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Lecture 4

ADM 1301 Lecture Notes - Lecture 4: Reputation Management, Investor Relations, Corporate Sustainability


Department
Administration
Course Code
ADM 1301
Professor
John Palmer
Lecture
4

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Chapter 7
Corporate Social Responsibility
Key Terms
Environmental: the natural environment
Social: the relationship between business and society
Economic: socio-economic and financial aspects
Stakeholder: stakeholders and stakeholder groups
Voluntariness: actions not prescribed by law
Key Elements of CSR
Corporations have responsibilities beyond the production of goods and services
These responsibilities involve helping to solve social problems
Corporations have a broader constituency than just stockholders
Corporations have impacts beyond simple marketplace transactions
Corporations serve a wider range of human values than just economic values
Case for CSR
11 Key Arguments
Business must satisfy society's needs.
CSR prevents public criticism and
government regulation.
Business and society are
interdependent.
CSR is good for the bottom line.
Investors and consumers support CSR.
Addressing social problems can become
financial opportunities (e.g., pollution
abatement).
Business should take long-term CSR
approach.
Social actions improve public image and
goodwill.
Business can solve problems as well as
government.
Proactive approach is better than
reactive.
Businesspeople are also concerned
citizens.
Case against CSR
9 Key Arguments
Profit maximization is the primary
purpose of business (e.g., Milton
Friedman).
Business is responsible to shareholders.
Social policy is role of government.
Business lacks training in social issues.
CSR would give too much power to
business.
Business involvement in social matters
increases costs.
No reliable guidance for business in CSR
matters.
Business cannot be held accountable
unlike social institutions.
There is divided support in business
community for social involvement.
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