12th grade corporate social responsibility inquiry should ... · the costs, benefits, and realities...

NEWYORKSTATE SOCIAL STUDIES RESOURCETOOLKIT

T H I S W O R K I S L I C E N S E D U N D E R A C R E A T I V E C OMMON S A T T R I B U T I O N - N O N C OMM E R C I A L - S H A R E A L I K E 4 . 0 I N T E R N A T I O N A L L I C E N S E . 1

12thGradeCorporateSocialResponsibilityInquiry

ShouldCorporationsHaveaConscience?

©iStock/©RawpixelLtd.

SupportingQuestions

1. Whatiscorporatesocialresponsibility(CSR)?2. Whatarethebenefitsofcorporatesocialresponsibility?3. Whatareconcernsaboutcorporatesocialresponsibility?4. Issocialresponsibilityinthebestinterestofsociety?

T H I S W O R K I S L I C E N S E D U N D E R A C R E A T I V E C OMMON S A T T R I B U T I O N - N O N C OMM E R C I A L - S H A R E A L I K E 4 . 0 I N T E R N A T I O N A L L I C E N S E . 2

12thGradeCorporateSocialResponsibilityInquiry

ShouldCorporationsHaveaConscience?NewYorkStateSocialStudiesFrameworkKeyIdea&Practices

12.E3THEIMPACTOFAMERICANCAPITALISMINTHEGLOBALECONOMY:Therearevariouseconomicsystemsintheworld.TheUnitedStatesoperateswithinamixedfree-marketeconomycharacterizedbycompetitionandalimitedroleofgovernmentineconomicaffairs.Economic-policymakersfaceconsiderablechallengeswithinacapitalistsystem,includingunemployment,inflation,poverty,andenvironmentalimpact.GlobalizationincreasesthecomplexityofthesechallengessignificantlyandhasexertedstrongandtransformativeeffectsonworkersandentrepreneursintheUnitedStateseconomy.Gathering,Using,andInterpretingEvidence EconomicsandEconomicSystems

StagingtheCompellingQuestion

Researchcorporations’effortstobesociallyresponsible(e.g.,TysonFoods’“HungerRelief,”Häagen-Dazs’“HoneybeePreservation,”andthe“RonaldMcDonaldHouse”campaigns).Makealistofreasonswhycorporationswouldstartthesetypesofcampaignsandwhatissuesmightarisefromtheseefforts.

SupportingQuestion1 SupportingQuestion2 SupportingQuestion3 SupportingQuestion4

Understand Understand Understand Assess

Whatiscorporatesocialresponsibility(CSR)?

Whatarethebenefitsofcorporatesocialresponsibility?

Whatareconcernsaboutcorporatesocialresponsibility?

Issocialresponsibilityinthebestinterestofsociety?

FormativePerformanceTask FormativePerformanceTask FormativePerformanceTask FormativePerformanceTask

Createaclassroomdefinitionofcorporatesocialresponsibility(CSR).

Prepareforastructuredacademiccontroversy(SAC)bycreatingnotecardssummarizingthebenefitsofcorporatesocialresponsibility(CSR)andevidencetosupporteachbenefit.

Prepareforastructuredacademiccontroversy(SAC)bycreatingnotecardssummarizingtheconcernsaboutcorporatesocialresponsibility(CSR)andevidencetosupporteachcriticism.

Participateinastructuredacademiccontroversy(SAC)aboutwhethersocialresponsibilityisinthebestinterestofsociety.

FeaturedSources FeaturedSources FeaturedSources FeaturedSources

SourceA:“WhatisCorporateSocialResponsibility?”SourceB:ExcerptfromCorporateSocialResponsibility:MakingGoodBusinessSenseSourceC:ExcerptfromThePublicRoleofPrivateEnterprise:Risks,OpportunitiesandNewModelsofEngagement

SourceA:“TripleBottomLine”SourceB:“DoesSocialResponsibilityHelpProtectaCompany’sReputation?”

SourceA:“TheSocialResponsibilityofBusinessIstoIncreaseItsProfits”SourceB:“Hypevs.Hope:IsCorporateDo-GooderyforReal?”

SourceA:FeaturedsourcesfromFormativePerformanceTasks1,2,and3

SummativePerformanceTask

ARGUMENTShouldcorporationshaveaconscience?Constructanargument(e.g.,detailedoutline,poster,essay)thataddressesthecompellingquestionusingspecificclaimsandrelevantevidencefromcontemporarysourceswhileacknowledgingcompetingviews.

TakingInformedAction

ACTWritealetterreactingtotheeffortsofacompanythatisengagedinasocial-responsibilityproject.

Overview

InquiryDescription

Therehasbeenmuchdebateabouttheroleofcorporationsandhowtheyfunctionintoday’sglobalsociety.Argumentsaboundastowhetherornottheseentitiespaytheirfairshareoftaxestothegovernmentsofthecountriesinwhichtheyoperateandwhetherornottheyhaveasocialresponsibilitytoactaccordingtobasicprinciplesofhumanrights.Althoughcorporationsaresaidtoprovidejobsanddirectinvestmentintheeconomy,somearguethatcorporationsshouldexpandtheirmissionstosolvelocalandglobalproblems.Afterconsideringthecosts,benefits,andrealitiesofcorporatesocialresponsibility(CSR),studentsshouldbeabletomakeclaimssupportedbyevidenceastowhethercorporationsshoulddevelopaconsciencebeyondtheirbottomline.ThisinquiryembedstheTakingInformedActionsequencethroughout.

InadditiontotheKeyIdealistedearlier,thisinquiryhighlightsthefollowingConceptualUnderstandings:

(12.E3c)ThefreedomoftheUnitedStateseconomyencouragesentrepreneurialism.Thisisanimportantfactorbehindeconomicgrowththatcanleadtointendedconsequences(e.g.,growth,competition,innovation,improvedstandardofliving,productivity,specialization,trade,outsourcing,classmobility,positiveexternalities)andunintendedconsequences(e.g.,recession,depression,trade,unemployment,outsourcing,generationalpoverty,incomeinequality,thechallengesofclassmobility,negativeexternalities).

(12.E3d)Adegreeofregulation,oversight,orgovernmentcontrolisnecessaryinsomemarketstoensurefreeandfaircompetitionandtolimitunintendedconsequencesofAmericancapitalism.Governmentattemptstoprotecttheworker,propertyrights,andthemarketplaceaswellastopromoteincomeequalityandsocialmobilityhavehadvariedresults.

NOTE:Thisinquiryisexpectedtotakefourtosix40-minuteclassperiods.Theinquirytimeframecouldexpandifteachersthinktheirstudentsneedadditionalinstructionalexperiences(i.e.,supportingquestions,formativeperformancetasks,andfeaturedsources).Teachersareencouragedtoadapttheinquiriesinordertomeettheneedsandinterestsoftheirparticularstudents.Resourcescanalsobemodifiedasnecessarytomeetindividualizededucationprograms(IEPs)orSection504Plansforstudentswithdisabilities.

StructureoftheInquiry

Inaddressingthecompellingquestion“Shouldcorporationshaveaconscience?”studentsworkthroughaseriesofsupportingquestions,formativeperformancetasks,andfeaturedsourcesinordertoconstructanargumentwithevidenceandcounterevidencefromavarietyofsources.

StagingtheCompellingQuestion

Thecompellingquestioncouldbestagedbyhavingstudentsresearchcorporations’effortstobesociallyresponsible(e.g.,TysonFoods’“HungerRelief,”Häagen-Dazs’“HoneybeePreservation,”andthe“RonaldMcDonald

House”campaigns).Studentscouldmakealistofreasonswhycorporationswouldstartthesetypesofcampaigns,howtheymightidentifyanicheorcause,andwhatissuesmightarisefromtheseefforts.

SupportingQuestion1

Thefirstsupportingquestion—“Whatiscorporatesocialresponsibility(CSR)?”—initiatestheinquirybydirectingstudentstodefinethemajortenetsofCSR.TheformativeperformancetaskasksstudentstocreateaclassroomdefinitionofCSRthatincorporatesthemainideasfromthefeaturedsources.ThefeaturedsourcesincludethreedescriptionsofCSRfromtheUnitedNationsIndustrialDevelopmentOrganization,theWorldBusinessCouncilforSustainableDevelopment,andtheHarvardBusinessSchool’sSocialResponsibilityInitiative.

SupportingQuestion2

Thesecondsupportingquestion—“Whatarethebenefitsofcorporatesocialresponsibility(CSR)?”—hasstudentsconsiderthepositiveoutcomesfromcompaniesadoptingpoliciesorprogramsthataresociallyresponsible.TheformativeperformancetaskasksstudentstocreatenotecardssummarizingthebenefitsofCSRandevidencetosupporteachbenefit.Thesenotecardsshouldassiststudentsastheyparticipateinastructuredacademiccontroversy(FormativePerformanceTask4)inwhichtheyinitiallytakeonesideofanissueandlookattheevidencethatsupportsthatsidebeforeultimatelycomingtoagroupconsensusbyconsideringalltheevidence.MoreinformationonastructuredacademiccontroversycanbefoundinAppendixAandatthefollowingwebsite:http://teachinghistory.org/teaching-materials/teaching-guides/21731.ThefeaturedsourcesforthissupportingquestionincludeanarticlefromTheEconomistthatexplainsthetriplebottomlineof“people,planet,andprofit”andanarticlefromMIT’sSloanBusinessSchooldetailingastudythatreportedonCSRanditsimpactonacompany’sreputationandprofits.

