1.3.6

Corporate Social Responsibility

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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

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.
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1

Exploring Business

1.1

Features of Business Organisations

1.1.1Sole Traders & Partnerships1.1.2Private & Public Limited Companies1.1.3Types of Liability & Not-For-Profits1.1.4Purposes of Businesses1.1.5Purposes of Businesses 21.1.6The Different Economic Sectors1.1.7Multinational Companies1.1.8Stakeholders1.1.9Influence of Stakeholders
1.2

Organisation of Businesses

1.2.1Organisational Structure1.2.2Types of Organisational Structures1.2.3Business Aims & Objectives1.2.4Business Aims1.2.5Business Objectives
1.3

Business Environment

1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2

Marketing Campaigns

2.1

Marketing

2.1.1Setting Marketing Objectives2.1.2Customer Needs2.1.3The Market2.1.4Competition & The Market2.1.5Consumer Behaviour2.1.6Market Research2.1.7Forms of Market Research2.1.8Market Segmentation2.1.9Cultural & Social Factors in Marketing2.1.10Promotional Decisions 32.1.11Pricing Strategies
2.2

Marketing Mix

2.2.1Marketing Mix2.2.2Product Life Cycle2.2.3Pricing Decisions & Price Skimming2.2.4Pricing Decisions & Price Penetration2.2.5Promotional Decisions2.2.6Promotional Decisions 22.2.7Promotional Decisions 32.2.8Market Mapping
3

Business Finance

3.1

Sources of Finance

3.1.1Internal Finance3.1.2External Finance3.1.3External Finance 23.1.4Sources of Business Finance
3.2

Financial Planning

3.2.1Revenue3.2.2Costs3.2.3Cash & Cash Flow3.2.4Cash & Cash Flow 23.2.5Break-Even Analysis3.2.6Profits
3.3

Financial Statements

3.3.1Balance Sheets3.3.2Income Statements3.3.3Liquidity
4

International Business

4.1

Globalisation

4.1.1Growing Economies4.1.2Specialisation & Trade
4.2

International Business

4.2.1Internationalisation4.2.2International Trade4.2.3MNCS4.2.4Conditions that Prompt Trade4.2.5Assessment of a Country
4.3

International Economic Environment

4.3.1Globalisation4.3.2Factors Contributing to Globalisation4.3.3Protectionism4.3.4The EU & the WTO4.3.5Trading Blocs
4.4

Factors Affecting International Business

4.4.1Global Competitiveness4.4.2Ethics of Global Business4.4.3Controlling MNCs4.4.4Cultural & Social Factors in Marketing
5

Principles of Management

5.1

Management & Leadership

5.1.1Managers5.1.2Management Theories5.1.3Managing Organisational Culture5.1.4Management Style
5.2

Theories of Motivation

5.2.1Motivating & Engaging Employees5.2.2Taylor's Theory5.2.3Mayo's Theory5.2.4Maslow's Theory5.2.5Herzberg's Theory
5.3

Managing Change

5.3.1Change5.3.2Key Factors in Change5.3.3Scenario Planning5.3.4Managing Change5.3.5Managing Strategic Implementation
6

Business Decision Making

6.1

Business Principles & Practices

6.1.1Influences in External Environments6.1.2Product Decisions6.1.3Competitive Environment6.1.4Corporate Strategy6.1.5Quantitative Sales Forecasting6.1.6Legislation
6.2

Quality Management

6.2.1Importance of Quality6.2.2Measuring Quality6.2.3Total Quality Management6.2.4Evaluating TQM
6.3

Human Resources

6.3.1Contracts6.3.2Recruitment6.3.3Training a Workforce
6.4

Documents & Business Decisions

6.4.1Sales Forecasts6.4.2Managing Strategic Implementation6.4.3Problems with Strategy

Practice questions on Corporate Social Responsibility

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    Factors which contribute to social responsibility:Fill in the list
  2. 2
    What is the foundation of Carroll's corporate social responsibility?Multiple choice
  3. 3
    Which of the following are businesses forced to do under the law?Multiple choice
  4. 4
    Which of the following decisions is an example of a business fulfilling additional ethical responsibilities?Multiple choice
  5. 5
    If a business supports charitable events in the community, which social responsibility is it fulfilling?Multiple choice
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Lifestyle & Technological Environment

The Competitive Environment