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Lesson 9: Corporate Social Responsibility - Coggle Diagram
Lesson 9: Corporate Social Responsibility
Why CSR?
Pragmatic reasons
Business must use its power and influence responsibly, or risk losing it
can be costly to not do so, especially with the power of social media
may involve constructive engagement and involvement of stakeholders
Ethical reasons
Business, as a part of society, have a responsibility to act ethically
becomes as integral to the business as economic performance
May involve proactive corporate policies, practices which go beyond legal or regulatory requirements, enlightened HR policies and philanthropic contributions to the community
Often driven by corporate values, even if short-term impact to bottom line
Strategic reasons
Recognises interdependence between business and society
Firms should carefully analyse themselves for 2 things
Where in the firm’s value chain is it causing harmful social impact
Where can the firm do good by providing opportunities to create shared value, capitalising on its unique expertise and knowledge
Types of CSR
Legal responsibilities
Ethical responsibilities
Economic responsibilities
Philanthropic responsibilites
all 4 types should be considered simultaneously
Stakeholder's perspective
Any party who is affected by the business and its action and who has a stake in what the organisation does and how it performs
People or groups affected by a particular ethical decision
Other issues
Triple bottom line and environmental sustainability
Social
Environmental
Economic
Sustainable development
“Meeting the needs of the present without compromising the ability of future generations to meet their needs”
is CSR good for business?
Reputation
: benefits in lower costs, higher sales, ability to charge higher prices, better employer appeal; higher commitment among employees; stronger customer satisfaction; trust and loyalty
Socially responsible investors:
increasing importance of ESG (environmental, social and governance) investing, better retention
Cost of illegal conduct and governmental regulation
CSR & corporate performance:
the “virtuous circle”; differing impact of different initiatives
"Good business": business that does well financially by producing products that meet customer needs and by being responsible to employees and the broader community