SupportingQuestion3

Thethirdsupportingquestion—“Whatareconcernsaboutcorporatesocialresponsibility(CSR)?”—hasstudentsconsiderthenegativeimpactsofcompaniesadoptingpoliciesorprogramsthataresociallyresponsible.TheformativeperformancetaskasksstudentstocreatenotecardssummarizingtheconcernsaboutCSRandevidencetosupporteachconcern.Thesenotecardsshouldassiststudentsinparticipatinginastructuredacademiccontroversy(FormativePerformanceTask4).MoreinformationonastructuredacademiccontroversycanbefoundinAppendixAandatthefollowingwebsite:http://teachinghistory.org/teaching-materials/teaching-guides/21731.ThefeaturedsourcesincludeaNewYorkTimesarticlebyNobelPrize–winningeconomistMiltonFriedman,whoarguesthatmaximizingprofitsissociallyresponsiblebehaviorforcorporationsandaMotherJonesarticlebyBillMcKibbenquestioningthemotivesofcompanieswhoengagein“do-goodery.”

SupportingQuestion4

Thefinalsupportingquestion—“Issocialresponsibilityinthebestinterestofsociety?”—anchorstheformativeperformancetask,whichisastructuredacademiccontroversythatasksstudentstodiscussthebenefitsandconcernsofcorporatesocialresponsibility.Ingroupsoffour,twostudentsshouldarguethatthatsocialresponsibilityisinthebestinterestofsocietyandtwoshouldarguethatitisnotinsociety’sbestinterest.MoreinformationonastructuredacademiccontroversycanbefoundinAppendixAandatthefollowingwebsite:http://teachinghistory.org/teaching-materials/teaching-guides/21731.

SummativePerformanceTask

Atthispointintheinquiry,studentshavecreatedaworkingdefinitionofCSRandexaminedboththebenefitsandconcernsaboutcorporatecampaignsthataregroundedinCSR.Studentsshouldbeexpectedtodemonstratethebreadthoftheirunderstandingsandabilitiestouseevidencefrommultiplesourcestosupporttheirdistinctclaims.Inthistask,studentsconstructanevidence-basedargumentrespondingtothecompellingquestion“Shouldcorporationshaveaconscience?”Itisimportanttonotethatstudents’argumentscouldtakeavarietyofforms,includingadetailedoutline,poster,oressay.

Students’argumentslikelywillvary,butcouldincludeanyofthefollowing:

• Corporationsneedtohaveaconscience.Consumersarestartingtocareaboutcorporatesocialresponsibilityinmakingpurchasingdecisions,andthisinfluencesthebottomline.

• Corporationsdon'tnecessarilyneedtohaveaconsciencebecausetheyshouldcarefirstandforemostaboutprofitsandstockholders.

• CorporationshaveaconsciencebecausetheygenerallypracticegoodcitizenshipintheUnitedStatesandabroadbycreatingbetterworkingconditions,protectingtheenvironment,andpositivelyinfluencinglocalandglobalcommunities.

• Corporationsdon'tnecessarilyneedtohaveaconscience;corporatesocialresponsibility(CSR)isoftenseenascodeformoregovernmentregulationandoversightofthecorporatemarketplace,which,inthelongrun,benefitsnoone.

StudentshavetheopportunitytoTakeInformedActionbyusingtheinformationfromtheinquirytoevaluateacorporationthatisactivelyengagedinasocialresponsibilityproject.StudentsdemonstratethattheyunderstandthroughtheirworkonSupportingQuestions1,2,and3,whiletheyassesssocialresponsibilityinSupportingQuestion4.Studentsactbywritingaletterexpressingareactiontoacorporation’seffortsatCSR.Thistaskcanbedoneinadditionto,orasasubstitutefor,theSummativePerformanceTask.Studentscouldwritealettertothecompanysharingtheresultsoftheevaluationandnotingwhethertheythinkthecompanyshouldcontinueitsefforts.

SupportingQuestion1

FeaturedSource SourceA:NicoleFallon,explanationofCorporateSocialResponsibility,“WhatisCorporateSocialResponsibility?”BusinessNewsDaily,2015

NOTE:SMEisanacronymforSmallandMedium-SizedEnterprises

WhatIsCSR?

CorporateSocialResponsibilityisamanagementconceptwherebycompaniesintegratesocialandenvironmentalconcernsintheirbusinessoperationsandinteractionswiththeirstakeholders.CSRisgenerallyunderstoodasbeingthewaythroughwhichacompanyachievesabalanceofeconomic,environmentalandsocialimperatives(“Triple-Bottom-Line-Approach”),whileatthesametimeaddressingtheexpectationsofshareholdersandstakeholders.InthissenseitisimportanttodrawadistinctionbetweenCSR,whichcanbeastrategicbusinessmanagementconcept,andcharity,sponsorshipsorphilanthropy.Eventhoughthelattercanalsomakeavaluablecontributiontopovertyreduction,willdirectlyenhancethereputationofacompanyandstrengthenitsbrand,theconceptofCSRclearlygoesbeyondthat.

PromotingtheuptakeofCSRamongstSMEsrequiresapproachesthatfittherespectiveneedsandcapacitiesofthesebusinesses,anddonotadverselyaffecttheireconomicviability.UNIDObaseditsCSRprogrammeontheTripleBottomLine(TBL)Approach,whichhasproventobeasuccessfultoolforSMEsinthedevelopingcountriestoassisttheminmeetingsocialandenvironmentalstandardswithoutcompromisingtheircompetitiveness.TheTBLapproachisusedasaframeworkformeasuringandreportingcorporateperformanceagainsteconomic,socialandenvironmentalperformance.Itisanattempttoalignprivateenterprisestothegoalofsustainableglobaldevelopmentbyprovidingthemwithamorecomprehensivesetofworkingobjectivesthanjustprofitalone.Theperspectivetakenisthatforanorganizationtobesustainable,itmustbefinanciallysecure,minimize(orideallyeliminate)itsnegativeenvironmentalimpactsandactinconformitywithsocietalexpectations.

KeyCSRissues:environmentalmanagement,eco-efficiency,responsiblesourcing,stakeholderengagement,labourstandardsandworkingconditions,employeeandcommunityrelations,socialequity,genderbalance,humanrights,goodgovernance,andanti-corruptionmeasures.

AproperlyimplementedCSRconceptcanbringalongavarietyofcompetitiveadvantages,suchasenhancedaccesstocapitalandmarkets,increasedsalesandprofits,operationalcostsavings,improvedproductivityandquality,efficienthumanresourcebase,improvedbrandimageandreputation,enhancedcustomerloyalty,betterdecisionmakingandriskmanagementprocesses.ReprintedwithpermissionfromtheUnitedNationsIndustrialDevelopmentOrganization.http://www.unido.org/en/what-we-do/trade/csr/what-is-csr.html.

SupportingQuestion1

FeaturedSourceSourceB:RichardHolmeandPhilWatts,studythatexamineswhatcorporatesocialresponsibilitymeansaswellaspracticesassociatedwiththatethic,“CorporateSocialResponsibility:MakingGoodBusinessSense”(excerpt),2000

HEADLINES

OuractivityoverthepastmonthshassignificantlybroadenedanddeepenedourunderstandingofthemanyfacetsofCSR.Herearesomeofthemostrelevantfindings:“theheadlines”.

Arecognitionthat:

• CSRisessentialtothelongtermprosperityofcompaniesasitprovidestheopportunitytodemonstratethehumanfaceofbusiness—avitallinktosocietyingeneraland,inparticular,tothecommunitiesinwhichbusinessesarelocated;

• thevalueofcreatingpracticalpartnershipsanddialoguebetweenbusiness,government,andorganizationscannotbeunderestimated;

• companiesshouldsaywhattheystandforanddemonstrateitinaction.

“Ourpositionastheworld’sleadingmediaandentertainmentcompanycouldnothavebeenreached—andcouldnothavebeensustained—solelyfrombusinesssuccess.Itrestsequallyonourtraditionofsocialresponsibilityandcommunityinvolvement.Atthecoreofthisenterpriseisthedeterminationtomakeadifferenceaswellasaprofit.”

GeraldLevin,ChairmanandCEO,TimeWarner,Inc.

Headline#1 CSRasthehumanfaceofbusiness

InourfirstReportweconcludedthatacoherentCSRstrategy,basedonintegrity,soundvaluesandalong-termapproachofferedclearbusinessbenefits.Thebenefitsthenperceivedareincreasinglyobvioustomanycorporateleaders:abetteralignmentofcorporategoalswiththoseofsociety,andindeedofthecompaniesownmanagersmaintainingthecompany’sreputation;securingitscontinuedlicensetooperate;andreducingriskanditsassociatedcosts.Inotherwords,takingthelongertermview.SincethatReport,thekeyconclusionsofwhicharesetoutin‘Settingthescene’,thedebateonglobalizationhasintensified,bringingfurthercompellingreasonsforcompaniestofocusonCSR.Today,therefore,ourbusiness-caseargumenthasexpandedtoincludethefollowingpoints.

