-Mixture of ethical practice, public image and the responsibility of corporate to society.
What are the core characteristics of CSR?
-Responsibility of firm
-CSR also has characteristics of unwritten rules which means a moral code firms should adhere to.
Why is CSR imperative?
-Rules about safety e.g it is important to manufacture safe products.
Does CSR affect you and me, and business?
Does CSR include :
Providing goods that are safe: It is imperative, there is a legislation and rules to ensure there are safe goods. But is this CSR? Possibly CSR takes the legislation and then makes it more transparent. Are companies required to highlight the amount of sugar in their product? It is a legal requirement, not CSR.
Providing correct information about their g&s: it is necessary to advertise the amount of sugar in fruit juice.
Providing accurate, transparent, and financial reporting: How much information are they required to produce for their financial?
Investment on employer’s health and safety: Should they think about the future as well?
Not discriminating against women and ethnic minorities: It is a legal requirement.
Think about green technology.
Charitable donations, investment in local community projects (particularly in developing countries), investment in environmental protection, accurate transparent and exhaustive reporting on environmental impacts, paying the market rate in developing countries…
What is CSR?
There is no strong consensus on a definition of CSR.
-‘The social responsibility of a business is to increase profits’ Friedman
-‘The social responsibility of a business encompasses the economic, legal, ethical, discretionary expectations that society has of an organization’ Carroll
Since society is important to us and the behavior of a firm has an impact on society, CSR is important to us.
Organisational definitions of CSR:
European commission- companies integrate social and environmental concerns in their business operation with institutions and in their stakeholders on a voluntary basis. EC does not think that CSR is necessary, they believe it is on a voluntary basis.
UK govt- the voluntary actions that business takes, over and above the compliance with minimum legal requirement, to address both its own competitive interest and the interest of wider society.
Firms also use CSR as a marketing ploy. If Vodafone invests heavily on CSR activities, O2 should remain competitive.
Does this also include the financial implication the firm has on society? (Financial transparency) "Financial transparency" means being honest about your performance, even when it is subpar. According to the SEC, means "timely, meaningful and reliable disclosures about a company's performance.
…. Refer to notes
There are different views of CSR for different firms. So, it is significant that Company A highlights their own values and ethics as they might not incorporate the general view of CSR.
The values that one company has might not reflect the values of other companies.
Core characteristics of CSR
Voluntary- the views of the EC and UK govt- critics of CSR see voluntarism as a way company avoid or delay govt regulation in the industry
Internalizing externalities- self regulation e.g investment in clean tech to prevent pollution, assessment of impact of firm’s relocation on the local community. Public opinion plays a role. Building PR.
Multiple stakeholder orientation
Alignment of social/environmental and economic activities- social performance of the firm should not conflict with financial performance as firms can benefit financially from being socially/environmentally responsible.
Beyond philanthropy- it is about how a firm’s core business functions impact on society, it is important how a firm uses its resources to impact on society.
Practices and values
Strategic approach- Companies should align their CSR strategies with their knowledge. It is important for a firm to develop a CSR strategy which is