Session 3 Societal Context & Labour Context

What is the importance of corporate social responsibility (CSR)?

WHAT IS BUSINESS & SOCIETY?

Business: private, commercially oriented organizations

Society: a community/national or group of people with common values, traditions, institutions, activities & interests

Business

Community

Consumers

Owners

Government

Employees

THE BUSINESS-SOCIETY RELATIONSHIP

Assuming a relationship between business and society connects to notions of ‘embeddedness’ and organizations as ‘open systems’

SHOULD BUSINESS HAVE ANY RESPONSIBILITIES TO SOCIETY? AND IF SO, WHAT IS THE NATURE OF THOSE REPSONSIBILITIES?

CORPORATE SOCIAL RESPONSIBILITY

CSR is: The obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests. IE….

Corporate Social Responsibility (CSR)

obligations that involve going beyond:

the production of goods/services at a profit

the requirement of competition, law or custom

To create policies, make decisions & engage in actions that are desirable in terms of the values & objectives of society.

i.e. ethical responsibilities to society

Corporate Social Responsibility (CSR)

BUSINESS & SOCIETY: CONTEMPORARY CONCERNS

Business Business helping societyhelping society

Example: Levi’sExample: Levi’s

THE ROLE OF BUSINESS IN SOCIETY:CORPORATE SOCIAL RESPONSIBILITY

Examples of CSR:

• 3M & health of employees

• Merck Pharmaceutical & River Blindness

Can you think of examples of companies that have recently demonstrated CSR?

THE ROLE OF BUSINESS IN SOCIETY:CORPORATE SOCIAL RESPONSIBILITY

• The social responsibility of business encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time (Carroll, 1979).

• A PYRAMID OF RESPONSIBILITIES!

THE CSR PYRAMID

Philanthropic ResponsibilitiesBe a good corporate citizen

Ethical ResponsibilitiesBe Ethical

Legal ResponsibilitiesObey the Law

Economic ResponsibilitiesBe Profitable

(Adapted from Karakowsky, Carroll, Bucholtz, 2007)

THE CSR PYRAMID

• Components can be interdependent rather than mutually exclusive.

e.g., serving ethical responsibilities does not necessarily mean that profit (economic responsibilities) will be sacrificed – or vice versa.

THE CSR PYRAMID

• However, there may also be tensions between the components –

e.g., “profits versus ethics”.

THE CSR PYRAMID

• Our discussion of this pyramid has already implied that business is responsible to more than simply its owners or shareholders!

• Rather there exists a network of STAKEHOLDERS FOR WHICH THESE REPSONSIBILITIES EXITS

• What or who are the stakeholders of business? Find out in our next module!

THE STAKEHOLDERS OF BUSINESS

STAKEHOLDERS, BUSINESS & SOCIETY

WHAT IS A STAKE?WHAT IS A STAKE?

An InterestAn Interest or shareor share in an activity A RightA Right - a legal right e.g. to fair

treatment or a moral right, e.g. to expect satisfactory service

OwnershipOwnership – a legal title to an asset/ property

A stakeholder is any individual or group who can affect or is affected by the actions, decisions, policies, practices or goals of the organization

STAKEHOLDERS, BUSINESS & SOCIETY

STAKEHOLDER VIEW OF THE FIRM: Primary & Secondary Stakeholders

Adapted from KCB, 2007

F I R M Government& Regulators

Shareholders/owners etc

Employees

Customers/consumers

LocalCommunities

Suppliers etc

Soc. PressureGroups

Competitors Trade Bodies

Media & Academics

Should business have some kind of moral obligation to society?

Is CSR a desirable goal?

DEBATING CORPORATE SOCIAL RESPONSIBILITY

AGAINST CSR FOR CSR

Sole responsibility of business is to make a profit

Business should conform to social rules

Business is not equipped to manage CSR

Business talent, capital & expertise could ensure CSR

Business has enough power – shouldn’t dictate morality

Could use its power for CSR, i.e. using its power positively

Costs of CSR would be passed on to consumers & limit national competitiveness

CSR provides long term benefits by enhancing business environmentOTHER ARGUMENTS…?

THE LABOUR CONTEXT

EMPLOYEES ARE IMPORTANT STAKEHOLDERS IN ANY BUSINESS.

WHAT OBLIGATIONS DOES BUSINESS HAVE TOWARD LABOUR?

HOW DO UNIONS HELP ADDRES LABOUR ISSUES?

THE EMPLOYEE STAKEHOLDER

EMPLOYEE RIGHTSGuarantees of fair treatment in the

workplace granted by courts, legislatures or

employers.

Provide workers with: Desired outcomes Protection from unwanted outcomes

Visible minorities

DESIGNATED EMPLOYEE GROUPS

Persons with Disabilities

AboriginalsWomen

WOMEN

Segregated Lower status occupations Under-representation in many

areas Career barriers Gender-stereotyping

First Nations/Aboriginals

Vastly underrepresented in the workforce

Education & employment gaps Educational, geographical and

perceptual barriers

INDIVIDUALS WITH DISABILITIES Higher unemployment rate

compared to national average Access, physical and attitudinal

barriers Economic barriers and social

discrimination

VISIBLE MINORITIES

Account for most of the growth in the labour force

Barriers include: cultural difference issues, foreign credential issues, language issues

Highest unemployment rates

THE EMPLOYEE STAKEHOLDER

PROTECTING EMPLOYEE RIGHTS

The Case of: Women, Aboriginal people, people with disabilities, members of visible minorities

Legal Protection Against Discrimination Canadian Charter of Rights & Freedoms The Canadian Human Rights Act

THE EMPLOYEE STAKEHOLDEREMPLOYMENT EQUITYTreating people fairly by

recognizingindividual differences

“treating people fairly by recognizing that different individuals and groups require different measures to ensure fair and comparable results”

THE EMPLOYEE STAKEHOLDEREMPLOYMENT EQUITY

Deal with systemic discrimination & inequality at work

THE EMPLOYEE STAKEHOLDER

EMPLOYMENT EQUITY

Eliminates employment barriers for specified groups

THE EMPLOYEE STAKEHOLDEREMPLOYMENT EQUITY

Redresses past discrimination

THE EMPLOYEE STAKEHOLDEREMPLOYMENT EQUITY

Improve access and foster equity

UNIONSUnions are the organizations

most directly responsible for representing the interests of Canadian working people.

- workers’ associations formed to enhance their power in dealings with employees

Union membership

Why have unions membership rates fallen?

- Manufacturing decline

- Part time work- Focus on public sector

UNION ACTIONS

The mutual insurance function of unions

Collective bargaining

Legal enactment

COLLECTIVE BARGAINING

- Negotiated outcomes

- Increasing issues reflect increasing diversity of workforce

Political action and expanded scope- Social unionism

- - economic development, human and labour rights overseas

UNION IMPACTS

- Impact on productivity

- Impact on management

- Impact on society

ARE UNIONS STILL NEEDED?- What would society look like

without unions?

- Workplace representation

- -balancing interests of big business with labour interests

KEY LEARNING POINTS

CSR: Responsibilities extend beyond just those to the owners or Shareholders of the business

• Stakeholders

• CSR Debate

• Labour context/employee Stakeholder:Designated employee groupsLabour unions