Seminar in Business Ethics and

Social Responsibility

SMT 940

Abeer Youssef
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 Overview
• Corporate Social Responsibility (CSR).
• Types of social responsibility.
• CSR aims.
• Benefits of CSR.

• Corporate Social Responsibility theories

➢ Friedman’s Traditional View of Business Responsibility,
➢ Ackerman model,
➢ Carroll’s Pyramid of CSR, and
➢ Creating Shared Value (CSV)- Mark Kramer and
Michael Porter.
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• Why do firms engage in CSR?

• Examples of CSR.

• Dimensions of CSR:
➢ Environmental dimensions of CSR and operations
strategy.
➢ Social dimensions of CSR and operations strategy.
➢ Economic dimensions of CSR and operations strategy.
➢ Stakeholder dimensions of CSR and operations
strategy.
➢ Voluntary dimension of CSR and operations strategy.
➢ Corporate philanthropy.
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• Case study- Leaking waste containers.

• Green practice in service and manufacturing sector.

• Operational trends for ethical organisational and strategic

practices.

• The organisation's external environment

✓ Economic factors,
✓ Socio-cultural factors,
✓ Technological factors,
✓ Ecological factors, and
✓ Legal factors. 4
Corporate Social Responsibility (CSR)
• The increasingly unethical conduct that was found by
corporations during the 1960s has created the need for
solutions.

• To counter this, corporations developed social responsibility

programs which included charitable donations and funding
local community projects.

• It is an ethical business approach that contributes to

sustainable development by delivering economic, social and
environmental benefits for all stakeholders.

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• CSR is about how business takes account of its economic, social
and environmental impacts in the way it operates maximising the
benefits and minimising the downsides.

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 Famous definitions
• Canadian Government: “CSR is
generally understood to be the
way a company achieves a
balance or integration of
economic, environmental and
social imperatives while at the
same time addressing shareholder
and stakeholder expectations.”
• European Union: “CSR is a concept whereby companies integrate
social and environmental concerns in their business operations and
in their interaction with their stakeholders on a voluntary basis.”

• Common Understanding: CSR is an idea whereby companies

integrate economic, social, and environmental concerns into their
business operations.
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• CSR defines the “good” and the “bad” in business and society
relationships and the obligation of the organisation to act in
ways that serve the interests of multiple stakeholders,
including overall society.

Notice:
- Social responsibility is the general way of a person being
responsible for the societal and environmental benefit.
- CSR concerns obligation of business companies to ensure their
business benefit to the society as well as the environment.
- It is a continuous commitment by businesses to behave
ethically and contribute to economic development while
improving the quality of life of the workplace, local
community, and society at large.

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 Types of social responsibility

• Responsibility towards society,

• Responsibility towards government,
• Responsibility towards shareholders,
• Responsibility towards employees, and
• Responsibility towards customers.

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Responsibility towards society

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 Responsibility towards government

• Obey rules and regulations.

• Regular payment of taxes.
• Cooperating with the government to promote social
values.
• Not to take advantage of loopholes in business laws.
• Cooperating with the government for economic
growth and development.

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Responsibility towards shareholders

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Responsibility towards employees

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Responsibility towards customers

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 CSR aims
• CSR is a reflection of a company’s environmental and
social performance over the last 12 months has
businesses being compliant with the law have reached
their committed targets.

• CSR is looking past performance.

• CSR aims to transparently communicate their

performance to their external audiences like pressure
groups, politicians, and charities.
• CSR is a trusted reputation of a brand.

• It has environmental aims and covers social and

community activities.

• It works on the sustainable development and ethical

issues.

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 Benefits of CSR

Four major benefits of

CSR:
• Increased employee
satisfaction,
• Improve public
image,
• Increase customer
loyalty, and
• Increase creativity.

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Corporate Social Responsibility theories

1) Friedman’s traditional view of business

responsibility,
2) Ackerman model,
3) Carroll’s pyramid of CSR,
4) Creating Shared Value (CSV)- Mark Kramer
and Michael Porter.

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 Friedman’s traditional view of business
responsibility

• Friedman introduced the shareholder theory or

stockholder theory in a 1970 essay for The New York
Times.
• He stated that “The social responsibility of business is
to increase its profits”, “greed is good”.
• The company has no social responsibility to the
public or society and its only responsibility is to its
shareholders.

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 Ackerman model
In 1976, Ackerman model has emphasised on the internal
policy goals and their relation to the CSR.