Concernsassociatedwithglobalization,freetradeandforeigndirectinvestmentcontinuetoberaisedandcouldthreateninvestmentandeconomicgrowth.Theseconcernsoftencenteronthebeliefthatsocialandenvironmentalstandardsarebeingcompromised,orthatinvestmentdecisionsareinsensitivetolocalneedsandcircumstances.CSRprovidesbusinesswithanopportunitytodemonstratethatthisdoesnothavetobethecase.GoodCSRpoliciesbasedonpartnershipswithhostcountriesandcommunitiesandonimplementingtheprinciplesofsustainabledevelopmentcandemonstratealocalcommitmentonthepartofeventhelargestglobalcompany.

CSRrepresentsthehumanfaceofthehighlycompetitiveworldofcommerce.Perceptionofthishumanfaceisavitalandnecessarypartofsociety’swillingnesstoacceptthesignificantandsometimes(atleastintheshort-term)difficultchargesbroughtaboutbyelementsofglobalization.

Ifinternationalcompaniessetpolicies,howeverwellintentioned,fromremotecorporateheadquarterswithoutfosteringpartnershipsandlocalinvolvementinthecommunitiesinwhichtheydobusiness,theyarelikelytofuelfeelingsofalienationandsuspicion.Businesstodaysimplycannotaffordsuchalienationsincethoseverycommunitiesarevitaltoacompany’scontinuedcommercialsuccess.Businessneedsastablesocialenvironmentthatprovidesapredictableclimateforinvestmentandtrade.

CSRisthemeansbywhichbusinesscontributestothatstabilityratherthandetractingfromit.Byestablishingandmaintainacorporateagendawhichrecognizessocialprioritiesandistailoredtomeetthem,businessdisplaysitshumanfacetoconsumers,communitiesandopinionleaders.Training,thetransferofskillsandexpertise,newtechnologicalsolutions,contractingofservices,helpfulinfrastructuredevelopment,aswellascommunitysocialandhealthprogramsandaclearcommitmenttohumanrightscanalldemonstratethewilltobeagoodlocalcitizenandtohelpcreatesustainablelivelihoods.Bytheirsocialcontribution,companiesshowthehumanfaceofglobalizationandreducefearsaboutthenegativeimpactsofinternationalbusinessonlocallife.

Foranycompany,givingahighprioritytoCSRisnolongerseentorepresentanunproductivecostorresourceburden,but,increasingly,asameansofenhancingreputationandcredibilityamongstakeholders–somethingonwhichsuccessorevensurvivalmaydepend.Understandingandtakingaccountingofsociety’sexpectationsisquitesimplyenlightenedself-interestforbusinessintoday’sindependentworld.

Headline#2 Globalprinciples—localpartnershipsareintegral

DifferentbusinessesindifferentsectorsinevitablyputemphasisondifferentaspectsofCSR.Forexample,anaturalresourcebusinessmayemphasizecommunityengagement,whereas,aretailermayfocusonsupplychainmanagement.Asourdialoguesdemonstrate,differentsocietiesaroundtheworldhavevaryingexpectationsandcultures.Thismeansthatuniversalcodes—the“one-size-fits-all”—approachmaynotprovidetheanswer.

Webelievethatcompaniesshoulddeclaretheirownvaluesandtalkthemthroughinopenandtransparentdialoguewiththosewhohaveastakein,orareaffectedby,theiroperations—whethertheybecentralandlocalgovernments,IGOs,NGOsorlocalcommunities.Externalcodes,guidelinesorprinciplescanprovideahelpfulbackdroporalignment,butthereisnosubstituteforinternaljudgmentastowhatconstitutesaconstructiveandpracticalpartnership.Dialogueandunderstandingcanleadtousefulpartnerships,baseduponaclearappreciationofeachother’sexpectations.

Headline#3 Saywhatyoustandfor.Demonstrateitinaction.Makeadifference.

Toomanydiscussionsaboutthemeaningofcorporatesocialresponsibilityareplaguedwithcarefulqualifications.Thelanguageistentative,theobjectivesobscure.Participantsinthedebatecannolongeraffordtheluxuryofambiguity.Meaningfulchangeisnecessary.Companiesmustmovefrombeing“observerandvictim”tobeing“shaperandadvocate.”(SeeMultinationalCorporations&HumanRights,DepartmentofPublicInternationalLaw,ErasmusUniversity,Rotterdam,AveryChris.)

Webelievethatcompaniesneedtobeclearaboutwhattheystandforandthattheyshouldspeakopenlyanddirectlyabouttheirsocialvaluesandconduct.Inshort,ourmessageis:determineapositionandstateyourthinking.Ifyoudecide,asacorporation,thathumanrightsorsocialinvestmentareapriorityinyouroperations,makeacommitment.Putsomemusclebehindwhatyoustandforandbackitupwithaction.

Weseethispro-activestanceasanimportantextensiontoourearlierthinkingontheimportanceofbeingresponsivetolocalandculturaldifferenceswhenimplementingglobalpolicies.Ourglobalconsultationsreinforceourconvictionthatbeingresponsivemeansdemonstratingresponsibilityandlocalsensitivityinaction.

Inconclusion,ourmessageis:Determineyourvalues,thendemonstratethemthroughspecificinitiatives.Whatmattersiswhatyoudoandthedifferenceyoumake.

SOUNDINGS

Aregionalperspective

AnimportantelementoftheWBCSD’sworkoncorporatesocialresponsibilityhasbeentoexplorewhattheissuemeans,bothtobusinessitselfandtoawidespectrumofnon-businessstakeholders.WefeltwealreadyhadareasonablygoodgraspofthegeneralEuropeanandNorthAmericanperspectivesonCSRbasedonourfirstdialogueinTheNetherlands.Butwhatwerepeoplesayingabouttheissueinotherpartsoftheworld?Weneededperspectiveswhichreflectedmorelocalorcommunity-basedpriorities.

Subsequently,wehavediscussedtheseissueswithbusinessandnon-businessstakeholdersinanothersevencountriesaroundtheworld.Ouraimwastounderstandlocalperspectivesbetterandgaugewhetherbusinessisontherighttrack.Inthefollowingpages,wecapturehighlightsfromtheseencounters.(Pleasenotethatcarewastakentoaccuratelyreflectpeople’scomments.However,suchanactivityissubjecttonumerousinterpretationsandgeneralizations.)

Itissignificantthatpeoplearetalkingabouttheroleoftheprivatesectorinrelationtoasocialagendaandtheyseethatroleasincreasinglylinkedtotheoverallwell-beingofsociety.

Therewaswidespreadunderstandingandsupportfortheconceptofresponsiblecompaniesengagedwiththewell-beingofsocietiesinwhichtheyoperate.Predictable,theprioritiesforactiondiffered,accordingtotheperceptionoflocalneeds.What,then,didpeopleseeaslocalpriorities?Basedonregionaldialogues,itcanbesummarizedashelpingtomeettheneedsoflocalsociety.

DoesthedefinitionofCSRpassmuster?

“Corporatesocialresponsibilityisthecontinuingcommitmentbybusinesstobehaveethicallyandcontributetoeconomicdevelopmentwhileimprovingthequalityoflifeoftheworkforceandtheirfamiliesaswellasofthelocalcommunityandsocietyatlarge.”

Theabovedefinitionwasdevelopedin1998forourfirstCSRdialogueinTheNetherlands.Duringtheroundofglobaldialogues,weinvitedparticipantstodiscussthisdefinition.Thefollowingemerged:

InTaiwan,itwasfeltthatthedefinitionshouldaddress:

• benefitsforfuturegenerations• environmentalconcerns(damagepreventionandremediation).

“CSRisthecontributiontothedevelopmentofnaturalandhumancapital,inadditiontojustmakingaprofit.”--WBCSDstakeholderdialogues,TaipeiTaiwan,March1999.

IntheUSA,peoplesaid:

• includemoreemphasisontheroleoftheindividual• reflecttheneedforgreatertransparency• theterm“economicdevelopment”doesnotadequatelycapturethebreadthfortheeconomicroleof

businessinsociety.

“CSRisabouttakingpersonalresponsibilityforyouractionsandtheimpactsthatyouhaveonsociety.Companiesandemployeesmustundergoapersonaltransformation,re-examinetheirroles,theirresponsibilitiesandincreasetheirlevelofaccountability.”--WBCSDstakeholderdialogues,DetroitUSA,May1999.

InGhana,itwassaidthatthedefinitionshouldmentionthenotionof:

• aglobalperspectivewhichrepresentslocalculture• buildinglocalcapacityleavingapositivelegacy• empowermentandownership• teachingemployeesskillsandenablingcommunitiestobeself-sufficient• filling-inwhengovernmentfallsshort• givingaccesstoinformation• partnerships,becauseCSRdoesnotdevelopinavacuum.

“CSRisaboutcapacitybuildingforsustainablelivelihoods.Itrespectsculturaldifferencesandfindsthebusinessopportunitiesinbuildingtheskillsofemployees,thecommunityandgovernment.”--WBCSDstakeholderdialogues,AccraGhana,May1999.

