Corporate Social Responsibility

Week 2: Corporate Social ResponsibilityLAW 480: Business, Law and Society Corporate Social Responsibility (CSR)Must business decision making include consideration not merely of the welfare of the firm but of society as a whole?

To what extent should businesses place a priority on social responsibility over basic profit seeking?Corporate Social Responsibility DefinedThe idea of social responsibility is that decision makers are obligated to take actions which protect and improve the welfare of society as a whole along with their own interests.Video: McDonalds Corporate Social Responsibility: Making progress http://www.youtube.com/watch?v+s_bgP3ASUM4Video: Mark Kramer (Founder of FSG Social Impact Advisors) on Corporate Social Responsibility www.articlesbase.com/videos/5min/294133989Kramers Definition of CSR What do you think about Kramers last point concerning governments taxing of discouraged behaviors?

How does what McDonalds is doing fit in with how Mark Kramer defines CSR?

What are the overall benefits to McDonalds for these efforts?The CSR Spectrum

Profit MaximizationDominant concern is maximizing shareholders interests. The only responsible and moral course of behavior is to reap the highest return possible. Milton Friedman: In a free economy there is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.Long Term Company Interest ModelA strong bottom line requires considerations beyond the immediate short-run, profit maximizing interests of the firm.

Maximizing a shareholders investment may still be a top priority.

But, a company must consider the needs and welfare of the employees, consumers, and community. Triple Bottom Line/Sustainability ModelRecognizes the necessity for financial success but also argues that the social and environmental responsibilities are of equal importance and that corporations giving close attention to those social and economic duties have a powerful competitive advantage that will contribute to both organizational and societal sustainability.Triple Bottom Line ContinuedBearableEquitableSustainableViableSocial (People):Community, philanthropy, employee satisfaction, fair treatment of customers, civil rights, diversityEnvironment (Planet): Energy, efficiency, waste minimization, conservation, recyclingEconomic (Profit):Reaping the highest financial returnsSocially Responsible BusinessThe textbook categorizes business practices into three categories:RequiredExpectedDesiredDo you agree with this representation? Why or why not?