Prefinals 1

Code of Ethics

It supports human rights, labor rights, and the environment but wants such pursuits to occur within a free and stable market economy.

CSR (EU Commission 2002)

It is a concept whereby companies integrate social and environmental concerns into their business operations and voluntarily interact with the stakeholders.

Corporate Social Responsibility

It is the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Industrial Revolution

The era where evidence of business’ concern for society can be traced back to practices.

In the mid-to-late 1800s

There was a growing concern about worker well-being and productivity among industrialists.

United States

This brought to light the growing criticisms of the emerging factory system, working conditions, and women and children’s employment.

Combination of humanitarianism and business acumen

Industrial betterment and welfare movements were viewed as these.

Rise of Philanthropy

This makes an appearance in the late 1800s.

Industrialists Andrew Carnegie

He made most of his fortune in the steel industry.

Was known for donating large portions of his wealth to education and scientific research.

John D. Rockefeller (oil industry)

He donated more than half billion dollars to religious, educational, and scientific causes.

1953

Year when CSR was officially coined.

Howard Bowen

He coined the term “CSR" in his publication Social Responsibilities of the Businessman.

He is often referred to as the "father of CSR”.

1970s

Year when CSR began to take flight in the United States.

1971

Year when the concept of the “social contract” between businesses and society was introduced.

Committee for Economic Development

This introduced the concept of “Social contract".

Social Contract

This brought forward the idea that companies function and exist because of public consent; there is an obligation to contribute to society’s needs.

1980s

Year when early CSR continued to evolve as more organizations began incorporating social interests in their business practices while becoming more responsive to stakeholders.

1990s

This marked the beginning of widespread approval of CSR.

1991

Year when Corporate Social Performance Revisited was established.

Donna J. Wood

She is a professor from the University of Pittsburgh who published Corporate Social Performance Revisited.

Corporate Social Performance Revisited

This expanded and improved early CSR models by providing framework for assessing CSR programs’ impacts and outcomes.

The Pyramid of Corporate Social Responsibility

An article published by Carroll where he expanded on areas he believed were crucial when implementing CAR in an organization.

Archie B. Carroll

A business management author and professor at the University of Georgia where he published his article, “The Pyramid of CSR" in 1991.

Early 2000s

CSR had become an essential strategy for many organizations, with multi-million dollar companies, such as Wells Fargo, Coca-Cola, Walt Disney, and Pfizer.

Phase 1: Profit Maximization Management

Phase 2: Trusteeship Management

Phase 3: Quality of Life Management

Historical phases of CSR

Business systems as profit maximizers

These are used as a tool for then elimination of economic scarcity.

Phase 1: Profit Maximizing Management

Historical phase of CSR which started from the 1800s to early 1900s.

Phase 2: Trusteeship Management

Historical phase of CSR which started from the early 1900s.

Phase 3: Quality of Life Management

Historical phase of CSR which started from the 1930s.

Prosperous Society

It is the best environment for a business to thrive.

Classical view

Managerial view

Public view

Religious view

Perspectives on CSR

Classical View

The primary responsibility of a business is profit maximization.

Management must satisfy stockholders for their investments.

Supported by Milton Friedman.

Milton Friedman

One of the most influential advocates of economic freedom and free enterprise.

Managerial View

Doers do not emphasize the profit maximization and interests of stockholders.

Balancing employees, customers, suppliers, and the local plant community is a prominent business manager role.

Public View

Includes the needs and interests of the whole society in contrast with classical and managerial views.

Establishes harmony with both businesses operations and public interest.

Religious View

Excess wealth should be given to the less fortunate. Wealthy individuals have a responsibility to share their blessings with the poor.

A successful corporation should perform its social responsibility more by returning abfair portion of its profits to the people in social services.

Based on the teachings of Jesus Christ as taught in the bible.

Carroll’s CSR Pyramid

A framework that explains how and why organizations should take social responsibility.

Economic responsibility

Producing goods and services that society need and making a profit.

Legal responsibility

Comply with the minimum rules that have been set.

Basic rules

It consists of laws and regulations that represent society's views of codified ethics.

They determine how organizations can legally conduct business practices, as defined by legislators on national, regional, and local levels.

Ethical responsibility

It means that organizations embrace activities, standards, and practices have not necessarily been written down but are still expected.

Philanthropic responsibility

This includes voluntary or discretionary activities and practices.

Philanthropy

It is not a literal responsibility, but society expects firms to participate in such a activities.

Consumers, Employees, and Investors

Key drivers of business case.

Consumers

They are considered as the most critical stakeholders of business besides their employees.

Socially responsible business

A common term today as businesses and societies are unthinkable without each other.