1.5.3

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.
Jump to other topics
1

Business Organisation & Environment

1.1

Introduction to Business Management

1.1.1Why Businesses Exist & Sectors
1.2

Types of Organisation

1.2.1Sole Traders1.2.2Limited Liability1.2.3Non-Profit1.2.4Franchising1.2.5End of Topic Test - Franchising
1.3

Organisational Objectives

1.3.1External Environments1.3.2Business Mission & Corporate Objective1.3.3Mission, Corporate Objectives & Strategy1.3.4SWOT Analysis1.3.5End of Topic Test - SWOT Analysis
1.4

Stakeholders

1.4.1Stakeholders
1.5

External Environment

1.5.1Social & Technological Environment1.5.2Lifestyle & Technological Environment1.5.3Corporate Social Responsibility1.5.4Economic Environment1.5.5Political & Legal Change
1.6

Growth & Evolution

1.6.1Growth & Retrenchment1.6.2Challenges of Growth1.6.3Growth Models1.6.4End of Topic Test - Diseconomies of Scale1.6.5Internationalisation1.6.6Sourcing Resources & Entering Markets1.6.7End of Topic Test - Internationalisation1.6.8Managing Internationalisation1.6.9Impact of Internationalisation
1.7

HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools
2

Human Resource Management

2.1

Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives2.1.2Human Resource Management2.1.3Labour Turnover & Retention2.1.4Labour Productivity
2.2

Organisational Structure

2.2.1Organisational Structures
2.3

Leadership & Management

2.3.1Managers2.3.2Management Theories2.3.3End of Topic Test - Management
2.4

Motivation

2.4.1Motivating & Engaging Employees2.4.2Taylor's Theory2.4.3Maslow's Theory2.4.4Herzberg's Theory2.4.5Different Incentives2.4.6Evaluating Incentives
2.5

Organisational (Corporate) Culture

2.5.1Managing Organisational Culture2.5.2Organisational Structures
2.6

HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations2.6.2Case Study - The Winter of Discontent
3

Finance & Accounts

3.1

Sources of Finance

3.1.1Internal Sources of Finance3.1.2External Sources of Finance3.1.3Factors for Financing3.1.4End of Topic Test - Debt
3.2

Costs & Revenues

3.2.1Costs & Revenues
3.3

Break-Even Analysis

3.3.1Profit3.3.2Break-Even Analysis
3.4

Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis
3.5

Cash Flow

3.5.1Cash Flow3.5.2Solutions to Cash Flow Problems3.5.3Improving Cash Flow & Profits
3.6

HL Only: Investment Appraisal

3.6.1Investment Appraisal
3.7

HL Only: Budgets

3.7.1Cash-Flow & Budgets
4

Marketing

4.1

The Role of Marketing

4.1.1Setting Marketing Objectives4.1.2Market Calculations
4.2

Marketing Planning

4.2.1Marketing Mix4.2.2Segmentation4.2.3Niche & Mass Markets
4.3

Market Research

4.3.1Market Research4.3.2Market Mapping4.3.3Methods of Market Research
4.4

The 4 Ps

4.4.1Product Decisions4.4.2Pricing Decisions & Price Skimming4.4.3Pricing Decisions & Price Penetration4.4.4End of Topic Test - Pricing & Competition4.4.5Promotional Decisions4.4.6Promotional Decisions 24.4.7Promotional Decisions 34.4.8Digital Marketing4.4.9Evaluating Digital Marketing4.4.10Case Study - The Marketing Mix & Promotion4.4.11Place & Distribution
4.5

HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix
4.6

HL Only: International Marketing

4.6.1International Marketing
4.7

E-Commerce

4.7.1E-Commerce
5

Operations Management

5.1

The Role of Operations Management

5.1.1Setting Operational Objectives
5.2

Production Methods

5.2.1Production Processes Overview5.2.2Production Processes5.2.3Production Efficiency5.2.4Technology & Production
5.3

HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality5.3.2Measuring & Identifying Quality5.3.3Total Quality Management5.3.4Evaluating Total Quality Management5.3.5Case Study - Toyota Production System
5.4

HL Only: Production Planning

5.4.1Capacity5.4.2Productivity & Efficiency5.4.3Technology & Efficiency5.4.4Improving the Supply Chain5.4.5Inventory5.4.6Outsourcing
5.5

HL Only: Research & Development

5.5.1Organisational Planning Tools

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

Economic Environment