BUSINESS

ETHICS

I N S T RU C TO R : M S C . B U I T H I T H U Y L I N H
L I N H B T T. V I A M R U @ G M A I L . C O M - 0 9 6 9 2 1 0 3 9 0
C O R P O R AT E
SOCIAL
RESPONSIBILITY
JUNE 2018
TOPICS

• Basics of Corporate Social Responsibility

• Models of CSR
• CSR Strategy
• CSR Practices
B A SI CS O F
CO R P O R AT E
SO CI A L
RES P O NS I B I L I T Y
SOCIAL RESPONSIBILITY
Social responsibility is an organization’s obligation to
maximize its positive impact on stakeholders and to
minimize its negative impacts.
RESPONSIBILITY TOWARDS SOCIETY

• Carrying on business with moral & ethical standards

• Prevention of environmental pollution
• Minimizing ecological imbalance
• Contributing towards the development of social health, education
• Making use of appropriate technology
• Overall development of locality
RESPONSIBILITY TOWARDS
GOVERNMENT

• Obey rules & regulations.

• Regular payment of taxes.
• Cooperating with the Govt to promote social values.
• Not to take advantage of loopholes in business laws.
• Cooperating with the Govt for economic growth & development.
RESPONSIBILITY TOWARDS
SHAREHOLDERS

• To ensure a reasonable rate of return over time.

• To work for the survival & the growth of the concern.
• To build reputation & goodwill of the company.
• To remain transparent & accountable.
RESPONSIBILITY TOWARDS EMPLOYEE

• To provide a healthy working environment.

• To grant regular & fair wages.
• To provide welfare services.
• To provide training & promotion facilities.
• To provide reasonable working standard & norms.
• To provide efficient mechanism to redress worker’s grievances.
• Proper recognition of efficiency & hard work.
RESPONSIBILITY TOWARDS CONSUMERS

• Supplying socially harmless products.

• Supplying the quality, standards, as promised.
• Adopt fair pricing.
• Provide after sales services.
• Resisting black-marketing & profiteering.
• Maintaining consumer’s grievances cell.
• Fair competition.
CSR DEFINITION
The World Business Council for Sustainable Development in
its publication Making Good Business Sense by Lord Holme
and Richard Watts, introduced the following definition:

“Corporate Social Responsibility is the continuing commitment by

business behave ethically and contribute to economic
development while improving the quality of life of the workforce
and their families as well as the local community and society at
large”.
CSR DEFINITION

“CSR is the commitment of businesses to contribute to sustainable economic

development working with employees, their families, the local community and
society at large to improve their quality of life in ways that are both for
business and good for international development.”
World Bank, 2004

CSR Business ethics

Tangible corporate Values driving business
practices decisions
DRIVING FORCES BEHIND CSR
• Globalization
• Power & influences of business corporations
• Growing access to education and information
• Growing awareness of environmental issues
• Spread of corporate scandals and public distrust
IMPORTANCE OF CSR
BENEFITS OF CSR
• Increased employee loyalty and retention
• Increased quality of products and services
• Increased customer loyalty
• Increased reputation and brand image
• Greater productivity and quality
• Reduced regulatory oversight
• Access to capital and market
• Product safety and decreased liability
• Less volatile stock value.
BUSINESS IMPACTS OF CSR
• Shareholder value (changes in stock price and dividend)
• Revenue (changes in revenues due to change in market share and new
markets)
• Operational efficiency
• Access to debt and equity capital
• Customer attraction and retention
• Creation of brand value and reputation
• Human capital
• Risk management
• Innovation
• License to operate
CORPORATE RESPONSIBILITY STANDARDS
ISSUES STANDARDS
Environment Kyoto protocol
ISO 14000 environmental management series
Labor Fair labor association workplace code of conduct
Corporate OECD principles of corporate governance
Governance Principles of Corporate governance in
commonwealth
Money Laundering Basel committee on banking supervision
Wolfsburg anti-money laundering principles
Bribery and OECD convention combating bribery of foreign
Corruption public officials in international business transactions
Human Rights Amnesty international Human right principles
Corporate Global reporting initiative guidelines on social,
Reporting economic and environment reporting.
ISO 36000 Corporate responsibility standards
CSR MODELS
1. FRIEDMAN MODEL
2. ACKERMAN MODEL
3 . C A R R O L L’ S P Y R A M I D M O D E L
4 . E N V I R O N M E N TA L I N T E G R I T Y &
COMMUNITY MODEL.
5 . C O R P O R AT E CITIZENSHIP MODEL.
6 . S T O C K H O L D E R S & S TA K E H O L D E R S M O D E L .
7. NEW MODEL OF CSR
FRIEDMAN MODEL (1962-73)