InThailand,peoplesaiditshouldtrytocapture:

• theconceptthatthebiggerthecompany,thegreatertheobligation• theimportanceofenvironmentalmitigationandprevention• theneedfortransparency• theimportanceofconsumerprotection• awarenessofandchangeinpeople’sattitudestowardstheenvironment• therelevanceofyouthandgenderissues.

“CSRmustbelocallyrelevantandmeaningfulonlyifbackupaction.”--WBCSDstakeholderdialogues,BangkokThailand,May1999.

InthePhilippines,itwasproposedthatitshouldfocuson:

• determiningtherealneedsofstakeholders• definingethicalbehavior• partnerships• avisionaryandleadingrole

“CSRisaboutbusinessgivingbacktosociety”--WBCSDstakeholderdialogues,ManilaThePhilippinesJune1999.

InBrazil,itwasstressedthat:

• allbusinesses,communitiesandstakeholdersareresponsibleforsustainabledevelopment• businessshouldpursuehighethicalstandardsbothwithintheiroperationsandwithinthebroader

community.

“CSRisaboutcommitmenttostriveforthebesteconomicdevelopmentforthecommunity,torespectworkersandbuildtheircapacities,toprotecttheenvironmentandtohelpcreateframeworkswhereethicalbusinesscanprosper.”--WBCSDstakeholderdialogues,RiodeJaniero,BrazilSeptember1999.

InArgentina,participantsfeltthat:

• CSRshouldstressbusinesscommitmentandsustainableeconomicdevelopment• Stakeholderparticipationwasessential.

“CSRisaboutacorporation’sabilitytorespondtosocialchallenges.Itstartswithdevelopinggoodrelationswithneighbors.Companiesshouldmakeastrongcommitmenttoeducation,workerrights,capacitybuilding,andjobsecurity.CSRisstimulatingtheeconomicdevelopmentofacommunity.“--WBCSDstakeholderdialogues,BuenosAiresArgentina,September1999.

Asso,whatcanweconclude?Ouroriginaldefinitionwasreasonablyconsistentwiththeregionalinputsbutcanbeimprovedsothatitnowreads:

“Corporatesocialresponsibilityisthecommitmentofbusinesstocontributetosustainableeconomicdevelopment,workingwithemployees,theirfamilies,thelocalcommunityandsocietyatlargetoimprovetheirqualityoflife.”

WhatkeyissuesdoesCSRinclude?

Inourfirstreport,thefollowingfivetopicsemergedaspriorityareas:

• Humanrights• Employeerights• Environmentprotection• Communityinvolvement• Supplierrelations.

What,then,wasthereactiontothislistofissuesduringthelatestroundofdialogues?Didparticipantsintheregionaleventsalsojudgetheseissuestobepriorityconcerns?Wesummarizebelowthekeymessagesandregionalthemes.

Humanrights

Discussionsabouttherolewhichcompaniesplaydealingwithhumanrightselicitedmixedreactionsfromdialogueparticipants.Thisisprimarilybecausedifferentregionsinterpretthetermhumanrightsdifferently.Inseveralareasthetermwasnarrowlyinterpretedtomeanchildandslavelabor.Inotherareashumanrightswereseenasanumbrellatocoveralmostallsocialandenvironmentalissuesstartingwiththerighttobreathecleanairanddrinkcleanwater.TheWBCSDdidnotattempttodefinehumanrights,sincetheideawastoobtainreactionstowhatthetermmeanttoparticipants,andascertaintheirideasontheroleofbusiness.

Manyfeltthatcompanieshadnotbusinessmeddlinginpoliticstopressuregovernmentonhumanrightsissues.Othersfeltitimperativethatcompaniesshouldexerttheirinfluenceinordertobringaboutchangetoensurehumanrightswereobserved.Nearlyalloftheparticipantstoldusthatupholdinghumanrightswithincompanies,andinareasdirectlyinfluenceorcontrolledbycompanies,wasveryimportant.Moststressedtheimportanceofrespectinglocalculturaldifferencesandeconomicsituations,whichshapetheperceptionofwhathumanrightsareandwhatconstitutesaviolationofhumanrights.Westernconceptsshouldnotbeimposedonothers,theysaid.Furthermore,itwasclearlyfeltthatcompaniesshouldcontributetoimprovinghumanrightsbybuildinglocalcapacityandincreasinguseoflocalgoodsandservicesintheiroperations.

Employeerights

Allthedialoguesstressedthatthewell-beingofemployeeswasparamountinanydiscussionofcorporatesocialresponsibility.Ourinterlocutorstoldusthatemployeerightsshouldincludetherightstoenhanceskillsandcapacityandthatcompanieshadanobligationtoprovidetrainingtohelpensurefutureemploymentbeitwiththatcompanyorwithanother.Theimportanceofrespectingculturaldifferenceswasalsostressedduringmanyofthedialogues,particularlywithregardtoculturalissuesintheworkplace.Manyparticipantsemphasizedthatthechoiceofhowtoberepresented,includingrepresentationthroughunionswascritical,aswereissuesofpayequityandfaircompensation.

Environmentalprotection

Howdidtheenvironmentfareasapriorityissueofcorporatesocialresponsibility?MostfeltthatenvironmentalstewardshipwasanimportantcomponentofCSRandthatcompliancewithenvironmentallegislationandregulationswasfundamental.However,itwasemphasizedthatwhileinmanypartsoftheworldsuchcomplianceisagiven,insomeareasthisisstillnotthecase.Poorenforcementcapacityofsomegovernmentsandtheheavyeconomicburdensofupgradingoldplantsandcleanertechnologyarebarrierstobetterenvironmentalperformance.Dialogueparticipantsencouragedlowcosttechnologytransferschemesandfurtherexplorationofself-monitoringasameansofimprovingenvironmentalperformance,particularlyinpartsoftheworldwheregovernmentinfrastructureandenforcementwaslax.

Communityinvolvement

Dialogueparticipantstalkedabouttheimportanceofcompanyinvolvementandinvestmentinthelocalcommunity.Thisinvolvementwasfurtherdefinedtoincludesuchthingsasresponsibilityforskillstrainingandensuringthatproperhealthandsafetysystemswereinplacetoprotectthecommunity.Partnershipsareseenasanimportantpartofcorporatesocialresponsibility.Philanthropyandcharitywerementionedfrequently,butmanyparticipantsemphasizedpreferenceforcollaborativeprojectsandplacedgreaterstressonmutualitythanonsimplygiving.Theover-archingmessagewasclear.Regularcontactwiththelocalcommunityandampleopportunityfordialogueareextremelyimportant.Companiesmayfeelasiftheyarepartofthecommunitybutuntiltherestofthecommunityacceptsthem,thereismuchworktobedone.

Supplierrelations

Companyrelationswithsuppliersandcontractorswasnotalwaysdeemedapriorityamongthedialogueparticipants.InAsiaandAfrica,althoughmanyrecognizedtheissueasbeingimportanttheyfeltthatotherissuesshouldtakeprecedence.Severalspokeoftheimportanceofincreasingopportunitiesfornationalsuppliers.InArgentinaandBrazil,oneofthekeyCSRissueswasimprovingtheexchangeofknowledge,technologyandideasbetweensuppliersandcompanies.

Capturingadditionalthinking

Weweretoldthatthereweresomeimportantissuesmissingfromourinitiallist.Theyincluded:

• Reporting/disclosure/transparency.IntheAsiandialogues,weweretoldthatdemandforreportingwascurrentlylowbutthatthiswouldgrowinimportanceinthefuture.IntheUS,thediscussionsemphasizedtheneedforgreatertransparencyinreportingandauditingsystems.InbothArgentinaandBrazilthedemandforgreatertransparencyhadrisenwiththeprivatizationofmanyindustries.

• Principles/codes.InThailand,weweretoldthatcodeswerearelativelynewtoolbutfeltthatinordertobeuseful,anycodeorsetofprinciplesneededtobeadaptedtolocalculturalsituations.Codeswerealsoregardedasapotentiallygoodmeanstoeliminatecorruption.InTaiwan,weweretoldthatcorporations

sufferfromanimageproblemandwouldbenefitfromsomeimprovementtotheiroverallreputation.IntheUS,participantsstressedtheneedforbettercommunicationofethics/principlesintunewithsocietiesexpectations.Theseprinciples,iftheyweretohaverealvalue,wouldhavetobecommunicatedtointernalandexternalaudiencesthroughgoodperformancewhichhasbeenindependentlyverified.InArgentinaandBrazil,thevalueofcodeswasthoughttobelimited.

• Consumereducation/productusage/stewardship.OurSouthEastAsianandNorthAmericandialoguesemphasizedtheroleofbusinessineducatingconsumersaboutwhatproductscontain,abouttheirproperuseanddisposalabouttheenvironmentalimpactsofthecompleteproductlifecycle.InTaiwanitwassuggestedthatbusinessfundsNGOstodevelopgeneralenvironmentaleducationprogramsforthecommunity.Thiswascoupledwiththeirstronggovernmentcommitmenttoenvironmentaleducationprogramsinschoolsstartingataveryearlyage.InLatinAmerica,consumereducationwasalsoseenasacriticalelementinpromotingsustainableconsumption.

