What is CSR?
Corporate Social Responsibility
-Where companies integrate social and environmental concerns in their business operations and stakeholder interactions, voluntarily
-Continuous commitment by businesses to behave ethically and contribute to economic development
—- while improving the quality of life of the workforce and society at large
What concerns does CSR incorporate?
Sustainability
ethical corporate behaviour
environmental protection
support for human rights
fair working practices
supply chain management
equality and diversity
community involvement
What examples are there of sustainability reporting?
Sustainability reporting examples:
Economic: Performance, Market presence, Economic Impact, Procurement
Environmental: Materials, energy, transport, emissions, compliance
What does improving CSR do? (self interested)
- More, and loyal, customers,
- Better, and more committed, employees,
- Less intervention from government or regulators
- A better environment for all
What are the three types of stakeholder?
Internal, Connected, External
Define stakeholder
individual/group which AFFECTS or can be AFFECTED by the company’s ACTIONS
What is an internal stakeholder?
Internal: direct relationship, such as employment, ownership, or investment. An individual or group within the organisation which affects or can be affected by, the company’s actions.
E.g. Management, Employees, Executive directors
WITHIN
What is a connected stakeholder?
Connected: Not internal, but have dealings with the company. Indirect involvement
E.g. Customers, shareholders, lenders, suppliers, financiers, NEDs
What is an external stakeholder?
External: do not directly work with a company but are affected somehow by the actions and outcomes of the business.
E.g. Government, Community, Press/Media, Public Authorities, Interest Groups, Trade unions, pressure groups
What are the other categorisations of stakeholder?
Financial stakeholders and interest stakeholders
Financial: have some form of financial share or stake in a company
e.g. Employees, suppliers, customers, lenders, shareholders, government
Interest: have an interest in how the company performs
Competitors, media, pressure groups, local community.
Communication with stakeholders maybe direct – shareholders at AGM or indirect – Newspapers.
What are the 4 ethical stances that a company can take towards CSR
Short-term shareholder interests
Long-term shareholder interests
Multiple Stakeholder obligations
Shaper of Society
Johnson and Scholes
Ethical stance: Short-term shareholder interests
- Concentrate on shareholder wealth and pay tax on profits
- Go no further than law requires
Ethical stance: Long-term shareholder interests
- Consider deeper ethical responsibilities to enhance company’s image
- Reputational benefits of being ethical out-weigh the costs
Ethical stance: Multiple Stakeholder obligations
- Respect expectation of stakeholders other than the shareholders and make this company’s objective
Ethical stance: Shaper of Society
- High moral stance to every stakeholder
- Typically public/NGO
What is Carrols CSR model?
4 part pyramid ‘PELE’ E at bottom, and builds up
* Philanthropic Be a good corporate citizen
* Ethical : Behave ethically
* Legal: Obey the law
* Economic: be profitable
What are the four strategis of adopting PELE in relation to CSR
Proactive, Reactive, Defence, Accomodate
- Proactive – company fully prepared to take full responsibility for actions
o e.g. fault discovered, product recalled even if fault yet to cause problems - Reactive – company takes responsibility once an external entity prompts
o E.g. fault is discovered, not recalled until public or gov find out - Defence – company minimises or attempts to avoid additional obligations arising from a problem
o e.g. if fault discovered after purchase, product can’t be returned - Accommodation – company responds differently each time by taking account of stakeholders view
CSR and Brand management
A company’s CSR policy has a significant effect on the value of its corporate brand
To provide a source of real competitive advantage any CSR initiatives need to be aligned with overall corporate strategy
Define Globalisation
the increasing integration of internationally dispersed economic activity
Define Supply Chain
: the organisations that
participate in the flow of products, services, finances and information
from a source to a customer.
CSR and the supply chain
The key role of the supply chain in CSR is driven by increased globalisation.
As supply chains get globalised, it is increasingly difficult and important to ensure CSR
What must the purchasing organisation do to have a fair and positive impact on it’s supply chain
It must ensure complience with
-(inter)national laws/agreements/codes
Supply chain audits give assurance that business practices in supply chains are in line with the stated CST intentions of the company and the standards to which it subscribes
What principles to reduce environmental impact in supply chains?
The European Commissions Integrated Product Policy (IPP) outlines a strategy for policy makers to help reduce the environmental impact caused by products throughout their lifecycle
What are the 5 key principles of EC’s IPP
- Life cycle thinking:
- Work with the market
- Stakeholder involvement:
- Continuous improvement:
- Policy Instruments:
Luck WOuld May SI CI PI