Four phases are involved in CSR:

• Managers should know the most common social problems
and then express their will to lead a project that could solve
these problems.
• These problems should be intensively studied by experts
and get their suggestions to fix them.
• Managers work hard to apply these projects and
suggestions.
• Evaluate the projects by addressing the issues. 20
 Carroll’s pyramid of CSR
(Strategic philanthropy)
• Carroll’s four responsibilities of business is also called
Carroll’s pyramid of CSR.
• The pyramid was developed by Archie Carroll in 1991,
and highlights the four main responsibilities of the
organisation:
❑ Economic
❑ Legal
❑ Ethical
❑ Philanthropic
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 Creating Shared Value (CSV)
• In 2011, Michael Porter introduced an idea of Shared Value
Creation, stated that, “The purpose of the corporation must be
redefined as creating shared value, not just profit per se”.
• The shared value view of CSR sees economic progress for a
firm and social progress for society as fundamentally
interconnected.
• Porter and Kramer define shared value as “the policies and
practices that enhance the competitiveness of a company while
simultaneously advancing social and economic conditions in
the communities in which it operates”.
• A review published in 2021 defines the concept as “a strategic
process through which corporations can turn social problems
into business opportunities”.
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26
(Kotler & Lee, 2005) 27
 28
(Kotler & Lee, 2005)
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 Examples of CSR

• Starbucks- CSR video

https://www.youtube.com/watch?v=jYqNx8Abkis&t
=44s

• Nike CSR Video

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 Examples of CSR in different industries

• Provide clean, safe water • Implementing a social

to communities responsibile hiring practice
• Hiring more veterans, young
people and refugees

• Focus on corporate citizenship with reflection on

healthcare initiatives
• Spreading awareness about non-infectious disease
• Providing accessible health care services to women
and children in need.
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Dimensions of CSR

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Environmental dimensions of CSR
and operations strategy

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 Social dimensions of CSR and
operations strategy
Deals with human aspects of operations behaviour.

Employment and the gig economy

Globalisation

Ethical Globalisation
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Social considerations of CSR
and operations strategy

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 Economic dimensions of CSR
and operations strategy

• Input costs

• Transformation / processing costs

• Output costs

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Stakeholder dimensions of CSR
and operations strategy

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 Voluntary dimension of CSR
and operations strategy

• Corporate philanthropy

• Strategic philanthropy (Carroll’s Pyramid of

CSR, discussed before).

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Corporate philanthropy

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 Case study- Leaking waste containers

Description
ABC's chemical waste is stored in a warehouse at an off-site
location. While inspecting the warehouse, engineer Scott Lewis
notices several leaking drums.

Abstract
This case is one of thirty-two cases which address a wide range
of ethical issues that can arise in engineering practice provided by
the Centre For the Study of Ethics in Society, Western Michigan
University.

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• Please read the waste disposal caselete. We have
three different scenarios.

• Provide a solution for each scenario in your group.

• Share the suggested solution with the class.

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Examples of companies with great environmental
initiatives
Green practice in service and manufacturing
sector
• Ford- Green life
https://www.youtube.com/watch?v=8rn5S5FK03Q

• eBay
https://www.youtube.com/watch?v=my1GYN5IWtI

• Going green at Google

https://www.youtube.com/watch?v=rHzUCVh9Yvo

• Green practice in hospitals

https://www.youtube.com/watch?v=iGgLWd2qkHk
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Operational trends for ethical organisational and
strategic practices

• Eco-design: A ‘must’ for the development of activities;

• Procurement: The ‘green requirements’ in sustainable
procurement;
• Logistics: Classic optimisation approaches, source of
‘green’ quick wins;
• Lean manufacturing at the time of green supply chain;
• Carbon footprint: Measurement as a prerequisite for
the optimisation;
• Beyond action, communication.
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 Eco-design
“80% of the environmental impact of a product are determined
during the design phase.” German Environment Agency

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 Successful eco-design

Companies have to go through different stages for a successful

eco-design initiative:

1) Answer a real consumer need.

2) Establish a horizontal design team of designers, salespeople,
manufacturers, suppliers, and others to develop design ideas.
3) Evaluate the options by using lifecycle analyses, cleaner
technologies, substitute assessments, and other tools to help
determine production costs.
4) Find the right certification and label for your product by eco-
label agencies.

