1、1Business Ethics and Social ResponsibilityVic Saunders2What are Stakeholders?Stakeholders are those individuals or groups who depend on an organisation to fulfil their own goals and on whom,in turn,the organisation depends(Johnson et al 2011).3Stakeholders of a Large Organisation4Stakeholder Expecta
2、tionsDecisions taken by managers are influenced by stakeholders(CIM 2010).This poses a challenge as there are many different stakeholders with different,perhaps conflicting,expectations.Managers will need to take a view on:Which stakeholders have the greatest influence.What stakeholder expectations
3、do managers need to pay most attention to.i.To what extent the influence and expectations of different stakeholders vary.5Ethics Ethics is a branch of philosophy that deals with what is considered to be right or wrong.Business ethics addresses what can be regarded as morally right and wrong in the w
4、ay businesses make decisions and conduct their activities(Crane and Matten 2007).6How Does Business Ethics Relate to Corporate Social Responsibility(CSR)?An organisations core ethical values and standards should underpin everything that it does and the way its employees conduct their everyday busine
5、ss.Business ethics is about doing things ethically.How an organisation approaches the social and environmental impacts of its business operations and its voluntary contribution to the wellbeing of the global and local communities in which it operates,is often known as Corporate Social Responsibility
6、(CSR);it is often about doing ethical things.Can an organisation be responsible without a culture that is based on ethical values such as trust,openness,respect and integrity?7What is Corporate Social Responsibility?Corporate social responsibility(CSR)is concerned with the ways in which an organisat
7、ion exceeds its minimum obligations to stakeholders specified through regulation(Johnson et al 2011).8What is CSR?The entirety of CSR can be discerned from the three words contained within its title phrase:corporate,social,and responsibility.CSR covers the responsibilities corporations(or other for-
8、profit organisations)have to the societies within which they are based and operate.More specifically,CSR involves a business identifying its stakeholder groups and incorporating their needs and values within the strategic and day-to-day decision-making process.A business society within which it oper
9、ates,defines the number of stakeholders to which the organisation has a responsibility,may be broad or narrow depending on the industry in which the firm operates and its perspective.9What Business Areas Does CSR Cover?Ethics-discretionary actions.Strategic brand management-Brand building,Brand insu
10、rance.Stakeholder relations-Internal(employees)-External(suppliers,distributors,investors,NGOs,government,media,consumers).Crisis management.Community engagement.Community Relations.Day-to-day operations-Environmental sustainability,Workplace issues.Moral righteousness.External PR/ad-Meet consumer e
11、xpectations,Cause-related marketing.Corporate governance transparency,social auditsSRI(Sustainable and Responsible Investment).Diversity.Legislation and litigation.Cultural conflict.10Why is CSR relevant?Whilst it addresses the expectations of customers and shareholders/owners it also addresses the
12、expectations of the other stakeholders:Society at large.Community.The environment.Interest groups.11Key Drivers in CSR Environmental concerns.Globalisation and concerns for sustainable development in LDCs.Importance of global brands and corporate reputations.12Key Drivers in CSRChanging social expec
13、tations-Consumers and society in general expect more from the companies whose products they buy.This sense has increased in the light of recent corporate scandals,which reduced public trust of corporations,and reduced public confidence in the ability of regulatory bodies and organisations to control
14、 corporate excess.Increasing affluence-This is true within developed nations,but also in comparison to developing nations.Affluent consumers can afford to pick and choose the products they buy.A society in need of work and inward investment is less likely to enforce strict regulations and penalise o
15、rganisations that might take their business and money elsewhere.Globalisation-The growing influence of the media sees any mistakes by companies brought immediately to the attention of the public.In addition,the Internet fuels communication among like-minded groups and consumersempowering them to spr
16、ead their message,while giving them the means to co-ordinate collective action(i.e.a product boycott).13Why is CSR Important?CSR is an important business strategy because,wherever possible,consumers want to buy products from companies they trust;suppliers want to form business partnerships with comp
17、anies they can rely on;employees want to work for companies they respect;and NGOs,increasingly,want to work together with companies seeking feasible solutions and innovations in areas of common concern.“The 21st century will be the century of the social sector organisation.The more economy,money,and
18、 information become global,the more community will matter.”Peter F.Drucker,Founder of the Drucker Foundation14Key Issue is Sustainability Sustainability issues for the benefit of the global environment and society(and so organisational reputation).Sustainability issues for the survival of the organi
19、sation.15Key Issues in Sustainability Population pressure.Production and consumption.Globalisation.Global warming and climate change.Ozone depletion.Acid rain.Genetic engineering.Loss of habits and species diversity.16Impact on Organisations Importance of assessing the true social,ethical and enviro
20、nmental impact of its products/services.Higher profile of corporate values.Increased importance of sustainability of business and product/brand strategies.Increased significance of other stakeholder audiences for communications.Drawn into corporate governance as guardians of brand reputation.Crisis
21、management and contingency planning.17CSR&Corporate Brands Brands today are one of the key focal points of corporate success.Companies try to establish popular brands in consumer minds because it increases leverage,which is directly reflected in sales and revenue.All aspects of a companys operations
