Download - 01Thorne B&S 4e Ch01
-
7/25/2019 01Thorne B&S 4e Ch01
1/35
CHAPTER 1
Social Responsibility
Framework
Social Responsibility
Framework
-
7/25/2019 01Thorne B&S 4e Ch01
2/35
95% of Respondents Agree
U.S. corporations should have more than one
purpose. They also owe something to their
workers and the communities in which they
operate, and they should sometimes sacrifice
some profit for the sake of making things
better for their workers and communities.
Source: "How Business Rates: By the Numbers, Business
Week, Sept. 11, 2000, pp. 148-149.
-
7/25/2019 01Thorne B&S 4e Ch01
3/35
What do you believe organizations
should be responsible foraccomplishing?
-
7/25/2019 01Thorne B&S 4e Ch01
4/35
Social Responsibility Defined
Social responsibility
The adoption by a business of a strategic focus
for fulfilling the economic, legal, ethical and
philanthropic responsibilities expected of it byits stakeholders
Businesses should look beyond their self-
interests and recognize that they belong toa larger group that expects responsible
participation.
-
7/25/2019 01Thorne B&S 4e Ch01
5/35
Social Responsibility Defined (cont.)
Applies to all types of businesses
Small businesses
Large businesses
Sole proprietorships
Multinational corporations
-
7/25/2019 01Thorne B&S 4e Ch01
6/35
Social Responsibility Defined (cont.)
Adopts a strategic focus
Requires a formal commitment from top management
Communicated through mission and vision statements,
annual reports, websites, and public relations Requires action and results
Depends on collaboration and coordination across business
and among constituencies
Large companies often create specific positions anddepartments to support social responsibility programs
-
7/25/2019 01Thorne B&S 4e Ch01
7/35
Social Responsibility Defined (cont.)
Fulfills societal expectations
Provides a return on investment for owners
Obeys the law and regulatory agencies
Acts in a just, fair, and correct manner
Promotes human welfare and good will
-
7/25/2019 01Thorne B&S 4e Ch01
8/35
TOTO Corporate Responsibility Committee
Strctre
-
7/25/2019 01Thorne B&S 4e Ch01
9/35
!yramid of Social Responsibility
-
7/25/2019 01Thorne B&S 4e Ch01
10/35
Social Responsibility Defined (cont.)
Economic
Maintain profitability
Legal
Abide by legal and regulatory influence
Ethical
Ensure just and fair behavior in the workplace
Philanthropic
Promote human welfare and goodwill
-
7/25/2019 01Thorne B&S 4e Ch01
11/35
Social Responsibility Continm
Add Figure 1.5 here
-
7/25/2019 01Thorne B&S 4e Ch01
12/35
Who are the key
stakeholders of the organization?
-
7/25/2019 01Thorne B&S 4e Ch01
13/35
Social Responsibility Defined (cont.)
Requires a stakeholder orientation
Customers
Employees
Investors
Stockholders
Suppliers
Government
Communities
-
7/25/2019 01Thorne B&S 4e Ch01
14/35
Sta"e#olders
Those constituents who have a stake in,or
claim on,some aspect of a companys
products, operations, markets, industry, and
outcomes
Companies that operate with a stakeholder
orientation recognize that business and society
are interpenetrating systems, in that eachaffects and is affected by the other.
-
7/25/2019 01Thorne B&S 4e Ch01
15/35
$oltion of Social Responsibility&'9s*'9+s
1940s
Economic dominance of corporations
Total autonomy of top management
1950s60s Few formal governance procedures restraining
management actions
Organizational charitable giving expanded
(charities, arts, culture, and community) Laws are passed that require protection of the natural
environment, safer products, promotion of equity,
and supportingworkplace diversity.
-
7/25/2019 01Thorne B&S 4e Ch01
16/35
$oltion of Social Responsibility&'9,s*'9-s
1970s
World competition, bankruptcies, mergers and
acquisitions
1980s
Flatter organizations (downsizing)
More business scandals
Empowerment of lower-level employees
Focus on profitability and economies of scale
-
7/25/2019 01Thorne B&S 4e Ch01
17/35
$oltion of Social Responsibility&'99s*s
1990s
Less employee loyalty and increased job hopping
Growth of temporary employment
Greater interest in ethics and social responsibility 2000s
Special interest groups, companies, human rights activists,
and government strive to balance economic and social goals.
Major scandals damage the global economy.
-
7/25/2019 01Thorne B&S 4e Ch01
18/35
/essons /earned from $conomic
Crises
Transparency
Long-term perspective
Liquidity Limited use of derivatives
Absence of rating triggers
Minimal counter-party exposure Diversification
-
7/25/2019 01Thorne B&S 4e Ch01
19/35
0lobal 1atre of SocialResponsibility
Who determines social responsibility
on a global scale?
