Corporate Social

Responsibility
Explore

the notion of corporate social

responsibility
What is this?
Is it a legitimate concern of business?

What is Business Social

Responsibility?
Should

business be involved in solving all

of societys problems
Should it specialize in only some problems?
If so which problems?
Is the primary responsibility of business to
stockholders ?
Should most profits be diverted to socially
responsible activities?

Definition of Social
Responsibility
Business

has an obligation to society which

extends beyond economic and legal duties

It

is the extent to which an organization acts

to correct the negative effects and to
maximize the positive effects associated
with its production processes

What Actions are Socially

Responsible?
Giving

money to social causes?

Pro-abortion?
Anti-abortion?
Israel Vs PLO
Kurds, Serbs, ethic Albanians, etc...

Principle of Public
Responsibility
Primary

Involvement - Relationships with

customers, suppliers and employees

Secondary

Involvement - Relationships and

impacts ancillary to use of products sold

Principle of Public
Responsibility
Use

Public Policy as a guide

What

do you think of this?

Should Business Act in A

Socially Responsible
Manner?
Milton

Freidman - Its the social

responsibility of business to increase its
profits
What do you think?

Determinants of the Level of

Social Responsibility
Multiple

Organizational Goals
Stakeholder Interests
Management Philosophy
Organizational Culture
Corporate Governance

Levels of Social
Responsibility
1.

Social Obligation - Meet minimum

regulations, do what is required by law, no
more
2. Social Responsibility - Go beyond what
is required by law, mitigate negative effects
3. Social Responsiveness - Proactive
approach, promote positive change

Physical Environment
Social
Obligation

Social
Social
Responsibility Responsive

Comply with Clean up

EPA, state and pollution
local laws
beyond
requirements

Develop
technology to
reduce
pollution

Labor Markets
Social
Obligation

Social
Social
Responsibility Responsive

Comply with
wage and hour
laws, min.
benefits

Provide added Improve

benefits to
quality of
keep out
work life
unions

Planning for Social

Involvement
Strategic

Planning
Macro
Micro
Organizing
Phase I - Task Force
Phase II - Permanent Committee
Phase III - Institutionalization

Planning for Social

Involvement
Controlling

Social Audit
Value of Socially Desirable Output
Socially Undesirable Effects
Net Social Profit or Loss

Planning for Social

Involvement
Staffing/Rewarding

Reward Socially desirable activities

Involvement in Community
Public Service

Ben & Jerrys Ice Cream

About Ben & Jerry's Ice Cream

Playskool, Inc.
50 Years

in Chicago
Lincoln Logs
1968 Acquired by Milton Bradley
1984 Acquired by Hasbro Industries - New
Company Hasbro Bradley

Hasbro Bradley
Sept

19,1984 - announced Chicago facility

closed
700 jobs moved to East Coast in December
Did

Habro-Bradley Act in a Socially

Responsible Manner in Closing the Chicago
Plant?

IRB
1980

Playskool - $1mill Industrial Revenue

Bond (IRB)
Low interest tax exempt
Seek City Sponsorship
No Public Money Involved

IRB Approved
City Approved Application
Funds

used to buy automated equipment

Playskool employed 1200 people in
Chicago
Predicted an increase of 446 workers if IRB
Approved
Instead, employment decreased to 700

Problems with Chicago

Plant
Underutilization

of Plant
Poor Construction of 1967 Addition
Difficulty attracting R&D toy staff to
Chicago
Narrowly profitable -only because of goods
brought in from overseas

Chicago Workforce
75%

Black and Hispanic

60% Women
Unionized
Average Wage - $7 per hour
One Proposed Relocation Site - 100%
White Community
Other Site - Non-Union

Hasbro Bradley Actions

Denied
Greater

Plans of Plant Closure

North Pulaski Development

Council told would not move profitable
plant

Severance and Job

Placement Program

Posting of Names of Potential Employers

Posting Specific Job Openings
Outplacement Seminars on Job Search Techniques for
Salaried Employees
Offered Transfers to 70 Workers
Severance Package Over $3 mill Ratified by Union
Union Offered Outplacement Seminars in English and
Spanish

Community Reaction
Robert

Mier - City Economic Development

Commissioner This corporation has
shown no sense of responsibility
West Side Jobs Network and Greater North
Pulaski Development Corporation
Requested Closing be
Reconsidered

Community Reaction
Community

Groups - Asked City to file suit

since in violation of IRB Agreement
Employee Ownership or new owner
Rally Held at Toys-R-Us Store - Nov. 10
Speakers called for Boycott
Another Rally at Toys-R-Us - Nov. 23Biggest Shopping Day of Year

Media Reaction
National

Media Attention
New York Times
Wall Street Journal
Hasbro, The Grinch Who Stole Jobs
Reports on National News Programs

City Files Suit

December

4 - Mayor Harold Washington

filed suit against Hasbro-Bradley to stop
closing
Claimed violation of IRB
December

6 - Hasbro -Bradley paid over $1

mill to purchase IRB

City and Hasbro-Bradley

Agreement
January Agreement
City

Dropped Lawsuit
Playskool operations continued through
most of 1985 with 125 employees
Job Search Facilities Available to All
Employees

Agreement Cont..
$500

Paid to Employers for Each Playskool

Employee Hired
$100 Award to Employees Providing Job
Leads
$300,000 Advertising Campaign - Gayle
Sayers - TV Commercials and Print Ads to
Help Place Employees

End of Crisis
West

Side Jobs Network Called Off Boycott

Stephen Hassenfeld, Chairman of HasbroBradley Were doing all these things on
our own initiative. Even if we had won the
lawsuit, our ethical responsibility would
have been the same. There is no deal here.

 How

would you characterize HasbroBradleys Level of Social Responsibility?

Would you have done anything differently?
Was there a deal between the City and
Hasbro?
What lessons can be learned from this?