1.3.6
Corporate Social Responsibility
Corporate Social Responsibility
Corporate Social Responsibility
Corporate social responsibility, known as CSR, is a term used to describe an approach whereby businesses seek to exceed basic legal requirements by considering their impact on society.
Satisfying employees
Satisfying employees
- Businesses focussing on their social responsibilities may seek to satisfy their employees by offering job security, safe working conditions and fair wages.
Satisfying customers
Satisfying customers
- Businesses focussing on their social responsibilities may seek to satisfy customers by offering reliable products, fairly priced, which exceed legal safety requirements.
Satisfying shareholders
Satisfying shareholders
- Businesses focussing on their social responsibilities may seek to satisfy shareholders by increasing share price and through payment of stable and regular dividends.
Satisfying suppliers
Satisfying suppliers
- Businesses focussing on their social responsibilities may seek to satisfy suppliers through paying fair prices, making regular on-time payments and offering exclusivity.
Satisfying the community
Satisfying the community
- Businesses focussing on their social responsibilities may seek to satisfy the community by offering employment and funding restoration projects and community facilities.
- For example, XEROX offers several initiatives to support local communities including the Green World Alliance, the Electronic Industry Citizen Coalition and the XEROX Community Involvement Program. These commitments to social responsibility indicate the value XEROX places on social responsibility above and beyond its pursuit of profit and its obligation to meet basic legal requirements.
Advantages and disadvantages of corporate social responsibility
Advantages and disadvantages of corporate social responsibility
- CSR can increase a business’ costs through paying for initiatives, offering employees fair wages and agreeing to pay suppliers fair prices.
- CSR, though initially increases costs, can attract customers to the business and increase market share and sales revenue in the long-term.
Carroll's Corporate Social Responsibility Pyramid
Carroll's Corporate Social Responsibility Pyramid
To support businesses wishing to fulfil their social responsibilities, Carroll’s Corporate Social Responsibility pyramid can be used by managers and leaders.
First and second responsibilities
First and second responsibilities
- The first responsibility a business should fulfil is its economic responsibility; being profitable is the foundation of the hierarchy and allows the business to move through additional responsibilities.
- The second responsibility a business should fulfil is its legal responsibilities, for example, paying employees the national minimum wage.
Third and fourth responsibilities
Third and fourth responsibilities
- The third responsibility a business should fulfil is its ethical responsibilities; ethical responsibilities see a business making moral decisions such as, for example, agreeing to pay employees more than the legal requirement in order to support their standard of living.
- The final responsibility a business should fulfil is its philanthropic responsibilities; here the business supports society and the community through, for example, supporting charitable events and sponsoring public facilities.
The shareholder concept
The shareholder concept
- The shareholder concept states that businesses have a responsibility only to raise value for shareholders through increasing share prices and paying dividends and that profit maximisation is the only focus of the business.
The stakeholder concept
The stakeholder concept
- The stakeholder concept states that as well as satisfying shareholders’ needs, the business must place equal emphasis on satisfying the needs of all other stakeholders, including employees, customers and suppliers.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
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