Mgmt 405 Exam 1 Ch 2

(CSR) means that a corporation should be held accountable for any of its actions that affect people, their communities, and their environment.�

Is the power of business, especially in its power to create jobs and influence the lives of people.CSR implies that harm should be acknowledged and corrected if possible. It may require that a company forgo profits if its social impact hurts some stakeholders or if its funds can be used to have a positive social impact.

Business has tremendous power. By 2000, 200 companies had twice the economic power of 4/5 of humanity. �in the long run, those who do not use power in ways that society considers responsible will tend to lose it.�

Businesses initial response to the political, moral, and social demands of corporate social responsibility. It holds that �Business should give voluntary aid to society�s needy persons and groups�. Activities are corporate philanthropy and voluntary actions to promote the social good.

A more developed foundation principle of CSR, the Stewardship Principle holds that �Business, acting as a public trustee, should consider the interests of all who are affected by business decisions and policies.�

Activities are: 1) Acknowledging business and society interdependence 2) Balancing the interests and needs of many diverse groups in society.

There are many arguments in favor of CSR. Balances Corporate Power with responsibility.Discourages Government Regulation.Promotes Long-Term Profit for Business Improves Business Value and Reputation =

There are many arguments against CSR. Lowers economic efficiency and profits. Imposes unequal costs among competitors. (Make a firm less competitive as it adds costs not equally assumed.) Requires social skills business may lack. Places Responsibility on business rather than individuals.

This is a management focus which balances the economic, legal, and social responsibilities of business. The successful manager finds ways to meet each of these responsibilities, developing strategies to enable these obligations to help each other. Note that these initiatives may require the investment of profits in the short-term to generate the positive business benefits in the long-term.

Businesses that comply with laws and regulations are meeting a minimum level of social responsibility � following those laws mandated for all business. Note that public expectation of CSR is always a step ahead of the law, and that today�s expectation of corporate responsibility becomes tomorrow�s law or regulation.

�Refers to businesses acting responsibly toward their stakeholders.� This involves: Proactively addressing business and society issues. Building stakeholder partnerships. Discovering business opportunities through social strategic goals. Transforming a concern for financial performance into a vision of corporate financial and social performance.

This is a systematic evaluation of an organization�s social and ethical performance. It examines the social and ethical impact of a business against these benchmarks: A company�s own mission statement. The behavior of other organizations. Social norms.

= company reports to stakeholders. Financial Reports Environmental Reports Social Impact Reports This is a mechanism for companies to disclose meaningful non-financial information that impacts their financial results