CSR Framework/Foundations
• Corporate social performance (CSP) = Corporate social responsibility + corporate social
irresponsibility
• CSP is fluid and constantly changing in its goals
o Can be broken into phases of corporate responsibility (ex: phase 1 is profit
maximizing management, phase 2 is trusteeship management, phase 3 is quality
of life management)
• Conscious capitalism = takes on a stake holder view
o Wholefoods example: they think more about the long term than the immediate
short term
• Primary responsibilities of the firm used to be economic (not concerned about other
stakeholders including employees)
• Primary stakeholders vs secondary stakeholders
• Corporate tax inversion: a company moves its corporate legal domicile to another
country where the tax rate is lower but they will still keep their business units in the
United States (moving to a safe haven)
o Ex: Burger King moving to Canada. Saved them 8.1 million dollars a year in taxes
• The US has the highest effective corporate tax rate
• Zone of discretion: gap between society’s expectations of business’s performance and
business’s actual social performance
• CSR Pyramid →
o Corporate responsibility includes (top to bottom): Philanthropic, ethical, legal and
economic responsibilities
• Con CSR
o Profit maximization
o Business has enough power
o Lack of social skills
o International markets
• Pro CSR
o Public image
o Avoidance of government regulation
o Problems can become profits
o Long-run self interest
• Profitability and CSR can both be in line
Business Ethics
(Get notes from day 1)
• (look at flow chart)
o Internal vs external locus of control
▪ internal = my decisions affect outcomes, I have control
▪ external = outside factors affect outcomes, I am not in control
o Ethical philosophy (16 philosophys from last weeks class)
• Recommendations
o Behave ethically yourself
o Screen potential employees
▪ Within legal boundaries, screen employees
o Develop a meaningful code of ethics
o Provide ethics training
o Reinforce ethical behavior
o Create positions, units and other structural measurements to deal with ethics
• Whistleblowers
Assessing Stakeholder Interests
1) Single issue or multiple issue?
