MGT 305 1st Edition Lecture 3 Outline of Last Lecture I What is diversity why is it important II The three cases for diversity Outline of Current Lecture I What is Corporate Social Responsibility a Social obligation b Social responsiveness c Social responsibility II The Triple Bottom Line III Why corporations fail to do the right thing IV Stages of Moral Development Current Lecture Chapter 5 Managing Social Responsibility and Ethics What is Corporate Social Responsibility CSR Social obligation the obligation of a business to meet it s economic and legal responsibilities o Example obligation to maximize profits Social responsiveness when a company engages in social actions in response to some popular social need o Example market oriented decisions guided by social norms or values like Ford s decision to endorse the federal ban on texting and driving Social responsibility a business s intention beyond its legal and economic obligations to do the right things and act in ways that are good for society o Example choosing an environmentally friendly option even if it costs more providing free childcare for employees Stakeholders can be investors employees community anyone who is impacted by company actions Triple bottom line people planet profit An approach that supports sustainability over simply making a profit CSR predicts Reputation and customer loyalty o Leads to ability to attract top talent investors consumers Financial performance o Small financial advantage will not hurt Positive employee attitudes productivity and retention o May lessen times of low productivity due to low no employees Why do corporations fail to do the right thing People lie o Safety violations often not reported People don t talk to each other o Departments don t talk to each other Safety and responsibility cost money o Up front costs Few people bear witness o If higher ups don t see something they are unlikely to fix it No one know what corporate social responsibility is o No universal standard Consumers won t pay more Ethics Stages of Moral Development People progress through stages of ethical development 1 Preconventional Judge an action by it s direct consequences self interest driven 2 Conventional Judge an action by society s view and expectations 3 Postconventional principled Morality is guided by principles of right and wrong that are independent of societal expectations Imagining what the other person would think is right wrong given what they know