BusinessEthicsandSocialResponsibilityVicSaunders1WhatareStakeholders?Stakeholdersarethoseindividualsorgroupswhodependonanorganisationtofulfiltheirowngoalsandonwhom,inturn,theorganisationdepends(Johnsonetal2011).2StakeholdersofaLargeOrganisation3StakeholderExpectations•Decisionstakenbymanagersareinfluencedbystakeholders(CIM2010).•Thisposesachallengeastherearemanydifferentstakeholderswithdifferent,perhapsconflicting,expectations.•Managerswillneedtotakeaviewon:i.Whichstakeholdershavethegreatestinfluence.ii.Whatstakeholderexpectationsdomanagersneedtopaymostattentionto.iii.Towhatextenttheinfluenceandexpectationsofdifferentstakeholdersvary.4Ethics•Ethicsisabranchofphilosophythatdealswithwhatisconsideredtoberightorwrong.•Businessethicsaddresseswhatcanberegardedasmorallyrightandwronginthewaybusinessesmakedecisionsandconducttheiractivities(CraneandMatten2007).5HowDoesBusinessEthicsRelatetoCorporateSocialResponsibility(CSR)?•Anorganisation'scoreethicalvaluesandstandardsshouldunderpineverythingthatitdoesandthewayitsemployeesconducttheireverydaybusiness.•Businessethicsisaboutdoingthingsethically.Howanorganisationapproachesthesocialandenvironmentalimpactsofitsbusinessoperationsanditsvoluntarycontributiontothewellbeingoftheglobalandlocalcommunitiesinwhichitoperates,isoftenknownasCorporateSocialResponsibility(CSR);itisoftenaboutdoingethicalthings.•Cananorganisationberesponsiblewithoutaculturethatisbasedonethicalvaluessuchastrust,openness,respectandintegrity?6WhatisCorporateSocialResponsibility?Corporatesocialresponsibility(CSR)isconcernedwiththewaysinwhichanorganisationexceedsitsminimumobligationstostakeholdersspecifiedthroughregulation(Johnsonetal2011).7WhatisCSR?•TheentiretyofCSRcanbediscernedfromthethreewordscontainedwithinitstitlephrase:‘corporate,’‘social,’and‘responsibility.’•CSRcoverstheresponsibilitiescorporations(orotherfor-profitorganisations)havetothesocietieswithinwhichtheyarebasedandoperate.•Morespecifically,CSRinvolvesabusinessidentifyingitsstakeholdergroupsandincorporatingtheirneedsandvalueswithinthestrategicandday-to-daydecision-makingprocess.•Abusiness’‘society’withinwhichitoperates,definesthenumberofstakeholderstowhichtheorganisationhasa‘responsibility,’maybebroadornarrowdependingontheindustryinwhichthefirmoperatesanditsperspective.8WhatBusinessAreasDoesCSRCover?•Ethics-discretionaryactions.•Strategicbrandmanagement-Brandbuilding,Brandinsurance.’•Stakeholderrelations-Internal(employees)-External(suppliers,distributors,investors,NGOs,government,media,consumers).•Crisismanagement.•Communityengagement.•CommunityRelations.•Day-to-dayoperations-Environmentalsustainability,Workplaceissues.•Moralrighteousness.•ExternalPR/ad-Meetconsumerexpectations,Cause-relatedmarketing.•Corporategovernance–transparency,socialaudits•SRI(SustainableandResponsibleInvestment).•Diversity.•Legislationandlitigation.•Culturalconflict.9WhyisCSRrelevant?•Whilstitaddressestheexpectationsofcustomersandshareholders/ownersitalsoaddressestheexpectationsoftheotherstakeholders:–Societyatlarge.–Community.–Theenvironment.–Interestgroups.10KeyDriversinCSR•Environmentalconcerns.•GlobalisationandconcernsforsustainabledevelopmentinLDCs.•Importanceofglobalbrandsandcorporatereputations.11KeyDriversinCSR•Changingsocialexpectations-Consumersandsocietyingeneralexpectmorefromthecompanieswhoseproductstheybuy.Thissensehasincreasedinthelightofrecentcorporatescandals,whichreducedpublictrustofcorporations,andreducedpublicconfidenceintheabilityofregulatorybodiesandorganisationstocontrolcorporateexcess.•Increasingaffluence-Thisistruewithindevelopednations,butalsoincomparisontodevelopingnations.Affluentconsumerscanaffordtopickandchoosetheproductstheybuy.Asocietyinneedofworkandinwardinvestmentislesslikelytoenforcestrictregulationsandpenaliseorganisationsthatmighttaketheirbusinessandmoneyelsewhere.•Globalisation-Thegrowinginfluenceofthemediaseesany‘mistakes’bycompaniesbroughtimmediatelytotheattentionofthepublic.Inaddition,theInternetfuelscommunicationamonglike-mindedgroupsandconsumers—empoweringthemtospreadtheirmessage,whilegivingthemthemeanstoco-ordinatecollectiveaction(i.e.aproductboycott).12WhyisCSRImportant?•CSRisanimportantbusinessstrategybecause,whereverpossible,consumerswanttobuyproductsfromcompaniestheytrust;supplierswanttoformbusinesspartnershipswithcompaniestheycanrelyon;employeeswanttoworkforcompaniestheyrespect;andNGO’s,increasingly,wanttoworktogetherwithcompaniesseekingfeasiblesolutionsandinnovationsinareasofcommonconcern.•“The21stcenturywillbethecenturyofthesocialsectororganisation.Themoreeconomy,money,andinformationbecomeglobal,themorecommunitywillmatter.”PeterF.Drucker,FounderoftheDruckerFoundation13KeyIssueisSustainability•Sustainabilityissues–forthebenefitoftheglobalenvironmentandsociety(andsoorganisationalreputation).•Sustainabilityissues–forthesurvivaloftheorganisation.14KeyIssuesinSustainability•Populationpressure.•Productionandconsumption.•Globalisation.•Globalwarmingandclimatechange.•Ozonedepletion.•Acidrain.•Geneticengineering.•Lossofhabits