business Firm
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Dr Udo C Braendle
An Expanding CSR Agenda
– Eco-efficiency & environmental protection
– Occupational health and safety
– Child labour
– Community assistance (“corporate social investment” – health and education);
– CSR in the supply chain
– Ethical investment
– Labour rights
– Human rights
– Ethical & Fair trade
– Poverty reduction
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Dr Udo C Braendle
▪ Carroll’s four-part definition – Responsibilities of a Business Firm
– “The social responsibility of business encompasses the economic, legal,
ethical and philanthropic [discretionary] expectations placed on
organizations by society at a given point in time”.
Responsibility Societal
Expectation
Examples
Economic Required Be profitable.
Maximize sales,
minimize costs, etc.
Legal Required Obey laws and
regulations.
Ethical Expected Do what is right, fair
and just.
Discretionary
(Philanthropic)
Desired/
Expected
Be a good corporate
citizen.
Responsibilities of a Business Firm
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Dr Udo C Braendle
Enlightened Self-Interest
Economic and social goals come together in companies that practice enlightened self-interest.
The company’s self-interest in the long term to provide:
• True value to its customers.
• Help for its employees to grow and behave responsibility.
→ Example: Nestlé.
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Dr Udo C Braendle
The Corporate Social Responsibility
Question
In Support for Corporate Social
Responsibility
Concerns about Corporate Social
Responsibility
• Balances corporate power with
responsibility.
• Discourages government
regulation.
• Promotes long-term profits for
business.
• Improves stakeholder
relationships.
• Enhances business reputation.
• Lowers economic efficiency and
profit.
• Imposes unequal costs among
competitors.
• Imposes hidden costs passed on
to
• stakeholders.
• Requires skills business may lack.
• Places responsibility on business
rather than individuals.
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Dr Udo C Braendle
Advantages of CSR
Public Image May help in
growth Attracts better
human resources
Fulfills public expectations of
business
Provides better environment for
business
Helps in avoiding government regulation
Maintains balance of
responsibility with power
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Dr Udo C Braendle
Limitations of CSR
What about profit
maximization?
Lack of social skills
Business has enough power
Social overhead cost
Lack of accountability
Lack of board support
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Dr Udo C Braendle
Balancing Multiple Responsibilities
Multiple responsibilities of business include:
• Economic responsibilities.
• Social responsibilities.
• Legal responsibilities.
Challenge is to balance all three.
Successful firm is one which finds ways to meet each of its critical responsibilities and develops strategies to enable the obligations to help each other.
Economic
responsibilities
Legal
Responsibiliti
es
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Dr Udo C Braendle
Business Reputation
Reputation refers to desirable or undesirable qualities associated with an organization or its actors that may influence the organization’s relationships with its stakeholders.
The Reputation Index measures a company’s social reputation.
• It evaluates critical intangible assets that constitute corporate
reputation.
• Rating Research, a British firm, distributes the index and
ratings to interested parties.
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Dr Udo C Braendle
Sustainability Reporting – Global
Reporting Initiative (GRI)
▪ http://www.globalreporting.org
▪ Goal
– to produce a report that “reflect[s] the organization’s
economic, environmental and social impacts” and should
include all material information
• materiality is defined as information that could “substantively
influence the assessments and decisions of stakeholders”
▪ UNEP sponsored but independent
▪ Facilitate comparisons – over time
– across organizations
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Dr Udo C Braendle
Social Reporting
• When a company decides to publicize information collected in a social audit.
• Transparency: When companies clearly and openly report their performance—financial, social, and environmental.
→ Examples: Australia.
New Zealand.
• An emerging trend in corporate reporting is the integration of legally required financial information with social and environmental information into a single integrated report.
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Dr Udo C Braendle
Trends in Corporate Social Reporting • By 2017, a majority of the largest companies included
information of corporate social responsibility in their annual financial reports.
• This reflected a dramatic rise in integrated reporting, from 8 percent in 2008 and 51 percent in 2013 to 78 percent by 2017.
• Ethical drivers replaced economic considerations (80 percent versus 50 percent) as the primary motivator for publishing reports over the past decade.
• Stakeholder engagement increased from about 33 percent to nearly 66 percent, with financial analysts and investors now getting involved.
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Dr Udo C Braendle
To conclude: CSR survey with European
Business Students
▪ Project title: “Strengthening a culture of Corporate Social Responsibility in
European Universities”
– Cooperation of Austrian ICEP, Italian NGDO, sponsored by the European
Commission
▪ Objective: Raise awareness in students
▪ Questionnaires with 14 closed questions to determine the status quo of the
perception of CSR within the student community
– 942 questionnaires were returned after 25 presentations
▪ Question 1: Are you aware of CG/CSR
– 50% awareness in 2005
– ? in 2019
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Dr Udo C Braendle
CSR survey – Q&A
Question 2: What is CSR in
your opinion?
Question 2: What is CSR?
11%
27%
51%
9%
2%
0%
A Marketing tool
A management
strategy
Value approach
New trend
Hot air
No answer
Source: Braendle/Gruber
