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UNIT 4 CORPORATE SOCIAL RESPONSIBILITY

Task 1. Find the translation to the following words and expressions from the text and the video below:

Task 1. Read the text and answer the questions:

1. What/Who is a stakeholder in the context of an organisation?

2. How does corporate social responsibility (CSR) relate to 'enlightened self-interest'?

3. What are the three levels of impact that companies can have on society according to the text?

4. How does philanthropy differ from corporate social responsibility (CSR)?

5. Why is it important for organisations to differentiate between corporate activities contributing to society and charitable acts?

6. How has the practice of corporate philanthropy evolved over time, as mentioned in the text?

7. According to the text, what benefits can organisations gain from having a socially responsible

reputation?

Text “Sustainable business: corporate social responsibility (CSR)”

Individual members and groups in the community in which an organisation operates are increasingly being recognised as important stakeholders in the long-term security and success of large and small enterprises. Building relationships with these community groups is, therefore, an important issue in corporate and communications strategy.

Definition: A stakeholder is someone who has an interest (stake) in the organisation, which may be direct or indirect interest as well as active or passive, known or unknown, recognised or unrecognised.

Corporate social responsibility

A well-used business and management term, corporate social responsibility (CSR), is often associated with the phrase ‘enlightened self-interest’ – how organisations plan and manage their relationships with key stakeholders. CSR is, therefore, an organisation’s defined responsibility to its society(ies) and stakeholders. Although organisations are not a state, country or region, they are part of the infrastructure of society and as such they must consider their impact on it.

There are three levels of impact ranging from the basic in which a company adheres to society’s rules and regulations to the societal where a company makes significant contributions towards improving the society in which it operates. In the middle level, companies are perceived to manage their activities so they adhere to the level and go beyond it. For example, this might be a company obeying legal requirements on employment rights as a foundation and then providing more generous interpretations of these legal rulings. Also the company may seek to reduce the negative impact of the organization on its society without necessarily taking positive action to make improvements that would take it to level three.

Companies operating at the highest level, societal, exist: companies are increasingly obtaining public recognition and visibility for their positive corporate actions.

When considering CSR it is important to make a distinction between corporate activities that are intended to contribute to the society and charitable acts or philanthropy.

Philanthropy

One simple definition of philanthropy is that ‘corporations perform charitable actions’. This is very different from CSR, with philanthropy being a charitable act not necessarily linked to the expectations of society.

Definition: Philanthropy means ‘a love of humankind; practical benevolence especially charity on a large scale’ (Concise Oxford Dictionary 1995).

Definition: Corporate philanthropy is ‘a way of giving something back into local communities, improving quality of life for employees, and practicing corporate citizenship’ (Cutlip et al. 2000: 470).

Business case for corporate social responsibility: why be socially responsible?

Organisations in developed economies are today influenced by public opinion, shareholders, stakeholders (who can be shareholders, consumers and members of campaign

groups) and the political process. Consequently, organisations that ignore their operational environment are susceptible to restrictive legislation and regulation.

Is CSR good business practice? On the one hand, many companies profited from unethical practices in the early part of the twentieth century, as demonstrated by the success of textile and mining industries and more recently with companies manufacturing chemical-based products such as asbestos. Furthermore, Milton Friedman has been the consistent business voice stating that the business of business is simply to increase profits and enhance shareholder value. Friedman (1970) wrote key articles arguing these views in the 1960s and 1970s. Although there are few contemporary academic papers supporting his views, they are frequently cited as the opposing arguments to CSR.

On the other hand, in contrast to Friedman’s views, there are the examples of both old and new companies benefiting themselves, their stakeholders and employees through more ethically based practice.

Worldwide examples include Cadbury, Lever’s, IBM, Co-Operative Bank and Coca-Cola. Even before corporate responsibility became a boardroom agenda item around the turn of the millennium, there is evidence of its commercial value. For example, Johnson & Johnson’s chief executive officer, James Burke, demonstrates that companies with a reputation for ethics and social responsibility grew at a rate of 11.3% annually from 1959 to 1990 while the growth rate for similar companies without the same ethical approach was 6.2% (Labich 1992). Furthermore, arguments and evidence are emerging to support CSR’s contribution to the financial performance of organisations (Little and Little 2000; Moore 2003).

CSR can contribute to corporate image and reputation (Lewis 2003; Sagar and Singla 2004). The importance of a good reputation can include the following:

■ Others are more willing to consider the organisation’s point of view.

■ It helps to strengthen the organisation’s information structure with society and therefore improve resources in all areas.

■ It makes it easier for the organisation to motivate and recruit employees – and to promote increased employee morale (Lines 2004).

■ It will enhance and add value to the organisation’s products and services.

A socially responsible reputation is also a way of differentiating organisations and providing competitive advantage.

CEOs worldwide are starting to recognise that CSR is an important agenda item. Research by the India Partnership Forum (2003) shows that nearly 70% of CEOs say that CSR is

‘vital’ to profitability and that, irrespective of economic climate, it will remain a high priority for 60% of CEOs across the globe.

