Corporate Responsibility and Society MNGT 5990 Fall 2013 - Shanghai, PRC Robert Serben, Ph.D. Week 1 - Foundations

Corporate Responsibility and SocietyMNGT 5990

Fall 2013 - Shanghai, PRCRobert Serben, Ph.D.Week 1 - Foundations

Corporate Social Responsibililty 2

Introductions

• Please introduce yourself with the following format:1. Name2. Your occupation3. What you would like to gain from this course


Course objectivesStudents will be able to:1. Identify conflicting interests and values between organizations and

their members, stakeholders, and publics. 2. Identify and evaluate the ethical and social claims and appeals

organizations and individuals employ to justify their values and actions.

3. Apply major ethical theories including utilitarianism, ethics of duty, and virtue ethics to concrete organizational and personal situations.

4. Critically evaluate case studies and their own careers applying appropriately the concepts of the corporation and of Corporate Social Responsibility (CSR).

5. Recognize ethical issues confronting managers, including organizational challenges to their integrity


Teaching methods

• Lecture• Discussion • Team activities• Case studies


Your role

• You are in control of your learning - and your grade1. Attend class, be on time, read and prepare2. Stay involved and active in class3. Your opinion is an important contribution4. What you invest is what will be returned to you


My role

• Present course content• Discussion starter• Encouragement


Professional courtesy

• Place cell phones on vibrate• Receive telephone calls outside of class• No texting in class• Personal computer use limited to taking class

notes and team projects• Only one conversation – the class conversation


Grading

COURSE REQUIREMENTS: Points Possible

a. Class Attendance 300

b. Team projects 300

c. CSR Case Studies 300

d. The Final Examination 300

Letter Grade Numerical Score

A 1200-1100 (4.00)

A- 1099-1000 (3.67)

B+ 999-900 (3.33)

B 899-800 (3.00)

B- 799-700 (2.67)

C 699-600 (2.00)

F 599-000 (0.00)

I Incomplete (0)

W Withdrew

WF Withdrew/Failed


Class discussions

• Learning =

• In class discussions: Your views are important– “I’m not sure” – acceptable answer– “It all depends…” acceptable answer

Content Interactions Reflection Motivation+ + X


This week

Introductions

Foundational Concepts

CSR value and Practices

Corporate Social Responsibility 11

End of course team project

• CSR Consulting Company– Headquarters: Shanghai– Offices in: New York, Chicago, London, Berlin,

Johannesburg, Mumbai, Singapore, Jakarta– Services: Help businesses set objectives and

evaluation strategies for corporate social responsibility programs.

– Objective: Help clients understand the value of CSR for their business

Corporate Social Responsibility 12

PERCEPTIONS


What do you think of…

Marketing

Operations CSR

Finance


GroupsWhen thinking about creating and maintaining a successful business, which are the most important groups that need to be considered?


The Perfect Company

• Please identify three to five word or phrases of the perfect company or business – from your point of view

The Perfect Company

1.2.3.4.5.


CSR FOUNDATIONAL CONCEPTS


Business/Society relationship

Create much of the wealth and well-being in societies

Capable of harm (example: pollution

Globalized capabilities


CSR

“Corporate social responsibility”A collection of evolving terms, concepts, theories, and practices to describe one essential idea:

– That business has the responsibility to do more than comply with the minimum requirements of law and the generation of a profit for its owners.


“Just Good Business”

• CSR now seen as “mainstream”• Stronger interest by governments• Societies and stakeholders have higher

expectations• Three layers

– Traditional philanthropy– Risk management– Value creation


ISO – Social responsibility

• ISO 26000 – “Business and organizations do not operate in a vacuum. Their relationship to the society and environment in which they operate is a critical factor in their ability to continue to operate effectively. It is also increasingly being used as a measure of their overall performance.”

• Found at:http://www.iso.org/iso/home/standards/iso26000.htm


Shareholder value

• “The Dow Jones Sustainability Index created a commonly accepted definition of CSR: "a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments." This definition encompasses a broad range of corporate values and concerns, including reputation, transparency, social impact, ethical sourcing, profitability and civil society -- the list goes on. As a result of the interdependent nature of CSR, integration of its values remains a challenge for many organizations.”

– “The balanced scorecard and corporate social responsibility : aligning values for profit.” Web location: http://www.greenbiz.com/news/2005/10/23/balanced-scorecard-and-corporate-social-responsibility-aligning-values-profit


Strategic CSR – class text

• “The incorporation of a holistic CSR perspective within a firm’s strategic planning and core operations so that the firm is managed in the interests of a broad set of stakeholders to achieve maximum economic and social value over the medium to long term.”

• P. xiii. Glossary of Terms. Class text.


