CSR Flashcards
Corporate Social Responsibility
Describes an approach whereby businesses seek to exceed basic legal requirements by considering their impact on society.
Satisfy Employees (CSR)
Job security, safe working conditions and fair wages.
Satisfy Customers (CSR)
Offer reliable products, fairly prices, exceeding legal safety requirements.
Satisfy Shareholders (CSR)
Increase share price and payment of stable and regular dividends.
Satisfy Suppliers (CSR)
Pay fair prices, make regular on-time payments and offer exclusivity.
Satisfy the Community (CSR)
Offer employment and funding restoration projects and community facilities.
Advantages of Corporate Social Responsibility
Can attract customers to the business and increase market share and sales revenue in the long-term.
Disadvantages of Corporate Social Responsibility
Increases a business’ costs through paying for initiatives, offering employees fair wages and agreeing to pay suppliers fair prices.
Carroll’s Corporate Social Responsibility Pyramid
Philanthropic
Ethical
Legal
Economic
First Responsibilities [E] (Carroll)
Fulfil its economic responsibility. Being profitable is the first step on the pyramid
Second Responsibilities [L] (Carroll)
Fulfil its legal responsibilities, for example, paying employees the national minimum wage.
Third Responsibilities [E] (Carroll)
Fulfil its ethical responsibilities; ethical responsibilities see a business making moral decisions.
Fourth Responsibilities [P] (Carroll)
Fulfil its philanthropic responsibilities; supporting society and the community through charitable events and sponsoring public facilities.
The Shareholder Concept
Businesses have a responsibility only to raise value for shareholders through increasing share prices and paying dividends and that profit maximisation is the only focus of the business.
The Stakeholder Concept
As well as satisfying shareholders’ needs, the business must place equal emphasis on satisfying the needs of all other stakeholders, including employees, customers and suppliers.