Host country
Home country
Outside organizations
-
7/25/2019 01Thorne B&S 4e Ch01
20/35
2anaging Social Responsibilityin 3ome and 3ost 2ar"ets
-
7/25/2019 01Thorne B&S 4e Ch01
21/35
4enefits of Social Responsibility
Greater trust with stakeholders
Greater customer satisfaction
Stronger employee commitment
Stronger investor loyalty
Greater profitability
Countries with greater trust-based institutions foster a
productivity-enhancing environment. Competitive processes are more efficient and effective.
-
7/25/2019 01Thorne B&S 4e Ch01
22/35
Social Responsibility 4ilds Trst
Trust is the glue that holds organizational
relationships together.
Stephen Covey contends that low trust
results in organizational decay and
relationship deterioration.
Political problems and inefficiency
Most workers feel they can be
trusted more than they can
trust others.
-
7/25/2019 01Thorne B&S 4e Ch01
23/35
Social Responsibility 4ilds Trst(cont.)
All organizational members should share a
sense of trust.
Trust should exist between departments
within a firm.
An Ethics Resource Center study shows that
93% of employees who say trust is
frequently evident in their organization
report satisfaction with their employer.
-
7/25/2019 01Thorne B&S 4e Ch01
24/35
To Trst or 1ot to Trst
-
7/25/2019 01Thorne B&S 4e Ch01
25/35
Social Responsibilitymproes Cstomer Satisfaction
Focuses on customer satisfaction and
strengthens trust. This is especially key in
service organizations.
Seventy percent of consumers in a
Cone/Roper poll indicated they would
switch to brands associated with a good
cause if price and quality were equal.
-
7/25/2019 01Thorne B&S 4e Ch01
26/35
6#at #appens 7#en consmer*organi8ational trst is breac#ed
Seventy-five percent of consumers say they
would avoid or refuse to buy from certain
businesses.
Consumers may avoid products from
companies that treat their employees unfairly.
-
7/25/2019 01Thorne B&S 4e Ch01
27/35
Social ResponsibilityStrengt#ens $mployee Commitment
The greater a companys dedication to employees, the greater
the likelihood that employees will take care of the
organization.
Failure to care for employees results in lower loyalty and
commitment.
Employees perceptions are affected by:
Safe working conditions, competitive salaries, and
contractual fulfillment
Social programs, including work-familyrelationships,stock ownership, community service
-
7/25/2019 01Thorne B&S 4e Ch01
28/35
6#at #appens 7#enemployee loyalty is breac#ed
Quality is compromised.
Service is compromised.
Efficiency decreases.
-
7/25/2019 01Thorne B&S 4e Ch01
29/35
Strengt#ening$mployee Commitment
Employee stock ownership plans (ESOPs)
Rewards employees for contributing to and gaining from
organizational success and allows them to gain from it
Employee-centered programs Health care benefits
Health clubs
Child care and elder care
Cafeteria benefits plans
-
7/25/2019 01Thorne B&S 4e Ch01
30/35
Social ResponsibilityContribtes to nestor /oyalty
Investor relationships require dependability,
trust, and commitment.
Shareholders are concerned about ethics,
social responsibility, and corporate reputation.
Half of investors sell their stock
within one year.
-
7/25/2019 01Thorne B&S 4e Ch01
31/35
Social Responsibility$n#ances $conomic !erformance
Does business conduct relate to a
nations overall economic conduct?
Economic well-being is promoted by:
Trust and a sense of community
Rigor in the legal and ethical systems
Consistent exercise of authority within society
Social institutions that foster access,
productivity, and economic growth
Positive attitudes about work, innovation,
savings, and profits
A t# f ll i i
-
7/25/2019 01Thorne B&S 4e Ch01
32/35
Are t#e follo7ing companiesconsidered socially responsible6#y or 7#y not
Procter & Gamble
Washington Mutual
Starbucks General Motors
Avon
AIG
McDonalds
Coca Cola
-
7/25/2019 01Thorne B&S 4e Ch01
33/35
:rame7or" for StdyingSocial Responsibility
Chapter 2
Strategic Management of Stakeholder Relationships
Chapter 3
Corporate Governance
Chapter 4
Legal, Regulatory, and Political Issues
Chapter 5
Business Ethics and Ethical Decision Making
-
7/25/2019 01Thorne B&S 4e Ch01
34/35
:rame7or" for StdyingSocial Responsibility (cont.)
Chapter 6
Strategic Approaches to Improving Ethical Behavior
Chapter 7
Employee Relations
Chapter 8
Consumer Relations
Chapter 9
Community Relations and Strategic Philanthropy
-
7/25/2019 01Thorne B&S 4e Ch01
35/35
:rame7or" for StdyingSocial Responsibility (cont.)
Chapter 10
Technology Issues
Chapter 11
Sustainability Issues
Chapter 12
Social Responsibility in a Global Environment