• Communication.Deemedimportant,butactionsspeaklouderthanwords.InGhana,concernsarosearoundthosecompaniesthatoverpublicizerelativelymodestcontributions.Overall,itwasfeltthatcompaniesdonotdoagoodenoughjobofcommunicatingthegoodthingstheydoandthatcommunitytrustcouldbeincreasedifcompanieswouldsimplytelltheirstory.Thestory,ofcourse,neededtobetransmittedinanimaginativeformbyrespectedlocalpeopleinafashionappropriatetothelocalcommunity.

• Corruptionisdetrimentaltoinvestmentandhencetothewell-beingofsociety.Corruptionwithingovernmentdistortsthemarketplaceandrepresentsaseriousproblemforbusiness,particularlysmallercompanieswhomaynotfinditaseasytoresisttheirlargercounterparts.

SupportingQuestion1

FeaturedSourceSourceC:JaneNelson,articleprovidinganoverviewofcorporatesocialresponsibilityincludingrisks,opportunities,andquestionsaboutthisethic,“ThePublicRoleofPrivateEnterprise:Risks,OpportunitiesandNewModelsofEngagement”(excerpts),2004

CorporateSocialResponsibilityInitiativeWorkingPaperNo.1,ReprintedwithpermissionfromtheJohnF.KennedySchoolofGovernment,HarvardUniversity.http://www.hks.harvard.edu/content/download/67667/1243478/version/1/file/workingpaper_1_nelson.pdf.

SupportingQuestion2

FeaturedSource SourceA:TimHindle,articledefininganddescribingtheTripleBottomLine,“TripleBottomLine,”TheEconomist,November19,2009

Toaccessthissource,pleaseclickonthefollowinglink:http://www.economist.com/node/14301663

SupportingQuestion2

FeaturedSourceSourceB:AndreasB.EisingerichandGunjanBhardwaj,articleexaminingtheeffectivenessofcorporatesocialresponsibility,“DoesSocialResponsibilityHelpProtectaCompany’sReputation?”MITSloneReview,2011

DoesSocialResponsibilityHelpProtectaCompany’sReputation?

Whenconsumersencounternegativeinformationaboutacompany,itsreputationforcorporatesocialresponsibilitycanhelp—butonlysometimes.

AndreasB.EisingerichandGunjanBhardwaj

March23,2011

Negativeinformationaboutbusinessesisomnipresent.Evenmuch-admiredbusinesses,suchasAppleInc.,mustdealwithnegativeinformation,asApplediscoveredwhenconsumercomplaintssurfacedin2010abouttheantennadesignofitsiPhone4.Negativeinformationtendstospreadfasterthanpositiveand,becauseofincreasedusageofsocialmediaandtheInternet,businessesarelikelytobeconfrontedwithmore—notless—negativeinformationabouttheircompaniesinthefuture.Whilethespreadofnegativeinformationmaynotalwaysbeunderthecontrolofabusiness,itcantrytomitigatethepotentialdamagefromnegativeinformationindifferentways.

Anincreasingnumberofcompaniesinvestmoneyincorporatesocialresponsibilityinitiatives,inparttobuildgeneralgoodwillfortheirorganizations.However,wehavenotknownhoweffectivecorporatesocialresponsibilityinitiativesareinstrengtheningcustomerresistancetonegativeinformation,comparedtoothertacticsthatcanenhanceacompany’sreputation—suchasinvestinginproductorservicequalityorcustomercare.Doesdoinggoodhelpprotectabusiness’sreputationagainstnegativeinformationitmaybeconfrontedwithinthefuture?

Notcompletely,somerecentresearchofourssuggests.WeconductedastudywithGaiaRubera,anassistantprofessorofmarketingatEliBroadCollegeofBusinessatMichiganStateUniversity,andMatthiasSeifert,anassistantprofessorofoperationsandtechnologyatIEBusinessSchoolinMadrid,tolookathowcustomersreactedtonegativeinformationaboutacompany.DetailedresultsfromthestudywerepublishedintheFebruary2011issueoftheJournalofServiceResearch.

©MassachusettsInstituteofTechnology2011.Reprintedwithpermission.http://sloanreview.mit.edu/article/does-social-responsibility-help-protect-a-companys-reputation/.

SupportingQuestion3

FeaturedSource SourceA:MiltonFriedman,articlearguingthatmaximizingprofitsissociallyresponsible,“TheSocialResponsibilityofBusinessIstoIncreaseItsProfits,”NewYorkTimes,September13,1970

WhenIhearbusinessmenspeakeloquentlyaboutthe"socialresponsibilitiesofbusinessinafree-enterprisesystem,"IamremindedofthewonderfullineabouttheFrenchmanwhodiscoveredattheageof70thathehadbeenspeakingproseallhislife.Thebusinessmenbelievethattheyaredefendingfreeenterprisewhentheydeclaimthatbusinessisnotconcerned"merely"withprofitbutalsowithpromotingdesirable"social"ends;thatbusinesshasa"socialconscience"andtakesseriouslyitsresponsibilitiesforprovidingemployment,eliminatingdiscrimination,avoidingpollutionandwhateverelsemaybethecatchwordsofthecontemporarycropofreformers.Infacttheyare–orwouldbeiftheyoranyoneelsetookthemseriously–preachingpureandunadulteratedsocialism.Businessmenwhotalkthiswayareunwittingpuppetsoftheintellectualforcesthathavebeenunderminingthebasisofafreesocietythesepastdecades.

Thediscussionsofthe"socialresponsibilitiesofbusiness"arenotablefortheiranalyticalloosenessandlackofrigor.Whatdoesitmeantosaythat"business"hasresponsibilities?Onlypeoplecanhaveresponsibilities.Acorporationisanartificialpersonandinthissensemayhaveartificialresponsibilities,but"business"asawholecannotbesaidtohaveresponsibilities,eveninthisvaguesense.Thefirststeptowardclarityinexaminingthedoctrineofthesocialresponsibilityofbusinessistoaskpreciselywhatitimpliesforwhom.

Presumably,theindividualswhoaretoberesponsiblearebusinessmen,whichmeansindividualproprietorsorcorporateexecutives.Mostofthediscussionofsocialresponsibilityisdirectedatcorporations,soinwhatfollowsIshallmostlyneglecttheindividualproprietorsandspeakofcorporateexecutives.

Inafree-enterprise,private-propertysystem,acorporateexecutiveisanemployeeoftheownersofthebusiness.Hehasdirectresponsibilitytohisemployers.Thatresponsibilityistoconductthebusinessinaccordancewiththeirdesires,whichgenerallywillbetomakeasmuchmoneyaspossiblewhileconformingtothebasicrulesofthesociety,boththoseembodiedinlawandthoseembodiedinethicalcustom.Ofcourse,insomecaseshisemployersmayhaveadifferentobjective.Agroupofpersonsmightestablishacorporationforaneleemosynarypurpose–forexample,ahospitaloraschool.Themanagerofsuchacorporationwillnothavemoneyprofitashisobjectivebuttherenderingofcertainservices.

Ineithercase,thekeypointisthat,inhiscapacityasacorporateexecutive,themanageristheagentoftheindividualswhoownthecorporationorestablishtheeleemosynaryinstitution,andhisprimaryresponsibilityistothem.

Needlesstosay,thisdoesnotmeanthatitiseasytojudgehowwellheisperforminghistask.Butatleastthecriterionofperformanceisstraightforward,andthepersonsamongwhomavoluntarycontractualarrangementexistsareclearlydefined.

Ofcourse,thecorporateexecutiveisalsoapersoninhisownright.Asaperson,hemayhavemanyotherresponsibilitiesthatherecognizesorassumesvoluntarily–tohisfamily,hisconscience,hisfeelingsofcharity,hischurch,hisclubs,hiscity,hiscountry.Hemayfeelimpelledbytheseresponsibilitiestodevotepartofhisincometocausesheregardsasworthy,torefusetoworkforparticularcorporations,eventoleavehisjob,forexample,tojoinhiscountry'sarmedforces.Ifwewish,wemayrefertosomeoftheseresponsibilitiesas"socialresponsibilities."Butintheserespectsheisactingasaprincipal,notanagent;heisspendinghisownmoneyor

timeorenergy,notthemoneyofhisemployersorthetimeorenergyhehascontractedtodevotetotheirpurposes.Iftheseare"socialresponsibilities,"theyarethesocialresponsibilitiesofin-dividuals,notofbusiness.

Whatdoesitmeantosaythatthecorporateexecutivehasa"socialresponsibility"inhiscapacityasbusinessman?Ifthisstatementisnotpurerhetoric,itmustmeanthatheistoactinsomewaythatisnotintheinterestofhisemployers.Forexample,thatheistorefrainfromincreasingthepriceoftheproductinordertocontributetothesocialobjectiveofpreventinginflation,eventhoughapriceincreasewouldbeinthebestinterestsofthecorporation.Orthatheistomakeexpendituresonreducingpollutionbeyondtheamountthatisinthebestinterestsofthecor-porationorthatisrequiredbylawinordertocontributetothesocialobjectiveofimprovingtheenvironment.Orthat,attheexpenseofcorporateprofits,heistohire"hardcore"unemployedinsteadofbetterqualifiedavailableworkmentocontributetothesocialobjectiveofreducingpoverty.

