L9 - CSR Overview

What is Corporate Social Responsibility (CSR)?

It is the concept that businesses have social and environmental responsibilities similar to those of individuals.

Example: A company implementing sustainable practices to reduce its carbon footprint.

Why is there ambiguity around the term "CSR"?

It can refer both to the study of business responsibilities and to practical efforts by businesses to act responsibly.

Example: Studying stakeholder theory vs. a company launching a recycling program.

In what ways is a business similar to a human being?

Can own property (buy and sell).

Can enter into agreements (contracts).

Is legally considered a "person" (can sue and be sued).

Has a reputation that can be harmed or benefited.

Example: A company being sued for breaching a contract, just like a person.

In what ways are businesses different from human beings?

No physical body.

No subjectivity or personal mind.

No emotions.

Example: A business doesn’t feel guilt when cutting jobs for profitability.

What does it mean for a corporation to be treated as a person legally?

It can hold property, make contracts, and be held legally accountable.

Example: A corporation can be sued for negligence.

Why do some critics view corporations as "psychopaths"?

Because they are structured to maximize profit without moral or social considerations, similar to individuals who lack empathy.

Example: A factory polluting a river because paying fines is cheaper than installing filters.

What does CSR assume about businesses?

That they have ethical responsibilities similar to human beings, including moral duties and social values.

Example: A business actively reducing emissions to meet environmental standards.

How does CSR attempt to compensate for the lack of human-like ethics in businesses?

By implementing structures and processes that encourage responsible actions, like ethical guidelines and sustainability programs.

Example: Codes of conduct to guide employee behavior.

What is the concept of "Moral Minimum" in CSR?

The duty to cause no harm before trying to prevent harm or do good.

Example: Ensuring workplace safety before offering wellness programs.

What is the concept of "Moral Minimum" in CSR?

The duty to cause no harm before trying to prevent harm or do good.
Example: Ensuring workplace safety before offering wellness programs.

What does "Supererogatory" mean in the context of CSR?

Going above what is legally or morally required.
Example: Voluntarily donating to a community project despite not being legally obligated.

Why is compliance with the law often insufficient for CSR?

Legal standards may not fully encompass ethical responsibilities, so CSR requires going beyond mere legal compliance.

Example: Following emission regulations but also investing in renewable energy to reduce carbon footprint.

What is a key criticism of CSR from the shareholder perspective?

CSR might detract from profit maximization, which contradicts the primary goal of business.
Example: A company spending on community welfare instead of increasing dividends.

How do businesses balance profit with social responsibility?

By integrating CSR into core strategies, ensuring actions that benefit both the company and the community.

Example: Eco-friendly packaging that appeals to consumers and reduces waste.

How does CSR change how businesses view their operations?

It encourages them to consider the broader impact on society and the environment rather than just profit.
Example: A company reducing waste to minimize its environmental footprint.

Why is it important for businesses to adopt CSR?

It fosters trust, improves brand reputation, and aligns with consumer expectations for ethical behavior.

Example: Companies that are transparent about sourcing and fair labor practices build consumer loyalty.

How might a business face a dilemma when implementing CSR?

Balancing short-term costs with long-term benefits, like investing in sustainable infrastructure that may not provide immediate profit.
Example: Installing solar panels that reduce energy costs only after several years.

Why might some businesses resist adopting CSR practices?

They might view social responsibility as conflicting with their primary goal of profit maximization.
Example: A mining company avoiding environmental restoration due to high costs.