CORPORATE SOCIAL RESPONSIBILITY EXAM 2 1 1 Corporate Social Responsibility 10 2 A Quick language check CSR social vs Sustainability environment Responsibility ability or authority to act or decide on ones own without supervision i Four part definition CSR encompasses the economic legal ethical and discretionary philanthropic expectations that society has of organizations at a given point in time Economic responsibilities objective to produce goods and services that society wants and to sell them at a fair price Legal responsibilities laws under which businesses are expected to operate reflect society s view of codified ethics in a sense that they articulate basic notions of fair practices as established by law makers Ethical responsibilities embody the full scope of norms standards values and expectations that reflect what consumers employees shareholders and the community regard as fair just and consistent with respect for or protection of stakeholder s moral rights Philanthropic responsibilities fulfilling the public s expectation that the company will give back to societ B Business and Stakeholders Chart Figure 3 6 pg 76 i Community Public Environmental groups ii Government Local Federal State iii Employees Union Minority Activists Women Older iv Consumers Consumer activists Product Liability v Owners Private Corporate Institution C Three things stakeholders want to know i Can you manage money ii Can you manage people iii What have you done under social responsibility D Hurricane Katrina Case Study i The business community saved New Orleans not the Government Wal Mart sent 50 trucks of necessities two weeks before the Government got there Helped people operations and community CASE PG 569 IN BOOK Walmart s social awareness compaigns Buy American Walmart began to only buy domestically in order to restore over 4500 jobs to the American economy and people Environmental Awareness commitment to preserve the quality of America s land water and air Shifted to recycled paper recycling bins in parking lots community clean up etc Main goals be 100 supplied by renewable energy create zero waste and sell products that sustain people and the environment E Wal Mart Case Study i Pros disaster center fast response cheap many customers community help located everywhere job opportunities large product selection distribution networking diverse workforce sustainability drives largest company saved gulf ii Cons Buy American then Buy Chinese from green to pavement Mexico bribery scandal legal issues workforce issues consumerism mom and pop shops decline suppliers use sweatshops unclean long lines low wages bad employer relations iii Video Tracy Morgan and Wal Mart 2014 Wal Mart has 5 000 lawsuits a day F What makes you a good citizen i Law abiding volunteering honest respectful productive giving to charity Environmental pay taxes voting 2 Business Impact 10 7 A Question Corporate Citizenship encompasses all but what i Responsibility ii Performance iii Responsiveness iv Problem solving B Big Six Reasons Companies are Heavily Invested Figure 2 6 pg 42 Big Six Reasons Innovation Cost savings Brand differentiation Long term thinking Core Benefits Win new business Save money on energy and operating costs and manage risk Differentiation from competitors improve reputation Provide access to investment and funding opportunities generate positive publicity and media opportunities due to media interest and ethical activities Customer engagement Develop and enhance relationships increase customer retention Employee engagement Attract retain and maintain a happy workforce C How firms Respond to CSR Pressure i Defensive CORPORATE SOCIAL RESPONSIBILITY EXAM 2 3 Garments ii Cost Benefit Dupont iii Innovation Tesla iv Strategic Siemens D Video CSR and IBM Watch 6 minutes i CSR was a compliance issue now a business issue E Hersey Foods Website Social Responsibility 2013 CSR Report Executive Summary READ F History of CSR i Economics 1700s Adam Smith economics thinker moral philosopher Invisible Hand concept society can best determine its needs and wants through the marketplace The invisible hand of the market transforms self interest into societal interest ii Legal 1800s iii Social 185 iv Stakeholder 1950 G Iron Law of Responsibility In the long run those who do not use power in a manner which society considers responsible will tend to lose it 3 Employee Stakeholders 10 9 A Social Contract contract between employer and employee social relationship i Social Progression and Employees personnel human resources human capital Three kinds of human capital financial building machine etc human ii Video Clip Apple and Social Contract iFactory and Foxconn huge company in China electronics contract manufacturer Suicide nets issue 2 hr 60 hrs a week Watch video B United States Employer Employee Social Contract Figure 17 1 pg 491 i Past old Stable job security Lifetime one employer Stable assignments Loyalty to employer Employer responsibility Individual work focus ii Present new Declining job security Norm job changes Temporary assignments Loyalty to career Personal responsibility Team project focus iii Loyalty to career does NOT mean disloyalty C Moral Management and Employee Stakeholders i Moral employees are a human resource treat with dignity Video Clip Alta Gracia town in Dominican Republic a Knights Apparel Brand CEO Joe Bozich b Korean manufacturer in Alta Cracia c Living wage model workers earn the money they need to raise a family food and nutrition for family housing healthcare education d Takes corporate social responsibility into play and moral treatment of workers Firestone Example Liberia Ebola a Went in and brought all 80 000 workers onto plantation protected 88 000 people from Ebola ii Amoral iii Immoral Treat employees as the law requires Employees factors of production Exploit for personal gain Video Clip Child Labor 2016 UN Goals a Worst forms of child labor b 166 million under 17 c 250 million children impacted 2006 d 200 million still impacted in 2014 D Investment Banking Employee Social Contract i First Year Analyst Age 22 85 110 hours a week 80k 50k bonus ii Second Year Associates Age 28 55 105 hours a week 100k 150k yearly pay bonus 4 Do Employees have rights A Civil minority women disabled older religious affiliation employee privacy smokers non smokers children animal due process appearance Unions private sector 6 7 vs Public sector 35 B Legal i Statutory discrimination ii Collective unions iii