Ineachofthesecases,thecorporateexecutivewouldbespendingsomeoneelse'smoneyforageneralsocialinterest.Insofarashisactionsinaccordwithhis"socialresponsibility"reducereturnstostockholders,heisspendingtheirmoney.Insofarashisactionsraisethepricetocustomers,heisspendingthecustomers'money.Insofarashisactionslowerthewagesofsomeemployees,heisspendingtheirmoney.

Thestockholdersorthecustomersortheemployeescouldseparatelyspendtheirownmoneyontheparticularactioniftheywishedtodoso.Theexecutiveisexercisingadistinct"socialresponsibility,"ratherthanservingasanagentofthestockholdersorthecustomersortheemployees,onlyifhespendsthemoneyinadifferentwaythantheywouldhavespentit.

Butifhedoesthis,heisineffectimposingtaxes,ontheonehand,anddecidinghowthetaxproceedsshallbespent,ontheother.

Thisprocessraisespoliticalquestionsontwolevels:principleandconsequences.Onthelevelofpoliticalprinciple,theimpositionoftaxesandtheexpenditureoftaxproceedsaregov-ernmentalfunctions.Wehaveestablishedelab-orateconstitutional,parliamentaryandjudicialprovisionstocontrolthesefunctions,toassurethattaxesareimposedsofaraspossibleinac-cordancewiththepreferencesanddesiresofthepublic–afterall,"taxationwithoutrepresentation"wasoneofthebattlecriesoftheAmericanRevolution.Wehaveasystemofchecksandbalancestoseparatethelegisla-tivefunctionofimposingtaxesandenactingexpendituresfromtheexecutivefunctionofcollectingtaxesandadministeringexpendi-tureprogramsandfromthejudicialfunctionofmediatingdisputesandinterpretingthelaw.

Herethebusinessman–self-selectedorappointeddirectlyorindirectlybystockholders–istobesimultaneouslylegislator,executiveand,jurist.Heistodecidewhomtotaxbyhowmuchandforwhatpurpose,andheistospendtheproceeds–allthisguidedonlybygeneralexhortationsfromonhightorestraininflation,improvetheenvironment,fightpovertyandsoonandon.

Thewholejustificationforpermittingthecorporateexecutivetobeselectedbythestockholdersisthattheexecutiveisanagentservingtheinterestsofhisprincipal.Thisjustificationdisappearswhenthecorporateex-ecutiveimposestaxesandspendsthepro-ceedsfor"social"purposes.Hebecomesineffectapublicemployee,acivilservant,eventhoughheremainsinnameanemployeeofaprivateenterprise.Ongroundsofpoliticalprinciple,itisintolerablethatsuchcivilservants–insofarastheiractionsinthenameofsocialresponsibilityarerealandnotjustwindow-dressing–shouldbeselectedastheyarenow.Iftheyaretobecivilservants,thentheymustbeelectedthroughapoliticalprocess.Iftheyaretoimposetaxesandmakeexpenditurestofoster"social"objectives,thenpoliticalmachinerymustbesetuptomaketheassessmentoftaxesandtodeterminethroughapoliticalprocesstheobjectivestobeserved.

Thisisthebasicreasonwhythedoctrineof"socialresponsibility"involvestheacceptanceofthesocialistviewthat

politicalmechanisms,notmarketmechanisms,aretheappropriatewaytodeterminetheallocationofscarceresourcestoalternativeuses.

Onthegroundsofconsequences,canthecorporateexecutiveinfactdischargehisalleged"socialresponsibilities?"Ontheotherhand,supposehecouldgetawaywithspendingthestockholders'orcustomers'oremployees'money.Howishetoknowhowtospendit?Heistoldthathemustcontributetofightinginflation.Howishetoknowwhatactionofhiswillcontributetothatend?Heispresumablyanexpertinrunninghiscompany–inproducingaproductorsellingitorfinancingit.Butnothingabouthisselectionmakeshimanexpertoninflation.Willhisholdingdownthepriceofhisproductreduceinflationarypressure?Or,byleavingmorespendingpowerinthehandsofhiscustomers,simplydivertitelsewhere?Or,byforcinghimtoproducelessbecauseofthelowerprice,willitsimplycontributetoshortages?Evenifhecouldan-swerthesequestions,howmuchcostishejustifiedinimposingonhisstockholders,customersandemployeesforthissocialpurpose?Whatishisappropriateshareandwhatistheappropri-ateshareofothers?

And,whetherhewantstoornot,canhegetawaywithspendinghisstockholders',cus-tomers'oremployees'money?Willnotthestockholdersfirehim?(Eitherthepresentonesorthosewhotakeoverwhenhisactionsinthenameofsocialresponsibilityhavere-ducedthecorporation'sprofitsandthepriceofitsstock.)Hiscustomersandhisemployeescandeserthimforotherproducersandemployerslessscrupulousinexercisingtheirsocialresponsibilities.

Thisfacetof"socialresponsibility"doctrineisbroughtintosharpreliefwhenthedoctrineisusedtojustifywagerestraintbytradeunions.Theconflictofinterestisnakedandclearwhenunionofficialsareaskedtosubordinatetheinterestoftheirmemberstosomemoregeneralpurpose.Iftheunionofficialstrytoenforcewagerestraint,theconsequenceislikelytobewildcatstrikes,rank--and-filerevoltsandtheemergenceofstrongcompetitorsfortheirjobs.Wethushavetheironicphenomenonthatunionleaders–atleastintheU.S.–haveobjectedtoGovernmentinterferencewiththemarketfarmoreconsistentlyandcourageouslythanhavebusinessleaders.

Thedifficultyofexercising"socialresponsibility"illustrates,ofcourse,thegreatvirtueofprivatecompetitiveenterprise–itforcespeopletoberesponsiblefortheirownactionsandmakesitdifficultforthemto"exploit"otherpeopleforeitherselfishorunselfishpurposes.Theycandogood—butonlyattheirownexpense.

Manyareaderwhohasfollowedtheargu-mentthisfarmaybetemptedtoremonstratethatitisallwellandgoodtospeakofGovernment'shavingtheresponsibilitytoimposetaxesanddetermineexpendituresforsuch"social"purposesascontrollingpollu-tionortrainingthehard-coreunemployed,butthattheproblemsaretoourgenttowaitontheslowcourseofpoliticalprocesses,thattheexerciseofsocialresponsibilitybybusinessmenisaquickerandsurerwaytosolvepressingcurrentproblems.

Asidefromthequestionoffact–IshareAdamSmith'sskepticismaboutthebenefitsthatcanbeexpectedfrom"thosewhoaffectedtotradeforthepublicgood"–thisargumentmustberejectedongroundsofprinciple.Whatitamountstoisanassertionthatthosewhofavorthetaxesandexpendituresinquestionhavefailedtopersuadeamajorityoftheirfellowcitizenstobeoflikemindandthattheyareseekingtoattainbyundemocraticprocedureswhattheycannotattainbydemocraticprocedures.Inafreesociety,itishardfor"evil"peopletodo"evil,"especiallysinceoneman'sgoodisanother'sevil.

Ihave,forsimplicity,concentratedonthespecialcaseofthecorporateexecutive,ex-ceptonlyforthebriefdigressionontradeunions.Butpreciselythesameargumentap-pliestothenewerphenomenonofcallinguponstockholderstorequirecorporationstoexercisesocialresponsibility(therecentG.Mcrusadeforexample).Inmostofthesecases,whatisineffectinvolvedissomestockholderstryingtogetotherstockholders(orcustomersoremployees)tocontributeagainsttheirwillto"social"causesfavoredbytheactivists.Insofarastheysucceed,theyareagainimposingtaxesandspendingtheproceeds.

Thesituationoftheindividualproprietorissomewhatdifferent.Ifheactstoreducethereturnsofhisenterpriseinordertoexercisehis"socialresponsibility,"heisspendinghisownmoney,notsomeoneelse's.Ifhewishestospendhismoneyonsuchpurposes,thatishisright,andIcannotseethatthereisanyobjectiontohisdoingso.Intheprocess,he,too,mayimposecostsonemployeesandcus-tomers.However,becauseheisfarlesslikelythanalargecorporationoruniontohavemo-nopolisticpower,anysuchsideeffectswilltendtobeminor.

Ofcourse,inpracticethedoctrineofsocialresponsibilityisfrequentlyacloakforactionsthatarejustifiedonothergroundsratherthanareasonforthoseactions.

Toillustrate,itmaywellbeinthelongruninterestofacorporationthatisamajoremployerinasmallcommunitytodevoteresourcestoprovidingamenitiestothatcommunityortoimprovingitsgovernment.Thatmaymakeiteasiertoattractdesirableemployees,itmayreducethewagebillorlessenlossesfrompilferageandsabotageorhaveotherworthwhileeffects.Oritmaybethat,giventhelawsaboutthedeductibilityofcorporatecharitablecontributions,thestockholderscancontributemoretochari-tiestheyfavorbyhavingthecorporationmakethegiftthanbydoingitthemselves,sincetheycaninthatwaycontributeanamountthatwouldotherwisehavebeenpaidascorporatetaxes.

Ineachofthese–andmanysimilar–cases,thereisastrongtemptationtorationalizetheseactionsasanexerciseof"socialresponsibility."Inthepresentclimateofopinion,withitswidespreadaversionto"capitalism,""profits,"the"soullesscorporation"andsoon,thisisonewayforacorporationtogenerategoodwillasaby-productofexpendituresthatareentirelyjustifiedinitsownself-interest.

