Mgt 419 – Lecture Notes 9/5
MGT 419: Lecture Notes 9/5Chapter 2:Corporate Social Responsibility (CSR)CSR- Managers need to consider the impact of the company’s actions on society.Corporate CitizenshipSustainability Conscious Capitalism Creating Social Value CSR TimelineEconomic Model – organizations need to be financially viable to survive. Sometimes engaged in: philanthropy, community obligations and paternalism. Legal Model – organizations need to follow the rules.  Social Model – organizations need to consider in general when making decisions. Stakeholder Model – organizations need to consider its impact upon individual stakeholders when making business decisions. CSR TerminologyCorporate Social Responsibility -Emphasizes obligation and accountability Corporate Social Responsiveness -Emphasizes action and activity Corporate Social Performance -Emphasizes outcomes and results “New” Concepts Corporate Citizenship (CC) – Views companies as citizens and all this impliesCorporate Responsibility (CR) – Broadly focuses on all categories of corporate responsibilities Sustainability (Sus) – Emphasizes longer – term concern for people, planet and profitsCreating Shared Value (CSV) – Focuses upon how companies generate economic value in a way that produces value for society
Conscious Capitalism – “Mindful” business practices – higher purpose, stakeholders, conscious, leaders and conscious cultureFour Part Def. of CSREconomic Expectations (Required) – Organizations effectively and efficiently produce what society needs at a fair price (drugs & dog food)Legal Responsibilities (Required) – Obey rules and regulations (gray areas – taxes; quid pro quos)Ethical Responsibilities (Expected) – Legal responsibilities deal with what organizations need to do; ethical issues are what organizations are supposed to do. (Apple and $246 billion in overseas accounts)Philanthropic Responsibilities (Desired/expected) – Voluntary or discretionary actions that reflect current expectations of organizations by the public (Hurricane Harvey response)[pic 1]Philanthropic    Legal MGT 419 – 9/12/2017CSR Exemplar FirmsSocial Entrepreneurship Social Intrapreneurship Mainstream AdoptersArguments against CSRClassical economicsBusiness not equippedDilutes business purposeBusinesses have too much power alreadyArguments for CSREnlightened self-interestWarding off government regulations Better resources available Proaction better than reaction Public support Business Case for CSRDefensive Approach Cost- benefit approach Strategic approach Innovation and learning approach Chapter 3 – Stakeholders View of the Firm “Production” View Focused on who supplied raw materials and who bought outputs Managerial view of the firm Included owners and employees “Stakeholder” view of the firm Types of StakesIncluded all segments affected by the firm (i.e. social, economic, political)An interestIf an organization does something, does it affect me directly or indirectly?A right If an organization does something that affects my ability to pursue “life, liberty, or the pursuit of happiness?” (Houston zoning regulations; fossil fuel plant emissions). Ownership Do I hold a share of the organization? (Direct ownership/mutual fund ownership). Types of StakeholdersPrimary Social Stakeholders