2. Corporate Social Responsibility
Concensus Definition
Obligations of the firm to the society
Precise Definition
CSR is understood to be the way firms
integrate social, environmental and
economic concerns into their
values, culture, decision
making, strategy, operations n a transparent
and accountable manner and thereby
establish better practices within the
firm, create wealth and improve society
Concise Definition
Beyond law commitments and activities
pertaining to a wide range of programs
It Encompasses
► Corporate Governance and ethics programs
► Health, safety and environment programs
► Human and labor rights
► Human resource management policies
► Community involvement
► Respect for indigenous groups and minorities
► Corporate philanthropy and employee
volunteering
► Principles of fair competition, anti-bribery
and anti-corruption measures
► Accountability, transparency and
performance reporting
► Responsible supplier relations
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3. Mainstreaming
That the activity under consideration is
seen to be on the company’s agenda in
a legitimate, credible and ongoing
manner and it is incorporated into day-to-
day activities in appropriate and relevant
ways.
For something to be mainstreamed it
needs to be included in the company’s
Policy development
Technical tools
Performance measures
Political agenda setting processes
Coupled
(Well funded, Highly
visible, firm’s identity)
Decoupled
(Short term, easily
terminated, not
diffused in other
aspects)
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4. Human Rights
Principle 1: Businesses should
support and respect the
protection of internationally
proclaimed human rights
Principle 2: make sure that
they are not complicit in
human rights abuses
Labour
Principle 3: businesses should
uphold the freedom of association
and the effective recognition of
the right to collective bargaining;
Principle 4: the elimination of all
forms of forced and compulsory
labour;
Principle 5: the effective abolition
of child labour
Principle 6: the elimination of
discrimination in respect of
employment and occupation
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5. Environment
Principle 7: Businesses should
support a precautionary approach
to environmental challenges
Principle 8: undertake initiatives to
promote greater environmental
responsibility
Principle 9: encourage the
development and diffusion of
environmentally friendly
technologies.
Anti-corruption
Principle 10: businesses
should work against
corruption in all its
forms, including extortion
and bribery
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6. CSR Literature
•Focused on how customers respond to CSR at individual level
•CSR have positive effect on consumer's attitude
Research emanating
from Marketing
•Whether the firm should engage in CSR and its effect on
financial bottom line
•Positive relationship between CSR and profitability
•Jantzi Social Index
Research emanating
from Management
Literature
Different views on CSR
Milton Friedman’s View
► Maximize wealth
► Enterprise dependent and accountable to stakeholders
► Firms go through different stages of CSR: Elementary, transformational, value-led programs
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7. Vogel’s Conceptualization
CSR activity as a function of an external
market for virtue
Markets vary in their demand for CSR:
Socially conscious market& Social
Economic Market
Firms may vary in their inclination towards
CSR performance: CSR sensitive suppliers
& Business as Usual Suppliers
Existence of Heterogeneity in market
demand and supply
Society has created varying demand for
business virtue & firms have responded,
rewarded accordingly
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9. Business Case Model
CSR relevant when it translates to a competitive advantage to the firm
Characterstics
Existence of standards so that socially conscious consumers have a decision criteria
CSR does not raise the consumer’s price drastically
Enabled the company to leverage its core competence in a manner that expands the market for CSR
Mainstreaming CSR means aggressively pursuing business opportunities with a CSR dimension
CSR entrepreneurs in these firms only use economic arguments to advocate CSR
CSR efforts restricted to organizational silos where business case is clear
Employees perceived the firm’s commitment as less than genuine
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10. Social Values led Model
CSR defined around a particular social issue
Mainstreamed as a force that drove the organization
Noneconomic criteria and the stakeholders associated with them are dominant
Economic criteria and external market for virtue are irrelevant
It is a hybrid organization between for-profit and non-profit sectors
Social vision integral to the fabric of the firm right from inception
Establish authenticity of its business purpose and goals
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11. Syncretic Stewardship Model
Syncretism is combination of different beliefs or practice
Has constituents that impact profitability and social concerns
Encompass a larger and more diverse set of stakeholders
Often rife with paradoxes and contradictions
CSR narrative is complex, nuanced, negotiated
CSR Entrepreneurs need to be effective politicians and diplomats who can
negotiate, persuade and communicate among internal and external stakeholders
Motivation often appeared to be mixed – economic and noneconomic
Emphasis on how CSR impacts company culture
Striking a balance between demand and rewards for noneconomic vs economic criteria at
the individual and organizational level
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12. Feature Business Case Social Values led Case Syncretic Stewardship