Itwouldbeinconsistentofmetocalloncorporateexecutivestorefrainfromthishypocriticalwindow-dressingbecauseitharmsthefoundationsofafreesociety.Thatwouldbetocallonthemtoexercisea"socialresponsibility"!Ifourinstitutions,andtheatti-tudesofthepublicmakeitintheirself-interesttocloaktheiractionsinthisway,Icannotsummonmuchindignationtodenouncethem.Atthesametime,Icanexpressadmirationforthoseindividualproprietorsorownersofcloselyheldcorporationsorstockholdersofmorebroadlyheldcorporationswhodisdainsuchtacticsasapproachingfraud.

Whetherblameworthyornot,theuseofthecloakofsocialresponsibility,andthenonsensespokeninitsnamebyinfluentialandpresti-giousbusinessmen,doesclearlyharmthefoun-dationsofafreesociety.Ihavebeenimpressedtimeandagainbytheschizophreniccharacterofmanybusinessmen.Theyarecapableofbeingextremelyfarsightedandclearheadedinmattersthatareinternaltotheirbusinesses.Theyareincrediblyshortsightedandmuddle-headedinmattersthatareoutsidetheirbusinessesbutaffectthepossiblesurvivalofbusi-nessingeneral.Thisshortsightednessisstrikinglyexemplifiedinthecallsfrommanybusinessmenforwageandpriceguidelinesorcontrolsorincomepolicies.Thereisnothingthatcoulddomoreinabriefperiodtodestroyamarketsystemandreplaceitbyacentrallycon-trolledsystemthaneffectivegovernmentalcontrolofpricesandwages.

Theshortsightednessisalsoexemplifiedinspeechesbybusinessmenonsocialresponsibility.Thismaygainthemkudosintheshortrun.Butithelpstostrengthenthealreadytooprevalentviewthatthepursuitofprofitsiswickedandimmoralandmustbecurbedandcontrolledbyexternalforces.Oncethisviewisadopted,theexternalforcesthatcurbthemarketwillnotbethesocialconsciences,howeverhighlydeveloped,ofthepontificatingexecutives;itwillbetheironfistofGovernmentbureaucrats.Here,aswithpriceandwagecontrols,businessmenseemtometorevealasuicidalimpulse.

Thepoliticalprinciplethatunderliesthemarketmechanismisunanimity.Inanidealfreemarketrestingonprivateproperty,noindividualcancoerceanyother,allcoopera-tionisvoluntary,allpartiestosuchcoopera-tionbenefitortheyneednotparticipate.Therearenovalues,no"social"responsibilitiesinanysenseotherthanthesharedvaluesandresponsibilitiesofindividuals.Societyisacollectionofindividualsandofthevariousgroupsthey

voluntarilyform.

Thepoliticalprinciplethatunderliesthepoliticalmechanismisconformity.Theindi-vidualmustserveamoregeneralsocialinterest–whetherthatbedeterminedbyachurchoradictatororamajority.Theindividualmayhaveavoteandsayinwhatistobedone,butifheisoverruled,hemustconform.Itisappropriateforsometorequireotherstocontributetoageneralsocialpurposewhethertheywishtoornot.

Unfortunately,unanimityisnotalwaysfeasible.Therearesomerespectsinwhichconformityappearsunavoidable,soIdonotseehowonecanavoidtheuseofthepoliticalmecha-nismaltogether.

Butthedoctrineof"socialresponsibility"takenseriouslywouldextendthescopeofthepoliticalmechanismtoeveryhumanactivity.Itdoesnotdifferinphilosophyfromthemostexplicitlycollectivistdoctrine.Itdiffersonlybyprofessingtobelievethatcollectivistendscanbeattainedwithoutcollectivistmeans.Thatiswhy,inmybookCapitalismandFreedom,Ihavecalledita"fundamentallysubversivedoctrine"inafreesociety,andhavesaidthatinsuchasociety,"thereisoneandonlyonesocialresponsibilityofbusiness–touseitresourcesandengageinactivitiesdesignedtoincreaseitsprofitssolongasitstayswithintherulesofthegame,whichistosay,engagesinopenandfreecompetitionwithoutdeceptionorfraud."

©TheNewYorkTimes.Allrightsreserved.UsedbypermissionandprotectedbytheCopyrightLawsoftheUnitedStates.Theprinting,copying,redistribution,orretransmissionofthisContentwithoutexpresswrittenpermissionisprohibited.“TheSocialResponsibilityofBusinessistoIncreaseitsProfits”byMiltonFriedman.TheNewYorkTimesMagazine,September13,1970.

SupportingQuestion3

FeaturedSourceSourceB:BillMcKibben,articlequestioningthemotivesofcorporationspromotingcorporatesocialresponsibility,“Hypevs.Hope:IsCorporateDo-GooderyforReal?”MotherJones,November/December,2006

Tenpercentofatwo-year-old’snounsarebrandnames;bythetimeanAmericanchildheadstoschool,heorshecanrecognizehundredsoflogos.Disneyisnowputtingitscartooncharactersonfreshfruit,arguing(perhapscorrectly)thatit’stheonlywaytogetkidstoeatit.Ifthat’stheworldwe’reborninto,isitanywonderwewantcorporationstosolveourbiggestproblemsaswell?Isn’titaparent’sjobtoprotectus?Andbesides,whoelsehasthecapitalandthepowertodowhatneedstobedoneinthefaceofacrisislikeglobalwarming?Anysignthatcorporationsmightbewillingtotakeonthejobisgreetedwithanenthusiasmthatbordersondelusion.WhenJohnBrowne,theheadofBritishPetroleum[1],gaveaspeechin1997admittingthatglobalwarmingexists,andannouncingthatbusinessmustrespond“totherealityandtheconcernsoftheworldinwhichyouoperate,”peoplebegancallinghimthe“SunKing.”TheheadofCalifornia’sEnvironmentalProtectionAgencyventuredthat“thisboldmovewillsettheworldstageforothercompaniestoemulate.”BP[1]commissionedgreenroofsforitsfillingstations,alongwithawholeslewofadstoutingitsvisionforaworld“beyondpetroleum[1].”AndthereiseveryreasontothinkLordBrownewassincere—he’dstudiedtheproblem,knewitwasbig,andwaswillingtobucktherestoftheindustryinsayingso.Brownewasnottheonlyexecutivethinkingaloudabouthowcorporationsrelatetotherestoftheworld.Hiscommentscameasthedebateover“corporatesocialresponsibility,”longapreoccupationforpeopleinfuzzysweaters,wasabouttoexplodeintomainstreambusinessculture.Themovementhasnowspawnedaboomingindustryinconsultantsandconferences;justthissummertheWorldBusinessCouncilonSustainableDevelopmentissuedamanifestotitled“FromChallengetoOpportunity,”filledwithpicturesofbakingdesertsanddisease-strickenpeasants,butalsowithpromisesto“seekgreatersynergybetweenourgoalsandthoseofthesocietyweserve.”BPsignedon,andsodideveryonefromAdidastoProcter&Gamble.Whichisnice.Thequestionis,whatdoesitamountto?TakeBP.In2004,itsrevenuesfromsolarpowerwerealmost$400million;itstotalrevenues,almostentirelyfromhydrocarbons,were$285billion.Inotherwords,thecompanyhasgonebeyondpetroleumtothetuneofaboutone-sixthof1percentofsales(see“It’sNotEasyBeingGreen,”oppositepage).Andthenewsgetsworsefromthere.Theleakdisasterthatledtothissummer’ssuddenshutdownofBP’sAlaskapipelineturnsoutnottohavebeensuddenatall.Backin1992,whenawhistleblowerraisedconcernsaboutcorrosioninthepipeline,BPrespondedwithacorporatecrackdownthatafederaljudgesaidwas“reminiscentofNaziGermany.”Elsewhere,theWallStreetJournalreportsthatfederalregulatorsareinvestigatingwhetherBPtriedtoinfluencecrude-oilpricesusinginformationaboutitsOklahomapipelinesandstoragetanks;inaseparateprobe,investigatorsaretryingtofigureoutifBPgamedgasolinepricesontheNewYorkMercantileExchange.Meanwhile,thecompany’stopAmericanexecutivewascochairmanoftheBushreelectioncampaigninAlaska.Notveryfarbeyondpetroleum,that.Thereisnoquestionthatentrepreneurswithasocialbentcandoenormousgood—especiallyuntiltheydecidetogopublicorsellouttoalargercorporation.Andtheycandowellatthesametime,connectingwithareasonablylargeblockofmotivatedconsumers.IfIneedpapertowels,they’redamnwellgoingtocomefromSeventhGeneration.IwouldprobablywearPatagoniajacketseveniftheyweren’tsoincrediblywarm.Butthesetendtobeone-offdeals.BenandJerrydidn’tseemtochangethewayHäagenandDazsviewedtheworld.Somehow,BountyhasbeenwillingtoleavethethoughtfulpapertowelmarkettoSeventhGeneration.