22、 today feed into helping build the corporate brand.Crucial is how a brand is perceived by all stakeholders(Fill 2010).18CSR&Corporate Brands Organisations have been making increasing use of corporate communications in order to make known their attitudes,policies and strategies towards their corporat
23、e responsibilities.This has been partly as a result of stronger regulatory and social pressures for organisations to be more transparent(Fill 2010).19CSR&Corporate Brands Positive marketing/brand-building BP BP,with a$200 million re-branding exercise,has effectively re-positioned itself as the most
24、environmentally sound and socially responsible of the extraction companies.The company stands in stark contrast today with Exxon Mobil that faces on-going NGO attacks,consumer boycotts,and activist-led litigation because of its decision to fight the environmental movement,and its failure to recognis
25、e the wider importance of CSR as a corporate strategy.N.B.This was until the BP Deepwater Horizon oil spill in the Gulf of Mexico 2010.20CSR&Corporate Brands Brand insurance NIKE NIKE has emerged as one of the most progressive global corporations in terms of CSR because it has learned from its past
26、mistakes and attacks by NGOs.As one of the first corporations to have a Vice-President for Corporate Responsibility and to publish an annual CSR Report,the company has done a lot to mitigate public opinion,establish its brand as representative of a much more committed corporate citizen,and insure it
27、self against any repeat of the consumer boycotts it faced in the mid-1990s.21CSR&Corporate BrandsTo a 2006 article in Business Week called Nike Goes Green,the company spent millions of dollars throughout a 14 year period to eliminate an environmentally harmful chemical that was being used in the hee
28、l of its Nike Air line of running shoes.To quote the article directly:“Nike sees the effort as part of a broader strategy to embrace social responsibility without compromising profits or product performance.”Also,according to another 2006 article called Nike:Not just doing it for themselves,Nike par
29、tnered with the United Nations as well as Microsoft to create a global awareness campaign called ninemillion.org.This campaign is aimed to increase awareness about young global refugees and raise money for education and refugee camps.Another direct quote:“Once viewed more as a silo function,managing
30、 risks and reputation,corporate responsibility is increasingly embraced throughout as a source of growth and innovation.”Although these are just two quick examples,they are enough to demonstrate that Nike has seriously responded to the harsh criticism it once received concerning CSR.It is important
31、to point out that Nike chose to remain relatively quiet about the positive changes it has made in terms of its strategies and initiatives.This displays a degree of humility within the company and the intentions for“good”CSR.On that note,I would also like to add that I did not come across any article
32、s relating directly to the issue of sweat shops22CSR&Corporate Brands There is a great deal of interesting material on the site that can be used to discuss corporate responsibility issues.The website,as well as various films and archived files such as Snake,demonstrates a number of issues about Shel
33、ls identity and how they are developing their brand.23CSR&Corporate BrandsVisit Identify what Shell are trying to say about their identity and how they are developing their brand.Explore the various ways in which Shell communicate their corporate social responsibilities.Confirm the perceived importa
34、nce that Shell have attached to their corporate responsibilities.24CSR&Corporate BrandsVisit Identify what easyJet are trying to say about their identity and how they are developing their brand.Explore the various ways in which easyJet communicate their corporate social responsibilities.Confirm the
35、perceived importance that easyJet have attached to their corporate responsibilities.25CSR&Corporate BrandsVisit Identify what Asda are trying to say about their identity and how they are developing their brand.Explore the various ways in which Asda communicate their corporate social responsibilities
36、.Confirm the perceived importance that Asda have attached to their corporate responsibilities.26CSR&Corporate BrandsVisit Identify what Virgin Atlantic are trying to say about their identity and how they are developing their brand.Explore the various ways in which Virgin Atlantic communicate their c
37、orporate social responsibilities.Confirm the perceived importance that Virgin Atlantic have attached to their corporate responsibilities.27Student ActivityExplore the sustainability and CSR issues your own organisations are facing.The focal point for discussion should be the process of identifying r
38、elevant issues and taking them into account when planning and managing marketing activities.Specific questions to explore might be:What does sustainability mean in the context of your company?How significant an issue is it for your company?What are the sustainability issues for marketing to address?
39、How important is corporate reputation to your company?If reputation is important in its own right,how might your company enhance its reputation?What ethical issues or threats might have a negative impact on your companys reputation?How might the company go about preparing a contingency plan to deal
40、with a crisis?What might marketings role and contribution be?What marketing activities are needed for the organisation to handle the issues identified above?28Student Activity In small groups discuss the extent to which your own organisations use techniques and policies such as CSR and ethics to sat
41、isfy stakeholders expectations and report back with your findings to the main group.The discussion should explore:Who are the key stakeholders and what are their expectations?What policies are there?Why do they use them?What practical difficulties have they faced in applying them?What lessons have they learned from applying them?
