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Corporate Social Responsibility

Chapter 5

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Meaning of CSR

It is a form of corporate self regulation integratedinto a business model.

CSR policy functions is a built-in function

,whereby, a business monitors and ensures itsactive compliance with the spirit of the law,

ethical standards, and international norms.

In some models, a firm's implementation of CSR

engages in "actions that appear to further somesocial good, beyond the interests of the firm.

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Consumer Rights

The right to safety

The right to be informed

The right to choose The right to be heard

The right to satisfaction of basic needs

The right to redress

The right to consumer education

The right to a healthy environment

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Responsibility toward Consumers

Duty to inform fully

Duty to not misrepresent or withhold information

Duty to not force or take undue advantage

Duty to take due care to prevent foreseeable

injuries

Buyer beware vs. Seller take care

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Five Goals of Government Policy Makerstoward Consumers

1. Providing consumers with reliableinformation about purchases

2. Providing legislation to protectconsumers against hazardous products

3. Providing laws to encourage competitivepricing

4. Providing laws to promote consumerchoice

5. Protecting consumers privacy

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External Corporate Responsibility Areas

Advertising

Product Safety and Liability

Environmental concerns

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Ethics and Advertising

Whose rights are being protected orviolated intentionally and inadvertently?

At what and whose cost? Are consumers being justly and fairlytreated?

Are the public welfare and good taken intoconsideration for the effects as well as the

intention of advertisements? Has anyone been harmed, and can this

harm be proven?

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Advertising

Inform vs. persuade (two purposes

Deception: Mislead customers

Affect consumers behavior or decisions

Unfair: Substantial injury

Injury not outweighed by other benefits Injury is reasonably avoidable

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Conditions for Clear and ConspicuousDisclosures

The placement of the disclosure in anadvertisement

Whether items in other parts of theadvertisement distract attention from the

disclosure Whether the advertisement is so lengthy that

the disclosure needs to be repeated

Whether disclosures in audio messages are

presented in an adequate volume and visualdisclosures appear for a sufficient duration

Whether the language of the disclosure isunderstandable to the intended audience

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Pros and Cons of Advertising

Pros Informs consumers about

products Enables companies to be

competitive

Increases consumption andspending, which in turncreates economic growth

Helps a nations balance oftrade and debt payments

Customers pay for the imagesas well as the products

Consumers are not ignorant;they have freedom of choice

Cons Fine line between fairness

and deception

Targeting unsophisticatedbuyers (children and

youth) Intentional deception and

half-truths

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Product Safety and Liability

National Commission on Product Safetys steps toassess product safety:

How much safety is technically attainable,and how can it be specifically obtained forthis product/service?

What is the acceptable risk level for society,the consumer, and the government regarding

this product?Does the product meet societal and

consumer standards?

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Environmental Issues

Toxic air pollutionWater pollution and scarcityHazardous waste and land pollution

Laws:1. Air (Prevention and Control of Pollution)

Act, 19812. Environment (Protection) Act, 19863. Forest Conservation Act, 19804. Water (Prevention and Control of

Pollution), 1974

http://en.wikipedia.org/w/index.php?title=Air_(Prevention_and_Control_of_Pollution)_Act,_1981&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Air_(Prevention_and_Control_of_Pollution)_Act,_1981&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Environment_(Protection)_Act,_1986&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Forest_Conservation_Act,_1980&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Water_(Prevention_and_Control_of_Pollution),_1974&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Water_(Prevention_and_Control_of_Pollution),_1974&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Water_(Prevention_and_Control_of_Pollution),_1974&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Water_(Prevention_and_Control_of_Pollution),_1974&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Forest_Conservation_Act,_1980&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Environment_(Protection)_Act,_1986&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Air_(Prevention_and_Control_of_Pollution)_Act,_1981&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Air_(Prevention_and_Control_of_Pollution)_Act,_1981&action=edit&redlink=1

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Causes of Environmental Pollution

1. Materialistic cultural values.

2. Urbanization.

3. Population explosion.

4. New and uncontrolled technologies.

5. Industrial activities.

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Environmental Ethical Issues

Green Marketing

Environmental Justice

Industrial Ecology Rights of future generations

Right to a livable environment

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Questions for Managers Regarding EnvironmentalPolicy

1. How much is your company really worth?

2. Have you made environmental riskanalysis an integral part of your strategicplanning process?

3. Does your information system look outfor environmental problems?

4. Have you made it clear to your officers

and employees that strict adherence toenvironmental safeguarding andsustainability requirements are afundamental tenet of company policy?

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Five Stages of Environmental CorporateCommitment