Social Responsibility and

Business
Corporate Responsibility
 refers to ethical business practices that aim to
benefit the community, the environment, and
employees and their families
 Philanthropic
Responsibility

Ethical Responsibility

Legal Responsibility

Economic Responsibility
Many business managers view such programs
as costly activities :

Rewards Society

Expense Company
Strategic Management and
Stakeholder Relationship
Stakeholder

 those people and groups who have a "stake" in

some aspect of company's products, operations,
markets, industry or outcomes
 Primary Stakeholder and Secondary
Stakeholder
Primary Stakeholder Secondary Stakeholder
 those whose continued  do not typically engage
association is in transactions with a
absolutely necessary company and thus are
for a firm's survival. not essential for it's
survival.
Reputation Management
 Process of building and sustaining a company's
good name and generating feedback from
stakeholder
Process of Reputation Management
1. Interaction of organizational identity
2. Organizational image
3. Organizational performance
4. Organizational reputation
Crisis Management
 process of handling a high impact event characterized
by ambiguity and the need for swift action

 Prodromal stage
 Acute stage
 Chronic stage
 Crisis resolution
Corporate Governance
 formal system of oversight, accountability and
control for organizational decisions and resources
Legal, Regulatory and
Political Issues
Government’s Influence on Business
Laws are enforced through the judicial system
 Protects Society and supports an acceptable quality of
life.
 Settles disputes and punish criminals
Rationale for Regulation
1. Preventing trust and monopolies from using their
market dominance to negatively manipulate output,
pricing and quality
2. Supporting environmental initiatives, equality in the
workplace and product safety
Global Regulation
a) North American Free Trade Agreement (NAFTA)
 Eliminates virtually all tariffs on goods produced and
traded between the U.S., Canada, and Mexico
b) European Union (EU)
 Promotes free trade among its members
Benefits of Regulation
1) Greater equality in the workplace
2) Safer workplaces
3) Resources for disadvantaged societal members
4) Safer products
5) More information about products
6) Greater product variety
7) Cleaner air and water
8) Preservation of wildlife
Federal Sentencing Guidelines for
Organizations (FSGO)
 Focus on crime prevention and detection by mitigating
penalties for firms that have implemented reasonable
program in the event that one of their employees
commits a crime.
Corporate Approaches to Influencing
Government
1) Lobbying
 Process of persuading public and/or government
officials to favor a particular position in decision making
2) Political Action Committees
 Organizations that solicit donations from individuals
and then contribute these funds to candidates running
for political office
3) Campaign Contribution
 Corporate Donations
7 Steps to Effective Compliance and
Ethics Program
1) Establish codes of conduct
2) Appoint or hire high-level compliance manager
3) Take care in delegating authority
4) Institute a training program and communication
system
5) Monitor and audit for misconduct
6) Enforce and discipline
7) Revise program as needed
Ethics
 Relates to choices and judgments about acceptable
standards of conduct that guide individuals and
groups.
Business Ethics
 Comprises the principles and standards that guide the
behavior of individuals and groups in the world.
Ethical Issues
a) Abusive Behavior
b) Lying
c) Conflict of Interest
d) Fraud
 Accounting Fraud
 Marketing Fraud
 Consumer Fraud
e) Discrimination
Types of Justice
1. Distributive
2. Interactional
3. Procedural
Some Important Components of
Ethical Decision
a) Individual Factors
b) Organizational Relationship
 Organizational Culture
 Significant Others
c) Opportunity
Greenwashing
Codes of Conduct
 Formal statement that describes what an organization
expects from its employees
Ethics Officer
 A high ranking person known to respect and
understand legal and ethical standards
Whistle Blowing
 Exposing an employer’s wrongdoings to outsiders such
as the media or government regulatory agencies
5 Powers that can be used to motivate
individuals
1) Reward
2) Coercive
3) Legitimate
4) Expert
5) Referent
Employee
 Primary stakeholder that is so important to the success
of any company
Employee – Employer Contract
 The mutual understanding between employee and
employer
Workforce Reduction
 Process of eliminating employment positions
Consumer
 The person or stakeholders that utilize the goods and
services
Consumer Fraud
 Illegal or deceptive act of the consumer
Motivations for illegitimate consumer
complaints
1. Freeloaders
2. Fraudulent Return
3. Fault Transferor
4. Solitary Ego Gains
5. Disruptive Gains
6. Peer Induced Esteem Seekers
Consumer Rights
 Right to Choose
 Right to Safety
 Right to be informed
 Right to be heard
 Right to seek redress
Community
 Anyone who is affected by the activities of the business
Neighbor of Choice
 Doing philanthropic activities will make the company
the neighbor of choice
Community Relations
 The company must build good relationship with the
community to get their loyalty to the product provided
by the organization
Economic Issues
 To decrease the level of economic issues, the
organization can hire employees inside their
community
Legal Issues
 The business needs license to operate before it starts
conducting business
Philanthropy
 Act of benevolence
 Charitable activities
Stakeholders in Strategic
Philanthropy
 Employees
 Customers
 Business Partners
 Community and Society
Business Concerns about the Use of
Technology
 Focus on core competencies while seeking to explore
outsourcing options
 Take advantage of new software and other systems
Role of Business in Technology
1) Reactive and Proactive attempts to market
2) Make effective use of Technology
Sustainability Issues
Sustaining while maintaining Natural
Environment Includes
1) Improvement to Business Strategies
2) Economic Sectors
3) Work Practices
4) Technologies
5) Lifestyle
Global Environment Issues
1) Atmospheric Issues
2) Water Issues
3) Land Issues
Cultural Intelligence
1) Cognitive
2) Motivational
3) Behavioral
Recent Developments in Philippine
Corporate Governance
 Comply and Explain Approach
 Principles of Proportionality
The New Code has sixteen (16) principles that are
distributed among five (5) main sectors, namely:
1. Board’s Governance Responsibility – Principle 1 – 7
 Principle 1 – Establishing a competent board
 Principle 2 – Establishing clear roles and
responsibilities of board
 Principle 3 – Establishing board committees
 Principle 4 – Fostering commitment
 Principle 5 – Reinforcing board independence
 Principle 6 – Assessing board performance
 Principle 7 – Strengthening board ethics
Cont.
2. Disclosure and Transparency – Principle 8 – 11
 Principle 8 – Enhancing company disclosure
policies and procedures
 Principle 9 – Strengthening the external auditor’s
independence and improving audit quality
 Principle 10 – Increasing focus on non-financial and
sustainability reporting
 Principle 11 – Promoting a comprehensive and
cost-efficient access to relevant information
Cont.
3. Internal Control System and Risk Management
Framework – Principle 12
 Principle 12 – Strengthening the internal control
system and enterprise risk management
framework
Cont.
4. Cultivating a Synergic Relationship with
Shareholders – Principle 13
 Principle 13 – Promoting shareholder rights
Cont.
5. Duties of Stakeholders – Principle 14 - 16
 Principle 14 – Respecting rights of stakeholders and
effective redress for violation of stakeholder’s
rights
 Principle 15 – Encouraging employees’
participation
 Principle 16 – Encouraging sustainability and social
responsibility