Social Responsibility

Defined
Group 1

Social Responsibility
defined as the adoption by a business of
a strategic focus for fulfilling the
economic, legal, ethical and
philanthropic responsibilities expected of
it by its stakeholders.

Characterization of Social Responsibility

Characterization Description
1. License to operate

A firm should find the most efficient way to

meet requirements from the government and
other external groups.

2. Long-term to business investment

Designed to improve the business environment

for future progress.

3. Vehicle for achieving goals and reputation

Companies will have stronger loyalty, more

committed employees, better government
relations, and ultimately, stronger
reputations.

4. Activity to avoid exposure and risk

Responsible activities help companies avoid

being singled out or exposed to unnecessary
outsider intrusion.

5. Economic and constructive

Companies should reinforce the economic

foundation and viability of the communities in
which they operate.

6. Relationship

Business and society are interwoven and

interdependent, rather than distinct entity.

7. Responsibility to stakeholders

Management should act responsibly in its

relationships with other stakeholders who
have a legitimate interest in the business.

8. Oxymoron

Companies are designed to increase

shareholder wealth

Social Responsibility Applies to All

Types Of Businesses
It is important to recognize that all types of
businesses

small
and
large,
sole
proprietorships and partnerships, as well as
large corporations implement social
responsibility initiatives to further their
relationships with their customers, their
employees, and their community at large.

Social Responsibility Adopts a Strategic Focus

Social responsibility requires a formal commitment, or way of
communicating the companys social responsibility philosophy and
commitment.

Herman Miller Inc.s Blueprint for Corporate Community

Curiosity and Exploration
Performance
Engagement
Design
Relationships
Inclusiveness
A Better World
Transparency
Foundations

TOTO Corporate Social Responsibility Committee Structure

CSR Committee
(with the president as
Chairman)
(Business Office)
CSR Promotion
Division
Society and
Management

Preservation of the
Global Environment

Corporate
Governance

Customer
Satisfaction

Product
Development

Group
Management

Supply Chain
Management

Packaging and
Distribution

Risk
Management

HR
Management

Energy Measures

Social Contribution
Global Harmony

Environmental
Protection

Communications

Four Subcommittees

Four Subcommittees

Four Subcommittees

Compliance

Social Responsibility Fulfils

Societys Expectations
Another

element

responsibility

of

involves

our

definition

societys

of

social

expectations

of

business conduct. Many people believe that businesses

should

accept

responsibility:

and

abide

economic,

by
legal,

four

types

ethical,

of
and

philanthropic. To varying degrees, the four types are

required, expected, and/or desired by society.

Pyramid of Responsibility

Philant
hropic
Respon
sibilitie
s

Ethical
Responsibilities

Legal
Responsibilities
Economic
Responsibilities

Recommendations for Countering Corruption

By
By lower
lower income
income countries
countries

Increase
Increase resources
resources and
and political
political will
will for
for anticorruption
anticorruption efforts
efforts
Enable
Enable greater
greater public
public access
access to
to information
information about
about budgets,
budgets, revenue
revenue and
and
expenditure
expenditure

By
By higher
higher income
income countries
countries

Combine
Combine increased
increased aid
aid with
with support
support for
for recipient-led
recipient-led reforms
reforms
Reduce
Reduce tied
tied aid,
aid, which
which limits
limits local
local opportunities
opportunities and
and ownership
ownership for
for aid
aid
programs
programs

By
By all
all countries
countries

Promote
Promote strong
strong coordination
coordination among
among governments,
governments, the
the private
private sector,
sector, and
and civil
civil
society
society to
to increase
increase efficiency
efficiency and
and sustainability
sustainability in
in anticorruption
anticorruption and
and good
good
governance
governance efforts
efforts
Ratify,
implement
Ratify, implement and
and monitor
monitor existing
existing anticorruption
anticorruption conventions
conventions in
in all
all
countries
countries to
to establish
establish international
international norms.
norms. These
These include
include the
the UN
UN Convention
Convention
Against
Against Corruption,
Corruption, the
the OECD
OECD Anti-Bribery
Anti-Bribery Convention,
Convention, and
and the
the regional
regional
conventions
conventions of
of the
the African
African Union
Union and
and Organization
Organization of
of American
American States.
States.

Social Responsibility Continuum

Minimal
Minimal

Strategic
Strategic

Economic and legal

considerations focusing
on contractual
stakeholders

Economic, legal, ethical,

and philanthropic
considerations focusing on
all stakeholders

Managing Social Responsibility in Home and Host Markets

High
Level of citizenship
expectations in the host
market

Low

3
Expansionists

4
Activists

Companies adopt
citizenship profiles that
are greater than in their
home market.

Companies adopt
citizenship profiles that
are active both at home
and abroad.

1
Minimalists

2
Reductionists

Companies adopt
citizenship profiles that
are at a minimum at
home and abroad.

Companies adopt
citizenship profiles that
are lower than in their
home market.

Low

High

Level of citizenship expectations in

the home market

Compliance CSR
Strategic CSR perspective
Social
Responsibility
Requires
Stakeholder
Stakeholder group
perspective

Forced CSR perspective

Owners

Perceives CSR as a cost

or tax to do business

Perceives CSR as a mechanism to

potentially create value more
effectively and efficiently, create
competitive advantage, hence
enhance the economic value of the
firm.

Result in lower returns to the

owners due to the
potentially higher cost
structure and damage to the
corporations reputation.

Creditors

No impact on cost of
credit

Credit ratings are impacted by social

and environmental risks and how the
firm manages these risks
Superior CSR management tends to
lower levels of social and
environmental risks and lower the
probability of default, therefore
reducing the cost of capital

Cost of credit may be

adversely impacted if
creditors perceive that firm
costs are increased or
revenues reduced due to a
forced CSR may be
associated with higher
financial risk.

Customers

No impact on target
market, marketing mix,
or marketing strategy

A superior environmental and social

reputation could allow the firm to
target more socially and or
environmentally oriented market
segments, creating additional value
for the customers and superior
returns to the firm

May result in alienation of

specific customer segments,
loss of brand equity, and
negative impact on
corporate reputation.

Regional/national
community

No impact

May become a corporate citizen

role model may enhance
regional/national reputation for
social and environmental
management. SA 8000. Emas, and
ISO 14000 have become standards for
global market access

May result in an increase in

regulatory scrutiny.

Local community

No impact

Tends to result in a superior

reputation in the community, with
many positive consequences

Tends to result in a very

negative reputation in the
community, with many
negative consequences