Chapter 2: Corporate Social Responsibility (CSR)
CSR is about the relationship between the business and society and the degree to which
the business impacts on the society by not only focusing on profit and self-gain but also
showing their responsibility in building and supporting the community
Stakeholders have an expectation of what CSR the business gets involved in and these
expectations change and evolve over time as the needs of a community change.
Corporate Social Responsibility in a business context
Corporate social responsibility means:
The business is operating a profitable business while meeting society’s expectations by
supporting people and the environment
- Adding value to the society over and above selling goods/services to the community.
- Businesses are not required to implement CSR but if they do the business should act
in a socially responsible way without hurting their own success.
The king code:
The business must be a good corporate citizen and that the business actions show that
they care about society and the environment.
- Engage with all stakeholders to ensure all sustainability of society and the
environment.
- The business will only pretend to be a responsible citizen as long as it improves the
brand image of the business to gain customers which increase their profit.
Blowfield and Murray suggest that CSR is viewed as an umbrella concept that helps the
business to understand its stakeholders and to react and neutralise any negative effects
on the stakeholders
CRS issues:
- Crime - Poverty
- Lack of education - Unemployment
- Environment concerns - Poor health services
- Inequality - Poor housing
CSR has 2 levels of responsibility:
1. Primary responsibility
2. Secondary responsibility or Broader responsibility
• Primary responsibility- look after interests of stakeholders which are directly affected
by the success of the business; employees and shareholders
, • Secondary responsibility or broader responsibility- stakeholders who are indirectly
affected by the business activities; community, government and the environment
The Blowfield and Murray Pyramid
® Businesses use a pyramid to determine its level of responsibility
discretionary
responsibilty
ethical
responsibilty
legal
responsibility
economic
responsiblity
• Economic responsibility- responsible to ensure that its economically active eg it
produces good/services that can be sold at a profit from which employees and
shareholders will benefit.
• Legal responsibility- responsibility to ensure it is respecting the laws of the country in
with it operates in. by obeying the laws of the country the business is a responsible
citizen in the broader society.
• Ethical responsibility- ensure it is making ethically sound business decisions that will
not have a negative impact on stakeholders and a sustainable future if society and
environment.
• Discretionary responsibility- responsibility of not harming others. Consider how and
what and to whom of what the business will give back. Building a brand with values
and ensuring these values are being practiced by the business in all business activities
(internally and externally)
Arguments for and arguments against CSR
For/Pros/Benefits/ Advantages
• Receive greater support from the community which increases brand loyalty
• Business should act to support social issues so people remain in the area (often
people move away due to crime)
• If the business does it voluntarily there will be no need to make it law
• LSM increases (education and health programmes). The community has higher LSM
there will be more disposable income
• Sustainability and environmental programmes allow resources for future generations
• Business that operated sustainably are innovative enough to identify additional
avenues (opportunities) of income
• CSR initiatives implemented businesses are concerned about the impact on
stakeholders which promotes more ethical business practice
CSR is about the relationship between the business and society and the degree to which
the business impacts on the society by not only focusing on profit and self-gain but also
showing their responsibility in building and supporting the community
Stakeholders have an expectation of what CSR the business gets involved in and these
expectations change and evolve over time as the needs of a community change.
Corporate Social Responsibility in a business context
Corporate social responsibility means:
The business is operating a profitable business while meeting society’s expectations by
supporting people and the environment
- Adding value to the society over and above selling goods/services to the community.
- Businesses are not required to implement CSR but if they do the business should act
in a socially responsible way without hurting their own success.
The king code:
The business must be a good corporate citizen and that the business actions show that
they care about society and the environment.
- Engage with all stakeholders to ensure all sustainability of society and the
environment.
- The business will only pretend to be a responsible citizen as long as it improves the
brand image of the business to gain customers which increase their profit.
Blowfield and Murray suggest that CSR is viewed as an umbrella concept that helps the
business to understand its stakeholders and to react and neutralise any negative effects
on the stakeholders
CRS issues:
- Crime - Poverty
- Lack of education - Unemployment
- Environment concerns - Poor health services
- Inequality - Poor housing
CSR has 2 levels of responsibility:
1. Primary responsibility
2. Secondary responsibility or Broader responsibility
• Primary responsibility- look after interests of stakeholders which are directly affected
by the success of the business; employees and shareholders
, • Secondary responsibility or broader responsibility- stakeholders who are indirectly
affected by the business activities; community, government and the environment
The Blowfield and Murray Pyramid
® Businesses use a pyramid to determine its level of responsibility
discretionary
responsibilty
ethical
responsibilty
legal
responsibility
economic
responsiblity
• Economic responsibility- responsible to ensure that its economically active eg it
produces good/services that can be sold at a profit from which employees and
shareholders will benefit.
• Legal responsibility- responsibility to ensure it is respecting the laws of the country in
with it operates in. by obeying the laws of the country the business is a responsible
citizen in the broader society.
• Ethical responsibility- ensure it is making ethically sound business decisions that will
not have a negative impact on stakeholders and a sustainable future if society and
environment.
• Discretionary responsibility- responsibility of not harming others. Consider how and
what and to whom of what the business will give back. Building a brand with values
and ensuring these values are being practiced by the business in all business activities
(internally and externally)
Arguments for and arguments against CSR
For/Pros/Benefits/ Advantages
• Receive greater support from the community which increases brand loyalty
• Business should act to support social issues so people remain in the area (often
people move away due to crime)
• If the business does it voluntarily there will be no need to make it law
• LSM increases (education and health programmes). The community has higher LSM
there will be more disposable income
• Sustainability and environmental programmes allow resources for future generations
• Business that operated sustainably are innovative enough to identify additional
avenues (opportunities) of income
• CSR initiatives implemented businesses are concerned about the impact on
stakeholders which promotes more ethical business practice