• A businessmen should perform his duty well, he is performing a social

as well as a moral duty.
• A businessmen has no other social responsibility to perform except to
serve his shareholders & stockholders.
ACKERMAN MODEL (1976)
• The model has emphasized on the internal policy goals & their
relation to the CSR.
• Four stages involved in CSR.
– Managers of the company get to know the most common social
problem & then express a willingness to take a particular project
which will solve some social problems.
– Intensive study of the problem by hiring experts & getting their
suggestions to make it operational.
– Managers take up the project actively & work hard.
– Evaluating of the project by addressing the issues.
ACKERMAN MODEL (1976)

• Six Strategies in the adoption of CSR.

– Rejection strategy
– Adversary strategy
– Resistance strategy
– Compliance strategy
– Accommodation strategy
– Proactive strategy
CARROLL'S PYRAMID OF CSR
CARROLL'S PYRAMID OF CSR:
ECONOMIC RESPONSIBILITY
Enterprises are obliged to bring maximum and fair benefits:
• For consumers:
– Quality products and services; Product safety; Price; Product
information...

• For employees:
– Opportunity to work and develop yourself; Remuneration is
adequate; Work environment

• For property owners

– Preserve and develop the property entrusted
CARROLL'S PYRAMID OF CSR:
LEGAL RESPONSIBILITY

Enterprises are obliged to fully comply with the provisions

of law on the following aspects:
 Competitive regulation;
 Protect consumers;
 Environmental Protection;
 Safe and equal;
 Encourage detection and prevention of misconduct.
CARROLL'S PYRAMID OF CSR:
ETHICAL RESPONSIBILITY

• Moral duty is expressed through the principles and values

that are respected in the mission statement and strategy
of the organization.
CARROLL'S PYRAMID OF CSR:
PHILANTHROPIC RESPONSIBILITY
Moral duty is expressed through the contribution of
business to the social community in terms of:
• Improve the quality of life;
• Share the burden on the government;
• Improve the leadership capacity of employees;
• Develop ethical personality for employees.
CARROLL'S PYRAMID OF CSR:
CORPORATE PHILANTHROPY
• Corporate donations: providing physical/visible things to….
• Corporate voluntarism: company commits time/labor/etc
of their corporation for social activities. Ex: company send
employees to teach housewives in urban area about
financial/budgeting management, financial-literacy…
• Corporate sponsorship: providing financial support for
events
• Social venture of philanthropy: A company uses their own
business to create things
ENVIRONMENTAL INTEGRITY &
COMMUNITY HEALTH MODEL

• This model developed by Redman.

• Many corporate in US adopted this model.
• Corporate contribution towards environmental integrity &
human health, there will be greater expansion
opportunities.
• Healthy people can work more & earn more.
• CSR is beneficial for the corporate sector.
• CSR in a particular form is welcome.
CORPORATE CITIZENSHIP MODEL
• Corporate citizenship: the extent to which businesses
strategically meet the economic, legal, ethical and
philanthropic responsibilities placed on them by various
stakeholders.
• 4 dimensions of corporate citizenship:
–Strong sustained economic performance
–Rigorous compliance
–Ethical actions beyond what the law requires
–Voluntary contributions that advance the reputation
and stakeholder commitment of the organization.
STOCKHOLDERS & STAKEHOLDERS MODEL
STOCKHOLDERS & STAKEHOLDERS MODEL

