Introduction to CSR
- 2. ORGANIZATIONAL FORMS For-profits seek gain for their owners; Governments exist to define the rules and structures of society within which all organizations must operate; and Nonprofits (sometimes called NGOs—nongovernmental organizations) emerge to do social good when the political will or the profit motive is insufficient to address society’s needs.
- 3. HOW ARE ORGANIZATIONS RELATEDTO SOCIETY Society exists as a mix of these different organizational forms. Each performs different roles, but each also depends on the others to provide the complete patchwork of exchange interactions (products and services, financial and social capital, etc.) that constitute a well-functioning society. Each of these groups or actors can claim to have a stake in the operations of the firm. Some benefit more, some are involved more directly, and others can be harmed by the firm’s actions, but all are connected in some way to what the firm does on a day-to-day basis.
- 4. STAKEHOLDERS “A stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization’s objectives” - R. Edward Freeman Stakeholder groups range from clearly defined consumers, employees, suppliers, creditors, and regulating authorities to other more amorphous constituents, such as local communities and even the environment.
- 5. KEY QUESTIONS What is the relationship between a business and the societies within which it operates? What responsibilities do businesses owe society to self-regulate their actions in pursuit of profit?
- 6. CSR A view of the corporation and its role in society that assumes a responsibility among firms to pursue goals, in addition, to profit maximization and responsibility among a firm’s stakeholders to hold the firm accountable for its actions.
- 7. CSR HIERARCHY To produce an acceptable return on its owners’ investment To act within the legal framework drawn up by the government and judiciary To do no harm to its stakeholders and within its operating environment More proactive, strategic behaviors that can benefit the firm and society, or both