Forseveraldecadesnow,environmentalistshavebeencitingtheworkofRayAndersonandInterface(see“TheCarpetCleaner,”Page56),andit’sagreatexample—butwhyistherestillonlyoneRayAnderson?Oftenthedifficultyisbuiltrightintoacompany’sbusinessmodel.ItmakesscantdifferencewhetherWal-Martstartsstockingorganicfoodornot,becausetherealproblemistheimperativetoshipproductsallovertheworld,selltheminvast,downtown-destroyingcomplexes,andpushpricessolowthatneitherworkersnorresponsiblesupplierscanprosper.(Infact,Wal-Mart’sdecisiontosellorganicfoodwillalmostcertainlymeanthefinalconsolidationoftheindustryintothehandsofafewhugegrowersthatshiptheirproduceacrossthousandsofmiles—nottomentionthatthepeopleringinguptheorganicgrocerieswillstillmakebelow-povertywagesandtaxpayerswillstillbefootingthebillfortheirhealthcare.There’ssomethinggrossaboutbuyingahealthycarrotfromasickcompany.)Bythesametoken,though,businessmodelscanpropelcompaniesforwardeveniftheCEOscouldn’tcarelessabouttheplanet:DowandDuPonthavecuttheircarbonemissionsbyupwardof50percentthisdecade,simplybecausetheirmanagersstartedtopayattentiontoenergycostsandfiguredoutthatefficiencywentstraighttothebottomline.“Willbusinesssavetheworld?”turnsouttobethewrongquestion.Therightquestionis“Howcanwestructuretheworldsothatbusinessesplaytheirpartinsavingit?”Andtheanswertothat,inevitably,ispolitics.Someofitisthepoliticsofpublicawareness.It’snoaccidentthatVermontandOregonarehotbedsofdo-goodcapitalism;intheseplacesattitudeshaveshiftedsothatconsciencepays.Manyofushaveworkedlikecrazytogetpeopleexcitedabout,say,hybridcars—and,aidedbyrisingoilprices,thepropagandahasbeguntosucceed.Butmostlyweneedpoliticsofamorestraightforward,andentirelyunglamorous,variety.Ifyouwantenergycompaniestorearrangetheirportfoliossothatwaymoremoneygoestorenewablesandwaylesstohydrocarbons,thebestwayforwardisnottoappealtotheCEO’sconscience—it’stopasslawstopushhimintherightdirection.ThisiswhathashappenedinEurope,whereregulatorstoldcarmanufacturerslastAugusttocutvehicles’greenhouseemissionsby25percent—orelse(seealso“TheMusclesFromBrussels,”Page62).“Thecarindustryshouldbeawarethatwearewatchingthesituationveryclosely,”oneofficialtoldreporters,addingthattheEU“willnothesitatetoreplacethecarrotwiththestick.”There’snothingparticularlyEuropeanaboutthatlogic—witnesstheeffortsintheUnitedStatesofafewboldstateattorneysgeneral,whointhefaceoffederalinactionhavebeguntosuemajorcarbonemittersontheirown.Theymaynotwin—butthethreatofliabilityhasalreadygottenbigpolluterstotalkaboutofferingvoluntarycarboncutsinexchangeforlegalimmunity.InanAugustreport,theinvestoractivistgroupCeresquotedaGoldmanSachsanalysisthatputpossibleglobalwarmingliabilityonthesamescaleasthefalloutfromasbestos.ThatkindofinformationwillgrabaCEO’sattentioninahurry.Helpingcorporationsdotherightthingthroughregulation—which,itshouldbenoted,alsolevelstheplayingfieldsothatagreenishBPdoesn’thavetoworryaboutadirtyExxon-Mobil—isnotexactlyanewidea.It’smoreorlesswhatweusedtodo,inthelongperiodfromTeddyRooseveltandthetrustbustersontoaboutthe1980s.Onereasonfortheshiftistheenormouspoliticalpowerofcorporations,whichtheyusealmostexclusivelytoboosttheirownprofits.Butinaway,youcan’tblamethemforthat.Thestrangepartishowlittleoppositionthecorporateagendameetsanymore—howmanyofushaveacceptedtheideologicalargumentthataslongasweleavecommercealone,itwillsomehow,magically,solveallourproblems.WecouldcompelBigOiltotakeitswindfallprofitsandbuildwindmills;insteadwestandquietlyby,asifunfetteredplunderweretheobviousandnecessarycourse.

Explainingthismysterymaybringusbacktowherewestarted.Inthechildlikeenchantmentwe’velivedundersincetheReaganera,we’vewantedverymuchtobelievethatsomeoneelse,somewavy-hairedCEO,woulddothehard,adultworkofproblem-solving.Infact,corporationsaretheinfantsofoursociety—theyknowverylittle

excepthowtogrow(thoughthey’reverygoodatthat),andtheyhowlwhenyousetlimits.Socializingthemistheworkofpolitics.It’sabouttimewetookitupagain.

AppendixA

StructuredAcademicControversy(SAC)Guidelines

Whatisit?Adiscussionthatmovesstudentsbeyondeither/ordebatestoamorenuancedsynthesisofadebatedissue.RationaleBythetimestudentsreachadolescence,manybelievethateveryissuecomesneatlypackagedinapro/conformat,andthatthegoalofclassroomdiscussion,ratherthantounderstandyouropponent,istodefeathim.TheSACmethodprovidesanalternativetothe“debatemindset”byshiftingthegoalfromwinningclassroomdiscussionstounderstandingalternativepositionsandformulatinghistoricalsyntheses.TheSAC’sstructuredemandsstudentslistentoeachotherinnewwaysandguidesthemintoaworldofcomplexandcontroversialideas.DescriptionTheSACwasdevelopedbycooperativelearningresearchersDavidandRogerJohnsonoftheUniversityofMinnesotaasawaytoprovidestructureandfocustoclassroomdiscussions.Workinginpairsandthencomingtogetherinfour-personteams,studentsexploreaquestionbyreadingaboutandthenpresentingcontrastingpositions.Afterwards,theyengageindiscussiontoreachconsensus.TeacherPreparation1. Chooseahistoricalquestionthatlendsitselftocontrastingviewpoints.2. Findandselecttwoorthreedocuments(primaryorsecondarysources)thatembodyeachside.3. Considertiming,makecopiesofhandouts,andplangroupingstrategies.ThetimeyouwillneedforaSACthat

usesaboutfourdocumentswilldependontheamountofexperienceyourstudentshavewiththeactivitystructureandthedifficultyandfamiliarityofthedocuments.PlanonusingabouttwoclassperiodsforyourinitialSAC.

IntheClassroomModifiedandadaptedcountlesstimesbyresearchersandteachers,thetechniquehasfivebasicstepswithprocedurestodisplayforstudents.

1. Organizestudentsintofour-personteamscomprisedoftwodyads.2. Eachdyadreviewsmaterialsthatrepresentdifferentpositionsonachargedissue.3. Dyadsthencometogetherasafour-personteamandpresenttheirviewstooneanother,onedyadactingas

thepresenters,theothersasthelisteners.4. Ratherthanrefutingtheotherposition,thelisteningdyadrepeatsbacktothepresenterswhatthey

understood.Listenersdonotbecomepresentersuntiltheoriginalpresentersarefullysatisfiedthattheyhavebeenheardandunderstood.

5. Afterthesidesswitch,thedyadsabandontheiroriginalassignmentsandworktowardreachingconsensus.Ifconsensusprovesunattainable,theteamclarifieswheretheirdifferenceslie.

CommonPitfallsStudents’debateframeworkstartsearlyandrunsdeep.Evenwhentoldthattheyneedtounderstand–notundermine–anopposingposition,studentswilltrytofindholesintheiropponent’spositionsandaimtorefutethem.Werecommend

• Introducingtheideaof“activelistening”toyourstudentsandhavingthempracticeitindyadsforafewminutes.

• Establishingtherule:Jotdownnoteswhenconfused,donotinterruptthepresenters.• Makingsurestudentscanrefertotheproceduresthroughouttheactivitybypostingthemormaking

handouts.

Asstudentsstarttoseeotherperspectivesandnuanceinthematerial,theabsenceofacertainanswermayconfusethem.Werecommendreassuringstudentsthatuncertaintyandcomplexityareexpectedduringthisactivity.Encouragethemtomakenotesthatspecifytheirconfusion,newideas,orquestions. ReprintedfromtheTeachingHistorywebsite.http://teachinghistory.org/teaching-materials/teaching-guides/21731.

12th grade corporate social responsibility inquiry should ... · the costs, benefits, and realities...

Documents

chapter 16 corporate responsibility performance … annual...

corporate responsibility content index - rbc cumulative...

corporate responsibility & inclusion patsy doerr global...

corporate social responsibility, corporate moral ... social...

corporate social responsibility (csr) - the fact's you...

corporate social responsibility: issues and implementation...

corporate responsibility

corporate social responsibility and bankruptcy …€¦ ·...

draft corporate social responsibility & accountability...

guidelines on corporate social responsibility and ... ·...

tsumura environmental and corporate social responsibility...

corporate social responsibility and ethical exchange ... ·...

corporate responsibility corporate - oecd...corporate...

fiscal 2011 corporate responsibility report our shared...

corporate social responsibility & sostenibilità€¦ ·...

corporate responsibility & sustainability report 2015...

corporate social responsibility reporting: a descriptive...

religare finvest limited corporate social responsibility...

corporate social responsibility report 2005 corporate social...

corporate responsibility report 2012 corporate...