• Productivists believe that the only mission of a firm is to maximize the

profit.
• Philanthropists who entertain the stockholders. CSR is dominated by
moral obligations & not self-interest.
• Progressivists believes the corporate behavior basically motivated by
self interest & should have ability to transform the society for good.
Ethical Idealism concern with sharing of corporate profits for
humanitarian activities.
NEW MODEL OF CSR
CSR STRATEGY
1 . G R E E N S T R AT E G Y
2 . C S R T O W A R D E N E R G Y E F F I C I E N C Y,
EMISSIONS REDUCTION &
B I O D I V E R S I T Y C O N S E R V AT I O N
3 . C S R T O W A R D S S U S TA I N A B L E
WA S T E M A N A G E M E N T
GREEN STRATEGY
• Green Buildings: The LEED certification by the US Green Building
Council has caused the growth of green building movement.
• Emphasis on green manufacturing in order to reduce the emissions of
green house gases and environmental pollutions.
• Green products initiatives in order to reduce the toxic chemicals
• Products stewardship encourages everyone in the value chain to
contribute to product sustainability from producers to regulators to
retailers to consumers thereby achieving zero waste and sustainable
production.
EXAMPLE OF GREEN BUSINESS
• Whole Foods installed solar panels at its stores and
purchased wind energy to serve 100 percent of its non-
renewable energy needs.
• General Electric (GE) is committed to reducing pollution
and doubling its research and development budget for
clean technologies.
• Wal-Mart also designs a variety of environmentally friendly
stores, reducing energy consumption and pollution. This
model is applicable to all new stores open.
CSR TOWARD ENERGY EFFICIENCY,
EMISSIONS REDUCTION & BIODIVERSITY
CONSERVATION
• Innovation in alternative transportation such as hybrid vehicles and
electric vehicles by companies like Toyota, Nissan, Honda and Tesla
Motors in order to curb the greenhouse gas emissions and reduce the
environmental hazards.
• Many companies like IBM, Staples and BP are purchasing Renewable
Energy Credits (RECs) in order to support the clean energy projects.
• Companies such as Ben & Jerry, IKEA, The Body Shop are promoting
Biodiversity conservation, sustainable forestry initiative, organic
farming and fair trade in order to balance the need for both business
growth, sustaining and preserving the depleting natural resources.
CSR TOWARDS SUSTAINABLE WASTE
MANAGEMENT

• Towards the goal of achieving a cleaner environment, usage of

sustainable packaging materials made of biodegradable plastics in stead
of PVC plastics.
• Reducing or making the productive use of waste in order to achieve
the ultimate goal of zero-waste by emphasizing on recycling.
CSR PRACTICES
REPUTATION

• Reputation is one of an organization’s greatest intangible

assets with tangible value. The value of a positive
reputation is hard to quantify, but it is very important.
ISSUES AT NIKE
• Nike Inc producer of footwear, clothing, equipment and accessory
products for the sports and athletic market.
• Selling to approximately 19,000 retail accounts in the US, and
approximately 140 countries around the world.
• Manufactures in China, Taiwan, Korea, Indonesia , Mexico as well as in
the US and in Italy.
• People working - 58% young adults between 20 and 24 years old, 83%
- women.
• Few have work-related skills when they arrive at the factory.
• Issue- unhealthy work environment – debates heated arguments,
verbal abuse, 7.8% of workers reported receiving unwelcome sexual
comments, and 3.3% reported being physically abused. In addition,
sexual trade practices in recruitment and promotion were reported
VODAFONE
• Vodafone promised to cut down their carbon dioxide emissions in half
by 2020 through improving the energy efficiency of its global mobile -
phone networks. Additional points for Vodafone on CSR because they
are constantly updating us with the results of the campaign; no matter
whether it’s going well or not.
• Future promises includes pledging to recycle 95% of network
equipment waste and plans to reduce work-related accidents that
cause lost time by 10%. On top of that,Vodafone is a leading business
in socially responsible products such as the text-to-speech software
for blind people and easy-to-use handsets for the elderly.
ACTIVITY 1
• Form groups of 3-5 students.
• Look for practical examples of the implementation of
corporate social responsibilities/obligations.
• The groups present and present their examples in front of
the class.
ACTIVITY 2: INDIVIDUAL EXERCISE

1. Define “green” company.

2. Find an example of green company.
3. Explain how those firms establish “green” operation.
4. What benefits does this firm gain through being green?