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CHAPTER 17
MANAGING CORPORATE SOCIAL RESPONSIBILITY
GLOBALLY
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. articulate what is a stakeholder view of the firm.
2. apply the institution-based and resource-based views to analyze corporate social
responsibility (CSR).
3. participate in two leading debates concerning CSR.
4. draw implications for action.
GENERAL TEACHING SUGGESTIONS
Ask your students whether it is possible to “do well by doing good.” You will have plenty of
opportunity to discuss that as you go over this chapter. It can be useful to maintain a balance of
realism and idealism.
OPENING CASE DISCUSSION GUIDE
Emerging Markets: Foxconn
When large companies all over the world outsource their product manufacturing, they might well
be paying Foxconn to do the work. Foxconn manufactures products for companies like Apple
and Amazon. Foxconn has 1.3 million employees working in facilities in 11 countries. Although
workers are paid well compared to other workers in these countries, the tasks are repetitive and
require concentration—a combination that causes stress for the workers. In addition, workers live
in dorms at the factories, far away from home, which adds to the workers’ stress. In 2010, a
dozen workers committed suicide in a span of several months. In efforts to reduce workers’
stress, Foxconn began constructing factories inland, closer to the workers’ homes and families.
The company also began installing robots to handle some of the stressful, repetitive tasks.
CHAPTER OUTLINE: KEY CONCEPTS AND TERMS
Sections I through IV
I. A STAKEHOLDER VIEW OF THE FIRM
1. Key Concept
A stakeholder view of the firm urges companies to pursue a more balanced set of triple
bottom line, consisting of economic, social, and environmental performance. Despite the
fierce defense of the free market school, especially its shareholder capitalism variant, the
CSR movement has now become a more central part of management discussions around
the globe.
2. Key Terms
Corporate social responsibility (CSR) is the consideration of, and response to,
issues beyond the narrow economic, technical, and legal requirements of the firm to
accomplish social benefits along with the traditional economic gains that the firm
seeks.
Global sustainability is the ability to meet the needs of the present without
compromising the ability of future generations to meet their needs around the world.
Primary stakeholder groups are the constituents on which the firm relies for its
continuous survival and prosperity.
Secondary stakeholder groups are those who influence or affect, or are influenced
or affected by, the firm but are not engaged in transactions with the firm and are not
essential for its survival.
Stakeholder is any group or individual who can affect or is affected by the
achievement of the organization’s objectives.
Triple bottom line is the economic, social, and environmental performance that
simultaneously satisfies the demands of all stakeholder groups.
II. INSTITUTIONS, RESOURCES AND CORPORATE SOCIAL RESPONSIBILITY
1. Key Concept
The institution-based view suggests that when confronting CSR pressures, firms may
employ (1) reactive, (2) defensive, (3) accommodative, and (4) proactive strategies. The
resource-based view suggests that not all CSR activities satisfy the VRIO requirements.
Key Terms
Accommodative strategy is a strategy characterized by some support from top
managers, who may increasingly view CSR as a worthwhile endeavor.
Defensive strategy is a strategy that focuses on regulatory compliance but with little
actual commitment to CSR by top management.
Proactive strategy is a strategy that endeavors to do more than is required in CSR.
Reactive strategy is a strategy that would only respond to CSR causes when
required by disasters and outcries.
Social issue participation is firms’ participation in social causes not directly related
to the management of primary stakeholders.
III. DEBATES AND EXTENSIONS
1. Key Concept
Leading debates involving domestic and overseas social responsibility, (1) race to the
bottom versus race to the top, and (2) active versus inactive CSR engagement overseas.
2. Key Terms
None
IV. MANAGEMENT SAVVY
1. Key Concept
Savvy managers must understand the rules of the game, anticipate changes, and seek to
influence such changes. CSR battles should be chosen carefully, not simply as an effort
to imitate other firms’ CSR activities. CSR should be an integral part of the core
activities and processes of a firm.
2. Key Terms
None
