Management Chapter 3 Homework Page Corporate Social Responsibility And Citizenship Introduction The Idea That Businesses

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CHAPTER 3

CORPORATE SOCIAL RESPONSIBILITY AND

CITIZENSHIP

INTRODUCTION

The idea that businesses bear broad responsibilities to society as they pursue economic

goals is an age-old belief. Both market and nonmarket stakeholders expect businesses to

act responsibly, and many companies have responded by making social goals a part of

their overall business operations and adopting the goal of being a good corporate citizen.

PREVIEW CASES

Starbucks Helps Coffee Farmers

Toyota’s Ideas for Good Partners with Carnegie Mellon University’s CREATE Lab

Are the efforts described above examples of social responsibility and citizenship

practiced by a corporation and social entrepreneurs? Do they represent a successful

merger of social and economic objectives, or should these programs be questioned as

inappropriate uses of business assets—finances, personnel, and products? How far should

an organization or entrepreneur go to help those in society in need of their support? How

much is too much?

CHAPTER OUTLINE

I. CORPORATE POWER AND RESPONSIBILITY

Teaching Tip: Socially Responsible Companies

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II. CORPORATE SOCIAL RESPONSIBILITY AND CITIZENSHIP

A. The Origins of Corporate Social Responsibility

B. Balancing Social, Economic, and Legal Responsibilities

III. THE CORPORATE SOCIAL RESPONSIBILITY QUESTION

A. In Support of Corporate Social Responsibility

 Balances corporate power with responsibility

 Discourages government regulation

Teaching Tip: Iron Law of Responsibility

Students could look through local or national business periodicals or

the long term because they have used their power for social good?

Teaching Tip: Corporate Social Responsibility and Citizenship

The CEO at UBS sees it “as a duty to understand the scope and scale of

societal challenges.” Do other executives share this vision or are they

opposed to this view?

Teaching Tip: The CSR Question

Students could be divided into teams and assigned one side of the CSR

question or be in support of or have concerns about each issue in the

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 Promotes long-term profits for business

 Improves stakeholder relationships

 Enhances business reputation

B. Concerns About Corporate Social Responsibility

 Lowers economic efficiency and profits

 Imposes unequal costs among competitors

 Imposes hidden costs passed on to stakeholders

 Requires skills business may lack

 Places responsibility on business rather than individuals

IV. SOCIAL ENTREPRENEURS AND B CORPORATIONS

V. MANAGEMENT SYSTEMS FOR CORPORATE SOCIAL

Teaching Tip: Introducing the B Corporation

The B Corporation is intended to be somewhat controversial given the

newness of this phenomenon and the few organizations that have

received this certification. It is an effort to provide some sort of license

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VI. STAGES OF CORPORATE CITIZENSHIP

A. Elementary Stage

B. Engaged Stage

C. Innovative Stage

D. Integrated Stage

E. Transforming Stage

VII. ASSESSING AND REPORTING SOCIAL PERFORMANCE

A. Social Audit Standards

Teaching Tip: Corporate Social Responsibility and Citizenship

Professional Associations

Groups of students could be assigned each of the associations listed in

Exhibit 3.A and compare how each association serves the interests of

Teaching Tip: Corporate and Individual Philanthropy

The Boston College Center’s stage model, Figure 3.5, provides an

array of possible assignments for students to explore firm’s corporate

citizenship activities. It might be interesting for students to identify

Teaching Tip: Corporate Social Audits

Locate, using the Internet, examples of firms that conduct social audits.

Assess their audit evaluations. Do they consider the “right elements”

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B. Social Reporting

GETTING STARTED

KEY LEARNING OBJECTIVES

LO 3-1: Understanding the role of big business and the responsible use of corporate

power in a democratic society.

LO 3-2: Knowing when the idea of social responsibility originated and investigating

how a company’s purpose or mission can integrate social objectives with

economic and legal objectives.

LO 3-3: Examining the key arguments in support of and concerns about corporate

social responsibility.

Corporate social responsibility is a controversial notion. Some argue that its benefits

Teaching Tip: Global Reporting Initiatives

Students may also want to explore the Global Reporting Initiatives at

GRI provide to firms?

Teaching Tip: Social Reporting

Social reports are easily available in most global corporation’s

websites. Students could compare and contrast reports, determine the

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LO 3-4: Defining global corporate citizenship and recognizing the rapidly evolving

management practices to support global citizenship.

LO 3-5: Examining businesses with an explicitly social mission, such as social

ventures and B corporations.

LO 3-6: Distinguishing among the sequential stages of global corporate citizenship.

Companies progress through five distinct stages as they develop as global corporate

LO 3-7: Understanding how businesses assess and report their social performance.

Many companies have created systemic audits of their social, ethical, and

KEY TERMS

B Corporation

corporate citizenship

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integrated reporting

iron law of responsibility

reputation

social audit

social entrepreneurs

www.unicef.org/csr UNICEF and Corporate Social Responsibility

www.globalreporting.org Global Reporting Initiative

www.unglobalcompact.org United Nations Global Compact

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DISCUSSION CASE

CORPORATE SOCIAL RESPONSIBILITY AT GRAVITY

PAYMENTS

Discussion Questions

1. Is Price demonstrating elements of corporate social responsibility by his actions

in this case, or not?

Although this is a subjective question, the chapter provides a number of tools to

assess Price’s actions in terms of corporate social responsibility:

• Is Price using his corporate power as a CEO appropriately?

• Is he demonstrating the notion of the Iron Law of Responsibility?

• Is he embracing the responsibility notion of “giving back” to his employees?

2. How is Price exhibiting the fourth Phase of Corporate Citizenship (Figure 3.2,

1990s to present: Corporate/Global Citizenship) in his actions at Gravity

Payments??

Teaching Tip: Gravity Payments

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3. What arguments in support of, or concerns about, corporate social responsibility

(referring to Figure 3.3) are relevant to this case?

4. Is Price acting like an executive of a firm that could be certified as a B

corporation?

5. What stage of global corporate citizenship (using Figure 3.5) is Gravity

Payments operating at, and why do you think so?

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