Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Lecture Notes
Part IV: A Behavioral Perspective
Chapter 8: Compliance and Accountability
Strategic Corporate Social Responsibility (5e) is organized into six distinct parts, each with
two chapters and a case study. Each part presents CSR from a different perspective.
Together, they draw on core concepts and innovative models to provide a comprehensive
overview of CSR, as well as detailing the practical challenges faced by firms that grapple
with this complex topic across all aspects of operations. Throughout the book and its
accompanying instructor materials, useful teaching tools, contemporary examples, online
resources, and provocative questions for discussion and debate allow easy application in the
classroom.
Part IV presents a behavioral perspective on CSR that draws on much of what we know
about economic exchange and human psychology. The goal is to understand strategic CSR
within the constraints of the world (and in particular, human behavior) as it is, rather than as
we would like it to be.
Chapter Summary
Chapter 8 begins with a discussion around the competing visions of how best to motivate
CSR—voluntary (self-regulation) or mandatory (coerced compliance). Strategic CSR works
most effectively if firms realize for themselves the self-interest in creating value for their
broad set of stakeholders. The chapter then introduces the concept of behavioral economics
and discusses how this exciting field can advance the value creation process. This chapter
concludes by looking at the variety of ways in which we measure CSR, a task that is essential
in order to hold firms to account. Before we can develop an effective CSR measure, however,
all costs need to be included in the production process. This is achieved via the concept of
lifecycle pricing.
Annotated Chapter Outline
1. Voluntary vs. Mandatory
This section opens the chapter by discussing competing views of how socially
responsible behavior by firms is best motivated. While some view coercion (primarily
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
2. Behavioral Economics
This section introduces an exciting area of economics that has important ramifications
for the debate around CSR. Behavioral economics combines what we know about
3. Accountability
This section delves into the complex issue of how best to measure CSR. Initially, it is
important to establish that all firms are incredibly complex organizations that are a
4. CSR Reporting
Once CSR is defined and broadly understood, we can begin to think about how best
5. CSR Pricing
One of the many advantages of being able to measure CSR is the ability to understand
all the cost implications of this complex topic. By doing so, we can then begin to
think about lifecycle pricing. This ensures that all costs associated with both
production and consumption of any product or service are fully accounted for in the
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Strategic CSR Debate
Motion: A carbon tax is the most effective way to combat climate change.
A strategic CSR perspective supports arguments in favor of this motion. Given
the complexities and potential abuse of a cap-and-trade market for carbon
(including determining overall levels and distributing credits, often free of charge
initially), economists overwhelmingly agree that a carbon tax is the most effective
method of reducing overall carbon emissions. Also, from a strategic CSR
perspective, the value of a carbon tax is that it levels the playing field for all
energy providers (accounting for the costs embedded in fossil fuels) and leaves
market forces as the primary determinant of a solution to the climate change
problem. Rather than the government subsidizing the solar or wind energy
industries, for example, raising the costs associated with carbon-based fuels
incentivizes the innovation necessary to find the best alternative fuel, whatever
that might be.
Suggested Answers to Questions for Discussion and Review
1. Should companies be persuaded to incorporate a CSR perspective voluntarily or
forced to do so? Why? Which of these two approaches is ideal? Which is more
realistic?
While there are clearly instances in which coercion (e.g., government policy or
targeted taxes) can protect vulnerable populations and enable societal progress, as a
2. In 2008, the Norwegian government introduced a law designed to force public
companies to have 40% female directors on their boards. At the time, “only 6
per cent of directors were female”; today, Norway “has the world’s highest
proportion of female board members . . . 44 per cent of directors are women.”
This compares, in 2018, to “10.6 percent—or 643—of the total 6,081 board seats
on Fortune 500 companies,” including 12 firms that “lack a single female board
member.” How well do you feel women are represented as executives and
directors in your country? Do you think a law similar to Norway’s would
improve things?
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
An answer to the first part of this question will depend on the student and the country
in which they are studying or come from. In general, however, quotas of some form
or another have been able to bring about significant social change and progress,
3. What is the relationship between selfishness and self-interest? Is there a
meaningful difference between the two? What is the relationship between self-
interest and social welfare? Can it be in my self-interest to pay higher taxes?
The sidebar in this chapter explores this distinction in detail. In short, there are two
actual self-interest.
4. Is a tobacco firm that employs thousands of people and pays high taxes better or
worse than a supermarket that sells food but pays its employees low wages?
An answer to this question should be consistent with the answer provided to Question
1. Whichever hypothetical firm the student supports, it is important to recognize that
5. Have a look at the following certification logos. Do you recognize any of them?
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Do you know what they measure? If you wanted to buy a product and one brand
had one of these logos attached and another didn’t, would it affect your
purchase decision?
This question raises the potential for an interesting debate among students as to the
value of various certifications. Like brands, certifications should communicate an