CSR Exam 1 Pt 2

Is there a true definition as to what CSR really is?

No, there is no single, universally accepted definition of CSR. It is an overused term that generally refers to how corporations balance their own competitive interests with responsibilities to society. 

What is the main premise of CSR?

The premise is that businesses have obligations beyond making profit. CSR emphasizes that firms should consider the effects of their operations on stakeholders, communities, and the environment. 

Historically (and at the beginning of the CSR debate), what was the main focus of CSR and who were the typical targets?

CSR initially focused on corporate misdeeds and “bad actors” like oil and gas, cruise lines, and cigarette companies. These industries were targeted because of environmental harm, worker exploitation, or public health issues. 

What is the history of CSR in terms of its growth post-WWII?

Post WWII, Corporations grew larger and management became separate from ownership. By the 1950s, firms grew drastically in size and influence. By 2000, of the 100 largest economic organizations, 51 were corporations and 49 were entire countries. CSR grew as concerns about corporate power and scandals increased. 

What are the main areas of emphasis as to what CSR might be despite to clear definition?

Despite differences, all definitions share themes such as: voluntary actions beyond laws, responsibility to multiple stakeholders, integration of environmental, societal, and economic concerns, transparency and accountability, and balancing profit with social good. 

What is Environmental Sustainability?

It is the ability of a society or company to operate without compromising the planet’s long term health. A sustainable corporation can continue its activities without worsening environmental problems.

Does CSR = Sustainability?

No, sustainability is a subset of CSR focused on environmental impacts. CSR is broader, including ethics, labor relations, and community engagement. They are related but not identical.

What is a Stakeholder?

A stakeholder is any person or group that affects or is affected by a company’s decisions, policies, or operations.

Does a stakeholder need to have a relationship to the firm? How do risks/rewards factor in?

Yes, stakeholders share in both risks and rewards of a firm’s activities. Some interact directly (employees, customers), others indirectly (communities, NGOs). All can be affected.

What are the two main types of stakeholders?

Market stakeholders which are stakeholders engaging in economic transactions with the firm (employees, suppliers, customers). And Non-Market Shareholders who are those who do not transact directly but are affected by or can affect the firm (governments, NGOs, communities).

What is stakeholder interest? EXPLAIN

It is the nature of each group’s stake, their concerns, what they want, and what they seek from their relationship with the firm. 

What is stakeholder power? EXPLAIN

It is the ability of stakeholders to influence outcomes using resources like money, votes, information, or regulation.

What are the 5 types of stakeholder power?

1. Voting Power

2. Economic Power

3. Political Power

4. Legal Power

5. Information Power

What is a high quality managerial decision in a CSR model?

One that considers the effects of the firm’s decisions on stakeholders and the effects of stakeholders’ decisions on the firm. This creates mutual value

What is a low quality managerial decision in a CSR model?

One that ignores or mistreats stakeholders, turning relationships into liabilities and destroying value.

The “Corporate” in CSR is not always corporate. What does this mean?

CSR responsibilities also apply to NGOs, CSOs, and public organizations (e.g., Greenpeace, UN). They must also show accountability and act like responsible “corporate” citizens

What are the 6 Core Characteristics of a good CSR model/Plan?

1. Voluntary – goes beyond legal requirements.

2. Managing externalities – addresses costs/benefits not captured in prices (pollution, human rights).

3. Multiple stakeholder orientation – considers diverse groups beyond shareholders.

4. Social and economic alignment – links responsibility with profitability (“enlightened self-interest”).

5. Practices and values – builds CSR into organizational culture and values.

6. Beyond philanthropy – integrates CSR into operations, not just donations.

What are the 3 sectors of CSR?

1. Private sector: Large firms → formal CSR with policies, codes, managers. Small firms → informal CSR, focused on relationships/trust.

2. Public sector: Governments provide goods/services and face CSR expectations (environmental stewardship, equal opportunities).

3. Civil Society Organizations (CSOs): Non-profits/NGOs with social goals. Traditionally watchdogs, now also partners with corporations. Today, CSOs must be accountable for their own CSR. “CSOs in name only” are those that lack true commitment

What is CSR Formality, Main Actors, and Aims in Large Firms?

CSR Formality: Very formal and structured. They have policies, codes of conduct, CSR reports, dedicated CSR managers/departments.

Main Actors: Shareholders, external stakeholders (watchdogs, NGOs, regulators).

CSR Aims: Build brand image, manage legitimacy, influence regulation, protect profitability. It’s about public perception and staying compliant because they’re very visible.

What is CSR Formality, Main Actors, and Aims in Small Firms?

CSR Formality: Informal, not always written down or publicly shared. Less visible to the public.

Main Actors: Owner-managers themselves. They personally handle relationships with employees, suppliers, customers, and communities.

CSR Aims: Build trust, relationships, and community goodwill. Not always profit-driven; more about sustaining local reputation and personal values.

Voting Power

Shareholders elect board members

Economic Power

Customers buy or boycott; suppliers control contracts.

Political Power

Governments regulate firms

Legal Power

Courts enforce laws or allow lawsuits

Information Power

NGOs/media shape public opinion

Who are the stakeholders, what do they want, what is their power?

1. Employees: Want fair pay and safe conditions; power via strikes/unions.

2. Communities: Want jobs and stewardship; power via boycotts or lobbying.

3. Governments: Want development and taxes; power via regulation.

4. Customers: Want safe products and value; power via boycotts and social media.

5. Suppliers: Want payment and stable demand; power via contract withdrawal.

6. NGOs: Want ethical behavior; power via public campaigns

How have CSOs evolved over time?

They moved from being primarily watchdogs/critics of corporate behavior to also partnering with businesses to raise standards (e.g., certification schemes, joint initiatives like WWF–Unilever on sustainable fishing). They now face expectations to demonstrate responsibility themselves.

What does it mean for CSOs to now be held accountable for their own CSR policies?

As CSOs push firms to act responsibly, stakeholders expect CSOs to “practice what they preach”—ethical operations, fair employment, transparent funding, and accountable governance—essentially applying CSR expectations to CSOs too.

What does it mean for a CSO to be questionable by being a CSO “in name only”?

It refers to groups that use the CSO label without genuinely serving a public/social mission—lacking transparency, accountability, or authentic social goals; sometimes acting as fronts for other interests.

What are CSOs?

Non-government, mission-driven organizations (e.g., NGOs, nonprofits) that pursue social goals such as environmental protection, labor conditions, and human rights, and interact with firms as watchdogs, partners, or both.

Where did the modern CSR idea originate and why?

CSR originated in the United States because there was less government regulation, a smaller welfare system, and focus on personal freedom. As companies grew after WW2, people expected them to give back in education, healthcare, community, and philanthropy.