Ethics and the Conduct of Business Eighth edition Chapter 12 Corporate Social Responsibility Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Modules • Introduction: Corporate Social Responsibility • 12.1: The CSR Debate • 12.2: Normative Case for CSR • 12.3: Business Case for CSR • 12.4: Implementing CSR • 12.5: Business with a Mission • 12.6: Case Studies Conclusion: Corporate Social Responsibility Copyright â 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Learning Objectives (1 of 2) • • • 12.1: Recognize the significance and implications of corporate social responsibility for businesses, how CSR is commonly demonstrated, and its related concepts 12.2: Describe the dominant moral arguments against the concept of CSR and the counterarguments and justifications for CSR as a requirement of companies 12.3: Analyze the arguments that a market for virtue makes CSR a profitable strategy and a source of competitive advantage Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Learning Objectives (2 of 2) • • • 12.4: Summarize the important aspects of successful CSR programs, the difficulties with measuring the social performance of companies, and various attempts at measurement 12.5: Compare how nonprofit and for-profit social enterprises operate and can compete successfully in the marketplace 12.6: Compare how nonprofit and for-profit social enterprises operate and can compete successfully in the marketplace Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Introduction: Corporate Social Responsibility • Basis for social responsibility • Requirements to implement CSR programs • Benefits of CSR programs Social enterprises Copyright â 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.1: The CSR Debate (1 of 2) Objective: Recognize the significance and implications of corporate social responsibility for businesses, how CSR is commonly demonstrated, and its related concepts • 12.1.1: Meaning of CSR – Concept of CSR Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Figure 12.1 Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.1: The CSR Debate (2 of 2) Objective: Recognize the significance and implications of corporate social responsibility for businesses, how CSR is commonly demonstrated, and its related concepts • 12.1.2: Examples of CSR – General agreements • 12.1.3: Related Concepts – Corporate social responsiveness – Elements of corporate social performance – Corporate citizens Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.2: Normative Case for CSR Objective: Describe the dominant moral arguments against the concept of CSR and the counterarguments and justifications for CSR as a requirement of companies • 12.2.1: Classical View – Expression of classical view • 12.2.2: Friedman on CSR – Fiduciary argument – Taxation argument Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.3: Business Case for CSR (1 of 2) Objective: Analyze the arguments that a market for virtue makes CSR a profitable strategy and a source of competitive advantage • 12.3.1: The Market for Virtue – Factors that induce managers to take on CSR activities – Power of virtue Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Table 12.2: A Watch List of Industries and Companies Industries Issue(s) Companies Consumer goods: shoes, apparel, and household products Goods are manufactured in contract factories overseas Nike, Gap, Walmart Petroleum, timber, and mining Environment issues Shell, Home Depot, Rio Tinto Food and beverage Raw materials are sourced from lessdeveloped countries Starbucks, Nestlé, Coca-Cola Tobacco and fast foods Tobacco-related deaths and obesity Altria (Philip Morris), Kraft, McDonald’s Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.3: Business Case for CSR (2 of 2) Objective: Analyze the arguments that a market for virtue makes CSR a profitable strategy and a source of competitive advantage • 12.3.2: Competitive Advantage – Strategic CSR Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.4: Implementing CSR Objective: Summarize the important aspects of successful CSR programs, the difficulties with measuring the social performance of companies, and various attempts at measurement • 12.4.1: Program Selection and Design – Guidelines • 12.4.2: Reporting and Accountability – Social reporting Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.5: Business with a Mission Objective: Compare how nonprofit and for-profit social enterprises operate and can compete successfully in the marketplace • 12.5.1: Social Enterprise – Definition – Forms • 12.5.2: Competing Successfully – Overview • 12.5.3: Mission and Trust – For-profit organization Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Table 12.3: Nonprofit versus For-Profit Social Enterprises Categories Nonprofit SE For-Profit SE Definition A nonprofit whose main source of revenue is earned income, not donations A business created for a social purpose, that operates in a socially-beneficial manner AKA Enterprising nonprofits, commercial nonprofits Possible forms: • subsidiary of a hybrid nonprofit • benefit corporation (community interest company) • Certified B Corporation Example(s) Benetech (technology to aid global literacy) Patagonia (environmentally-sustainable clothing) Toms Shoes (donates shoes to the needy) Available funding Sales, donations, loans Sales, equity capital, impact investment Advantages Tax benefits Income from donations People have more confidence in nonprofit causes Equity capital allows faster growth, more effective use of resources Ability to make a profit Challenges Need for innovation Pressure to use donations for given purposes Limits on spending Sales, equity capital, impact investment Need for innovation Pressure to give some control to outside investors Difficulty keeping focus on social mission over profit Loss of public trust Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.6: Case Studies (1 of 2) Objective: Compare how nonprofit and for-profit social enterprises operate and can compete successfully in the marketplace • 12.6.1: Case: Starbucks and Fair Trade Coffee – – – – Mission Issue Fair trade coffee Starbucks response Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Table 12.4: Requirements for Fair Trade Certification Condition Description Fair prices Democratically organized farmer groups receive a guaranteed minimum floor price and an additional premium for certified organic products Farmer organizations are also eligible for pre-harvest credit Fair labor conditions Workers on Fair Trade farms enjoy freedom of association, safe working conditions, and living wages Forced child labor is strictly prohibited Direct trade Importers purchase from Fair Trade producer groups as directly as possible, eliminating unnecessary middlemen and empowering farmers to develop the business capacity necessary to compete in the global marketplace Democratic and transparent organizations Fair Trade farmers and farmworkers decide democratically how to invest Fair Trade revenues Community development Fair Trade farmers and farmworkers invest Fair Trade premiums in social and business development projects such as scholarship programs, quality-improvement training, and organic certification Environmental sustainability Harmful agrochemicals and GMOs are strictly prohibited in favor of environmentally sustainable farming methods that protect farmers’ health and preserve valuable ecosystems for future generations Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 12.6: Case Studies (2 of 2) Objective: Compare how nonprofit and for-profit social enterprises operate and can compete successfully in the marketplace • 12.6.2: Case: Timberland and Community Service – – – – Commerce and justice City Year nonprofit organization Community service program Change in economic situation • 12.6.3: Case: Coca-Cola’s Water Use in India – Groundwater depletion case Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Conclusion: Corporate Social Responsibility • Meaning of CSR • Arguments for CSR • Normative case for CSR Virtual industry Strategic CSR Copyright â 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved ... demonstrated, and its related concepts 12. 2: Describe the dominant moral arguments against the concept of CSR and the counterarguments and justifications for CSR as a requirement of companies 12. 3: Analyze... Compare how nonprofit and for-profit social enterprises operate and can compete successfully in the marketplace 12. 6: Compare how nonprofit and for-profit social enterprises operate and can compete... Objectives (2 of 2) • • • 12. 4: Summarize the important aspects of successful CSR programs, the difficulties with measuring the social performance of companies, and various attempts at measurement 12. 5: