978-1305500891 Chapter 17 Lecture Note

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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