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 Eco-design
• Eco-design has become key in product marketing for
both:
1) Premium market has customers ready to pay for
responsible products;
2) Mainstream markets that now take benefit of the
technologies developed for the premium market.

• In the future, eco-design will help to reduce the financial

gap between green products and classic products in order
to get sustainable designs out of a niche premium market.

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 The organisation’s external environment
The firm embedded in its external environment, as seen in the figure.
 Political factors
• Wars, corruption (lecture 2), trade union activities, local
and international regulations, taxation, etc.

• Some examples like United Kingdom’s exit from the

European Union, wars in the Middle East, policies that
question and disrupt free trade, health-care reform, and
immigration— all of which increase uncertainty for
businesses while creating opportunities for some
industries and instability in others.
 Economic factors
• Growth rates,

• Interest rates,

• Employment levels,

• Inflation rates,

• Currency & money supply, and

• Disposable & discretionary income.

• Globalisation,

• Competitors and supply

chain, and

• Lending policies of financial

institutions.

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 Socio-cultural factors

➢ Lifestyle changes,
➢ Career expectations,
➢ Demographics,
– Life expectancies
– Aging population
– Rising affluence
– Changes in ethnic composition
– More women in the workforce globally
➢ Increase in temporary workers, and
➢ Geographic distribution of global population.
 Technological factors
• Productivity improvements,
• Focus of technological efforts,
• Industrial spending for R&D (Research and
development),
• Patent protection,
• Stage of product or industry,
• Digital Communications,
– E-tailers
– Mobile devices
• Biotechnology, and
– Genetic engineering
• Nanotechnology.
 Ecological factors

• Global warming

• Sustainable economic growth

• Carbon footprint

• Fossil fuel consumption

• Pollution of air and water

• Toxins in food and products

 Legal factors
• Antitrust regulations,
• Tort Reform,
• Environmental protection laws,
– CARB zero-emission regulation passed in 1990.
– GM, Toyota, and Honda all had EVs by 1997.
– Regulation was revoked & EVs withdrawn in 2002.
• Hiring and promotion laws,
• Americans with Disabilities Act of 1990, and
• Sarbanes-Oxley Act of 2002.
 Recap
• Corporate Social Responsibility (CSR): It is an ethical
business approach that contributes to sustainable
development by delivering economic, social and
environmental benefits for all stakeholders.

• Types of social responsibility:

• Responsibility towards society,
• Responsibility towards government,
• Responsibility towards shareholders,
• Responsibility towards employees, and
• Responsibility towards customers.
58
CSR aims:
• CSR reflects a company’s environmental and social
performance over the last 12 months.
• CSR is looking past performance.
• CSR aims to transparently communicate their
performance to their external audiences like pressure
groups, politicians, and charities for a trusted reputation
of a brand.

Benefits of CSR:
• Increased employee satisfaction,
• Improve public image,
• Increase customer loyalty, and
• Increase creativity. 59
Corporate Social Responsibility theories:

• Friedman’s Traditional View of Business Responsibility:

Stockholder theory, the only social responsibility of
business is to increase its profits, ''greed is good''.

• Ackerman model: Ackerman model has emphasised on

the internal policy goals and their relation to the CSR
(managers should know the most common social
problems and try to solve them).

• Carroll’s Pyramid of CSR (strategic philanthropy):

Economic, legal, ethical, and philanthropic.
60
• Creating Shared Value (CSV)- Mark Kramer and
Michael Porter: “The policies and practices that enhance
the competitiveness of a company while simultaneously
advancing social and economic conditions in the
communities in which it operates”.

• Why do firms engage in CSR

• Examples of CSR

61
Dimensions of CSR:

• Environmental dimensions of CSR and operations

strategy,
• Social dimensions of CSR and operations strategy,
• Economic dimensions of CSR and operations strategy,
• Stakeholder dimensions of CSR and operations
strategy, and
• Voluntary dimension of CSR and operations strategy.
• Corporate philanthropy

Case study- Leaking waste containers

62
• Green practice in service and manufacturing sector.

• Operational trends for ethical organisational and strategic

practices: Eco-design; procurement; logistics; lean
manufacturing at the time of green supply chain; carbon
footprint; and beyond action, communication.

• The organisation's external environment:

❖ Political factors,
❖ Economic factors,
❖ Socio-cultural factors,
❖ Technological factors,
❖ Ecological factors, and
❖ Legal factors. 63
Thank you

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