case
Role of the external
virtual market
Dominant driver of CSR Secondary influencer of
CSR
Important, integrated
influencer of CSR
Role of the internal virtual
market
Weak in influencing CSR Dominant influencer of
CSR
Important, integrated
influencer of CSR
Objectives Economic Noneconomic Economic /
Noneconomic
Bottom Lines Financial Social/Noneconomic Balanced, mixed
Key Challenge Find nexus of business
opportunity and social
responsibility
Business viability Balancing economic and
noneconomic criteria
Narrative Competitive advantage Evangelism Interdependence
CSR Leadership
philosophy
Primacy of stockholders True-believer in social
cause
Servant of diverse
stakeholders
CSR Mainstream Orientations 12
13. SPICE (Society, Partner, Investor, Customer, Employee)
Social Model
S PICE
Business Case Model
PICE SS
I,E
C,P
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14. Internal Market for Virtue
The internal market for virtue
captured the extent and manner in
which CSR actions are
demanded, encouraged and
rewarded by senior managers and
board of directors as well as the
propensity of employees to
provide, supply or deliver on such
demand
Quantity of CSR
InternalpriceofCSR
Business Oriented
Syncretic steward
Value Led
Standard self interest
Social Entrepreneurs
Socially Conscious
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15. Degree to which performance improvement &excellence are rewarded
Business Case firms
• Rewarded for
achievement of economic
goals
Social Values led firms
• Rewarded for
achievement in non-
economic goals
Syncretic stewards
• Rewarded for balance of
economic and non-
economic goals
Business Case firms
• Considerable power
distance between the
company and non-profit
social partner
• The firm wielding power
Social Values led firms
• Counter intuitively, there
were power distance
differences
• Founder regarded as a
messiah-like person
• Founder wields power
Syncretic stewards
• Power distance low
• Participation by both
internal and external
stakeholders
• Increased employee
participation in CSR
initiatives
Performance orientation
Power distance
Degree to which members of a collective expect power to be distributed unequally
Cultures of CSR 15
16. Degree to which organizational members use norms, rules or procedures to alleviate unpredictability
Business Case firms
• Highest on uncertainty
avoidance
• Planned extensively, had to
produce quarterly results
• Followed well established
routines
Social Values led firms
• The lowest on uncertainty
avoidance
• Founders of the firms moved
forward with a strong sense
of mission not understanding
how to accomplish it
Syncretic stewards
• – low on uncertainty
avoidance
• Understood the possibility of
conflicting duties and
problems
• Relied on negotiations and
creative approaches to
problem solving
Business Case firms
• These firms put profits and
timelines before people
Social Values led firms
• High on human orientation
• Focus on people and their
quality of life high
Syncretic stewards
• High on human orientation
• Focus on people and their
quality of life high
Uncertainty avoidance
Humane orientation
Degree to which organization rewards individuals for being fair, altruistic and caring. It can be judged by
how the firm treats its employees, external stakeholders
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17. Degree to which individuals are confrontational or aggressive in their relationships
Business Case firms
• High on assertiveness
• Highly confrontational and
competitive internally, pitting
one group against the other
Social Values led firms
• Highly assertive when it came
to making decisions about
their focal issue, but were less
aggressive in their approach
Syncretic stewards
• Mixed and nuanced on
assertiveness
• Were less assertive while
dealing with stakeholders but
more assertive with the press
or industry trade groups
Business Case firms
• low on future orientation and
more short term in their CSR
planning
• They need to be flexible and
adapt to changing market
conditions quickly
Social Values led firms
• Mid-range in future
orientation
• Clearly understood their long
term challenge of dealing
with a major social issue
Syncretic stewards
• highest in future orientation
• Saw the importance of
stakeholder engagement as a
route to long-term legitimacy
and viability
Assertiveness
Future orientation
Degree to which organization encourages its members to plan for the future versus the present
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18. Cultures of CSR
Dimension of
organizational culture
Business Case Social Values led Syncretic Stewards
Performance High on Economic High on Noneconomic High on economic /
Noneconomic
Power Distance High Mixed Low
Uncertainty High Very Low Low
Humane Low High High
Assertiveness High High Mixed
Future Low Low to Medium High
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19. In Conclusion
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Many large public companies, at least in Europe and North American multi-nationals
are adopting the Syncretic Stewardship Model in stead of the Business case model
Firms internal market is playing a very crucial role in the way CSR is integrated and
mainstreamed into the regular operations of the company
In the long run, the companies following Business Case model need to look into the
social implications to stay socially relevant. Companies following the Social Values
model need to look into the financial sustainability of the project as well
Hence, we can conclude that to remain socially relevant and sustain the initiative
over a longer period of time, all the companies will soon start following the Syncretic
Stewardship Model