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MGMT 1040 Chapter Notes -Corporate Social Responsibility, Toms Shoes, European Union Law

Course Code
MGMT 1040
William(bill) Woof

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Chapter 2 – Corporate Citizenship, Social Responsibility,
Responsiveness, and Performance
The corporate social responsibility concept ( CSR) “ consider your
actions not just as a self-interest but also actions that will affect society as a
whole because your actions should reflect the way society is affected by it”
The growth of CSR concept performs by looking at the obligations, actions and
Businesses don’t only have to purse their own self-interest to make a profit; they
should consider CSR as well
Historically; Adam Smith viewed CSR as “the invisible hand” your self-interest
could benefit society as a whole
Presently; we look at the stakeholder model and the more stakeholders we
analyze ( primary and secondary) the more we realize that we have CSR
Modification of the Economic Model
The CSR MODEL was seen in practice in these 3 areas ( philanthropy,
community obligation and paternalism)
Before mention “CSR” in the economy ; corporations still showed some
characters of CSR by philanthropy – which was about given charity and other
Community obligation: to improve the economy example: during or after war
everyone got involved in the community to make it a better place to be in
In the 1920’s starting to grow non profit business groups; doing things that are
not meant for just profit but doing them and organizing them in a sake of social-
1950’s to now modern area towards CSR gained more acceptance in
corporations (social and moral concerns)
So, what does CSR Really Mean?
The idea of social responsibility suppose that the corporation has not only
economic and legal obligations, but also certain responsibilities to society in
which extend beyond the obligation  this statement is attractive and detailed
This statement The social responsibility of business encompasses the
economic, legal, ethical and discretionary expectations that society has of
organizations at a given point of time

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The Economic responsibilities: REQUIRED BY SOCIETY
Business have responsibility in the economy
All businesses are in the economic system and therefore have economic
Companies think of product / services that could benefit society as a whole
Think of long-term financial investment – revenue, profit, investors, employees
We aim for a strong economic sustainability by making the right economic
decisions that should benefit consumers / producers as a whole
Legal Responsibilities: REQUIRED BY SOCIETY
Legal responsibilities for business are based on what society views as “code of
Businesses should accept the law and keep aware that law can change over time
and as long as the business is aware of what is going on than they should be
Laws are mandatory but not adequate
Ethical Responsibility: EXPECTED BY SOCIETY
About the norms, standards and values consider what consumers,
communities, employees consider what is to be fair and at same time
protects rights
Ethical responsibility will always continue to grow and more value will be put
into it
There is always going to be a high ethical expectations that companies need
to perform
Business need to understand different norms and business practices
Look at different moral philosophies that can be applied to ethical business
Philanthropic Responsibilities: EXPECTED FOR BUSINESS TO DO
Is additional behaviors and activities that society finds desirable and that the
values of the business supports. Like giving support to charities or community
Companies that are “ doing well by doing good”
You can research companies that are giving back to the communities

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Example of a company that do good: is when they give away money, offer
services, volunteer time to education, youth, health organizations, arts & culture,
neighbourhood improvements, programs etc.
Corporations always participate in fundraising
There is always an ethical motivation for companies to be involved and
sometimes they do it just so show society that they are Good Corporation and
therefore people should give back to the company by buying their products etc.
The pyramid of Corporate Social Responsibility:
Just looked at the 4 aspects of CSR and now you could learn how to make a
pyramid on pg ( 76.)
There is a specific order of the 4 aspects when drawing the pyramid
On the base (bottom) a) economic responsibilities b) legal responsibilities (its
also required to conduct what is right/wrong c) Ethical Responsibilities
( obligation to do what is fair) d) philanthropic ( be good)  this pyramid helps
managers make decisions and see their responsibilities to all 4 aspects
Look at critical issues you can connect different issues in the pyramid example: “
economic and ethic”
In order the 4 aspects can also be said: Make a profit, Obey the law, be ethical
and be a good corporate citizen
Listed below are some examples; of how to find companies that are socially
Make products that are safe
Commit to safe work practices
Recycle with the company
Protect employees rights
Promote energy conversation programs
Pgs. 78-88
Arguments against and for Corporate Social Responsibility
- Those who argue against CSR are not using the four-part definition presented
earlier in text, but they’re viewing it through a narrow view (i.e. the pursuit of
merely social goals)
Arguments against CSR
Classical Economics
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