Strategic CSR is not

• Exclusively philanthropic charitable giving• Unrelated to the business strategy• Solely for image building• Rigid


Strategic CSR is about

Value Balance

Accountability


Strategic CSR is

• Strengthening the strategic capabilities of the organization– Activities supportive of unique business needs– A balanced relationship among stakeholders

• Adaptable to changing conditions• Medium to long term view


Fundamental points1. Business does not

exist in a vacuum2. The environment

surrounding business is always changing

3. CSR takes a longer term view of success


CSR definition: Two componenets

1CSR: A view that business assumes a responsibility to pursue goals in addition to profit. (Why?)

2CSR: A responsibility among stakeholders to hold the business accountable for its actions. (Who?)


CSR current state

Characteristics• Recognizes the power of

business to do good or harm• Growing in acceptance• Variable/fluid in application• Evolving in theory• Controversial

– “Just Good Business.” The Economist.

– Location: http://www.economist.com/node/10491077

And…• Seen as valuable


Largest CSR survey

http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/corporate-responsibility-reporting-2011.pdf

“While corporate responsibility reporting was broadly considered an ‘optional’ activity only a few years ago, more organizations are generating CR reports to meet rising stakeholder demands for greater accountability, transparency and accuracy in assessing parts of the business that are not necessarily financial, but which contribute to the overall value of the company.”


The CSR hierarchy – p.6

Economic Responsibilities

Legal Responsibilities

Ethical Responsibilities

DiscretionaryResponsibilities

Stra

tegi

c CS

R


Three arguments for CSR

1. Moral argument:– Successful operations reflects the values of the

larger society

2. Rational argument:– Maximize performance by minimizing restrictions

3. Economic argument:– Reflects concerns of stakeholders over medium

to longer term


Fortune – 2011 Global 500 (top 10)Company Rank #

EmployeesHome $ Millions USD

Wal-Mart Stores 1 2,100,000 U.S. $421,849

Royal Dutch Shell 2 97,000 Netherlands $387,152

Exxon Mobil 3 103,700 U.S. $354,674

BP 4 79,700 Britain $308,928

Sinopec 5 640,535 China $273,422

China National Petroleum 6 1,674,541 China $240,192

State Grid 7 1,564,000 China $226,294

Toyota Motor 8 317,716 Japan $221,760

Japan Post Holdings 9 223,000 Japan $203,958

Chevron 10 62,196 U.S. $196,337

Total 6,889,388 $2,834,566Web location: http://money.cnn.com/magazines/fortune/global500/2011/snapshots/10344.html


CSR VALUE


Value

How do we know something has value?

Do all valuable things use the same measures?

Why is adaptability important in business?


How do we know?

• Watch (observe)• Compare to context• Compare to others• Look for benefits


CSR relevancy

• Five trends that seemingly will grow throughout the 21st century:

1.Growing affluence2.Ecological sustainability3.Globalization4.Free flow of information5.Brands

37

CSR relevancy

Five mega - issues 1. Climate change2. Pollution / health3. Globalization backlash4. The energy crunch5. Erosion of trust

Five demanding stakeholders 1. “Green" consumers2. Activist shareholders3. Civil society / NGOs4. Governments and

regulators5. Financial sector

http://www.greenbiz.com/news/2005/10/23/balanced-scorecard-and-corporate-social-responsibility-aligning-values-profit

Corporate Social Responsibility


Why STRATEGIC CSR is important

Consumers want to buy products from companies they trust

Regulate that which can’t be trusted

Suppliers want to form partnerships with companies they can rely on

Something for both of us


Why STRATEGIC CSR is important

Employees want to work for companies they respect

Treat me well and I’ll treat you well

Investors want to support firms they believe are socially responsible

Money loves safety


CSR


CSR Interactivity

• Each team to visit a website– Wison: http://www.wison.com/index.php?lang=en– Lenovo: http://www.lenovo.com/us/en/– Changan:http://www.globalchana.com

• How difficult was it to find the CSR page?• What did the CSR page tell you about:

– Aims– Audiences


Next week - Stakeholders

Busines

s

Preparation:


Next weekPreparation for Class:

Read: Chapter 2 in the class text CSR Trends 2010: Stacking Up the Results. A joint report by Craib Design &

Communications and PriceWaterhouseCoopers, LLC. Web location: http://www.pwc.com/ca/en/sustainability/publications/csr-trends-2010-09.pdf

o Pages: 4-5,, 20, 22-31, 36-39 Classroom Discussion Topics: 1) CSR relevancy (from previous week), 2) Stakeholders, 3) Business reporting/communication about CSR,4) Benefits of CSR Team activity:

Expectations/alignment/non-alignment profiles of stakeholders. Examination of the Huagnzhou Wahaha website.