Organisational responsibilities to society

Business ethics writer Carroll (1991) argues there are four kinds of social responsibility: economic; legal; ethical; and philanthropic, demonstrated through the CSR pyramid.

To aid managers in the evaluation of an organisation’s social responsibilities and to help them plan how to fulfil the legal, ethical, economic and philanthropic obligations, Carroll designed a ‘stakeholder responsibility matrix’ (see Table 1). Carroll makes the clear distinction that social responsibility does not begin with good intentions but with stakeholder actions.

Carroll’s matrix is proposed as an analytical tool or framework to help company managers make sense of their ideas about what the firm should be doing, economically, legally, ethically and philanthropically, with respect to its defined stakeholder groups. In practice, the matrix is effective as it encourages the manager to record both descriptive (qualitative) and statistical data to manage each stakeholder. This information is then useful when identifying priorities in long- and short-term business decision making that involves the multiple stakeholder groups that influence most organisations. It enables these decisions to be made in the context of the company’s or organisation’s value systems – what it stands for – as well as accommodating economic, social and environmental factors. To express this simply, the manager is able to make decisions in a more informed way with a clear map of the numerous factors that will impact on these decisions. It is a detailed approach to stakeholder management but is one way of providing informed foundations about stakeholders to enable strategies, actions or decisions to be taken that reflect the complex environment in which most organisations operate.

Task 2. Read the text and decide if the statements are TRUE or FALSE:

1. The community members are now seen as crucial stakeholders in the success of businesses.

2. Building relationships with community groups is not a priority in corporate strategy.

3. A stakeholder is an individual with a direct or indirect interest in the organisation.

4. Corporate social responsibility is not linked to enlightened self-interest.

5. CSR is the responsibility of an organisation towards its society and stakeholders.

6. There are only two levels of impact in CSR.

7. Some companies are gaining public recognition for their positive actions at the highest CSR level.

8. There is no need to differentiate between corporate activities and philanthropy in CSR.

9. Philanthropy is when corporations engage in charitable actions.

10. Philanthropy was not common in large industrial firms in the UK during the nineteenth century.

Video “How to approach CSR in a sustainable manner”

(ttps://clck.ru/3BhysH)

Task 1. Watch the video and decide if the statements are TRUE or FALSE:

The interest in corporate social responsibility has decreased significantly.

The top 500 companies invest over $15 billion yearly in CSR.

Struggling companies often seek guidance on how to improve their behavior.

Setting up a concrete plan with clear targets is not necessary after identifying relevant goals.

One company had two reports, one focusing on CSR and the other neglecting CSR entirely.

The CSR process is continuous and involves ongoing challenges and opportunities.

Task 2. Watch the video and for each question 1-6, mark one letter (A, B. C or D) for the answer you choose.

1. What has driven the increased interest in corporate social responsibility and sustainability?

A. Increased government regulations

B. Growing consumer demand for responsible business practices

C. Pressure from activist groups and NGOs

D. The realization that it can benefit companies financially

2. The passage mentions the Sustainable Development Goals (SDGs) as a useful tool for companies to identify their main social impact. Which of the following examples is used to illustrate this point?

A. The "decent work" goal for clothing companies

B. The "climate" goal for oil companies

C. The "fisheries" goal for fish farming companies

D. All of the above

3. What is the first step in the five-step model for developing a successful CSR program, as described in the passage?

A. Launching the program

B. Implementing the program

C. Mapping the company's main social impact

D. Testing the program

4. In the process described in the passage, what is the purpose of the "testing" step?

A. To launch the plan and make the company aware of it

B. To get feedback from key stakeholders and revise the plan accordingly

C. To implement the plan and follow up on reaching the targets

D. To report on the results of the plan's implementation

5. According to the passage, what is the purpose of the "launching" step in the process?

A. To test the draft plan by getting feedback from key stakeholders

B. To make the rest of the company aware of the plan and get them to buy into it

C. To report on the successes and challenges of the plan's implementation

D. To ensure the plan is being properly implemented

6. Which of the following is NOT mentioned as a step in the five-step process for developing an effective CSR plan?

A. Seeking feedback from key stakeholders

B. Launching the plan and getting the rest of the company to buy into it

C. Measuring the financial return on investment of the CSR initiatives

D. Reporting on the progress and challenges of the CSR efforts

Task 2. Match the terms to their definitions.

Task 3. Complete the sentences with the words and phrases from task 1 and 2:

1. The partnership was seen as ______ relationship that did not benefit both parties.

2. Many companies today engage in _______________ activities to help the environment.

3. ______ strategy should align with the values of corporate social responsibility.

4. As _______________ in the project, I want to ensure that my interests are considered.

5. It is important for companies to adhere to ______ for ethical business conduct.

6. _______________ can influence the decisions of a company through voting at annual meetings.

7. Efforts to reduce ______ on its society include promoting eco-friendly products.

8. Acting with enlightened _______________ means taking into account the well-being of others.

9. Contribution to ______ can be influenced by stakeholder management.

10. _______________ matrix helps identify key groups affected by business decisions.

Task 4.

Task 4.1. Complete the table:

Task 4.2. Complete the following sentences with the correct form of the words from the table:

1. The company aims ______ its environmentally friendly practices. SUSTAINABLE

2. It is important for businesses to be socially ______ in their actions. RESPONSIBILITY

3. ______ to ethical standards is crucial for a company's reputation. ADHERE

4. The team will need ______ a charity event next month. ORGANISATION

5. Improving employee ______ can positively impact CSR initiatives. PERFORM

6. Every employee should ______ to the company's CSR efforts. CONTRIBUTION

7. Continuous improvement is essential for the ______ of CSR practices. ENHANCE

8. The CEO stated that it is time ______ upon the sustainability targets. ACTION

9. ______ discussed the importance of CSR with the employees. MANAGE

10. Employees are encouraged ______ environmentally friendly behaviours. PRACTICE

Task 5

Task 5.1. Match to make expressions:

Task 5.2 Complete the sentences with the words/phrases above:

Around the turn ______ companies started focusing more on social responsibility.

______ into local communities is a key aspect of corporate social responsibility.

Building relationships with ______ is essential for effective corporate social responsibility initiatives.

______ a small business owner's ideas about ethics is important.

A reputation for ethics ______ can attract customers to the business.

______ in charitable donations shows commitment to corporate social responsibility.

Having an interest ______ helps individuals contribute to social responsibility efforts.

______ image and reputation positively impacts social responsibility efforts.

Being vital ______ is essential for maintaining corporate social responsibility.

______ long-term business decision making is crucial for corporate

Task 5.3. Paraphrase the sentence so that it has the same meaning as the first. Use the words given:

1. Employees and shareholders have a vested interest in the company's success.

INTEREST (STAKE)

Employees and shareholders ______ .

2. The company is well-known for its commitment to ethical practices and social responsibility.

REPUTATION

The company ______ and social responsibility.

3. Maintaining high-quality customer service is crucial for the company's success.

VITAL

Maintaining high-quality customer service ______.

4. The philanthropist donated large amounts of money to various causes.

CHARITABLE

The philanthropist ______.

5. The corporation aimed to support the neighborhoods where it operated.

GIVE SMTH BACK

The corporation aimed ______.

Task 6. Unjumble the sentences:

active / company’s / image / community / the / in / projects / participation / enhances

corporate / causes / donating / money / involves / charitable / to / resources / philanthropy / or

ethics / responsible / business / reputation / socially / a / for / maintaining / is / important

of / is / CSR / for / crucial / implementation / managerial / successful / support / policies

to / volunteer / aims / through / community / work / the / the / contributions / significant / company / make / to

Task 7. Translate the sentences into English, paying special attention to the words of Focus Vocabulary:

Компания верит в корпоративную социальную ответственность и регулярно поддерживает местные благотворительные организации.

Филантропические усилия компании фокусируются на поддержке инициатив в областях образования и здравоохранения.

Малые и средние предприятия (МСП) играют жизненно важную роль в инициативах, связанных с корпоративной социальной ответственностью.

Команда менеджеров решила предпринять позитивные корпоративные действия, внедрив программу переработки (утилизации).

Чтобы повысить акционерную стоимость, бизнесы (компании) должны обдумать свои действия в отношении корпоративной социальной ответственности.

В мире бизнеса просвещенный эгоизм может привести к более устойчивым

практикам.

Группы заинтересованных лиц оказывают значительное влияние на стратегии корпоративной социальной ответственности.

Устойчивые методы ведения бизнеса существенны для долгосрочного успеха и положительного влияния на окружающую среду.

Общественной деловой практикой является использование матрицы ответственности заинтересованных сторон в рамках корпоративной социальной ответственности.

Корпоративное гражданство означает быть активным членом сообщества.

Task 8. List examples of what you might consider to be CSR or philanthropic actions by an organization/company.

Can you make distinctions between the two? Think about each organisation’s objectives for the action. What was the intended outcome? What did it hope to achieve? Was it long term? Was it pre-planned or response to an individual(s) request?

Task 9. Choose an organization and define its stakeholders.

How would you prioritise these stakeholders in terms of their importance to financial performance for the organization? Financial performance is important for all organisations but this prioritized list may look different if instead it were arranged according to CSR performance towards stakeholders.

Task 10. Think about the following:

Managers are the key to ethical business practice as they are the potential role models for all employees, customers, suppliers, etc. and also the endorsers of ethical policies. Due to changes in management practice, business process reengineering and the downsizing of western companies, many modern businesses have fewer managers today – yet each manager has more staff to control:

How should organisations be ethical? Identify three or four reasons. Divide these reasons into those that are linked to financial gain and those that are societally sympathetic.

Are employees attracted to ethical employers? Give reasons why you believe they may or may not be.

List those companies you would be proud to work for and those that you would be ashamed to be employed by or represent. What are the key features of CSR policies of each? What are the similarities and differences?

Prepare a presentation to deliver in class.