8. When firms participate in social causes, they add value to a firm’s resources. 9. If corporate social responsibility (CSR) resources are valuable and rare, even imitable resources will give firms a sustainable competitive advantage. 10. Activities based on corporate social responsibility always hurt the economic performance of a firm. 1.
Jun 26, 2011 · The business case for corporate social responsibility can be made. While it is valuable for a company to engage in CSR for altruistic and ethical justifications, the highly competitive business world in which we live requires that, in allocating resources to socially responsible initiatives, firms continue to consider their own business needs ...
a. Resources that are hard to imitate give firms a sustainable competitive advantage. b. Corporate social responsibility (CSR)-related resources are always rare. c. A firm's participation in social causes adds value to its resources. d. Complementary assets, by themselves, may enable a firm to fully utilize its CSR potential.
May 10, 2016 · The VRIO framework can shed considerable light on CSR: Value – Many large firms, especially MNEs, can apply their tremendous financial, technological, and human resources toward a variety of CSR causes. Social Issue Participation – Firms’ participation in social causes not directly related to the management of primary stakeholders Although social issue …
Management expert Peter Drucker argues that “the proper ‘social responsibility’ of business is to … turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.”.
The practice of corporate social reporting has been encouraged by the launch of the Global Reporting Initiative (GRI) in 1997-1998 and the introduction of the United Nations Global Compact in 1999.
As used in this section of the report, the term “competitive advantage” is best understood in the context of a differentiation strategy; in other words, the focus is on how firms may use CSR practices to set themselves apart from their competitors. The previous section, which focused on cost and risk reduction, illustrated how CSR practices may be thought of in terms of building a competitive advantage through a cost management strategy. “Competitive advantages” was cited as one of the top two justifications for CSR in a survey of business executives reported in a Fortune survey. [21] In this context, stakeholder demands are seen as opportunities rather than constraints. Firms strategically manage their resources to meet these demands and exploit the opportunities associated with them for the benefit of the firm. [22] This approach to CSR requires firms to integrate their social responsibility initiatives with their broader business strategies.
Synergistic value creation arguments focus on exploiting opportunities that reconcile differing stakeholder demands. Firms do this by “connecting stakeholder interests, and creating pluralistic definitions of value for multiple stakeholders simultaneously.” [33] In other words, with a cause big enough, they can unite many potential interest groups.
Strategic philanthropy helps companies gain a competitive advantage and in turn boosts its bottom line. [28] CSR initiatives enhance a firm’s competitive advantage to the extent that they influence the decisions of the firm’s stakeholders in its favor.
Why aren’t all businesses sole proprietorships or partnerships, instead of corporations? The answer is found in the concept of liability, which refers to the risk of loss for debts incurred by the business, or for damages caused by the business.
The first great benefit of corporations is that they provide an organized vehicle for pooling cash and capital from a large number of investors so that they can undertake major enterprises. Thus, one great stimulus to the growth of corporations was the rapid growth of international trade between 1400 and 1700 CE. In that era, sending a large vessel across the oceans was a major financial and logistical undertaking, which was also extremely risky; ships were often lost in storms. These early commercial ventures required such large capital investments that, at first, funding them was only within the reach of royalty. American schoolchildren are taught that the legendary explorer Christopher Columbus needed the royal patronage of Queen Isabella of Spain to support the voyages that led to the “discovery” of the New World. However, as new ocean trading routes were established and the vast potential for profits from trading spices became known, the first modern corporations were formed: the English East India Company, chartered in 1600, and its archrival, the Dutch East India Company, chartered in 1602. These companies are considered the world’s first multinational corporations, and they possessed most of the hallmarks of corporate structure that we see today.
Greenwashing refers to corporations that exaggerate or misstate the impact of their environmental actions. By the early 1990s a great number of consumer products were being promoted as “environmentally friendly,” “eco-friendly,” or “green,” when in fact there was little or nothing to justify the claims. In 1991, an American Marketing Association study revealed that 58% of environmental ads contained at least one deceptive claim. As a result, many advertising regulatory bodies around the world adopted specific advertising codes to regulate the honesty and accuracy of environmental claims in advertising. For example, in the UK, a producer of a recycling bin advertised that it helped buyers “save the rainforests” by encouraging recycling of plastic and paper products. The advertisement was found to be misleading because most paper products sold in the UK were not made from wood in tropical rainforests, but from wood harvested on northern European tree farms.
Since the laws and rules that may constrain corporations are written and enforced by the government, most corporations consider it of vital importance to seek influence over governmental regulators and lawmakers.
In Japan, the corresponding terms are KK (kabushiki kaisha) and YK (yūgen kaisha). All of these terms define two basic aspects of corporations: 1) their limited liability (which applies to all corporations), and 2) their status as a public or private company.
Investigators with the US Consumer Product Safety Commission (CPSC) prevented more than half a million violative and hazardous imported products from reaching the hands of consumers in the first quarter of fiscal year 2012.
Your close friend, Jane Goodie, is a college student who has registered to vote in her first election. Jane’s father has been a lifelong Republican voter and Jane’s mother a lifelong Democrat. As Jane grew up, she often listened to her parents debating politics at the dinner table. More than once, Jane found herself disconcerted and discouraged by the appearance of biased thinking on the part of one or both of her parents; they rarely seemed to agree or listen to each other in their political debates. Sometimes, Jane even wondered to herself, “Why do they vote at all, since their votes obviously just cancel each other out?” However, since her parents have strongly urged her to vote as soon as she is old enough, and since they have also urged to make up her own mind about which candidate to choose, she is looking forward to expressing her own views at the ballot box. But first she must make up her mind.
Not all markets and societies involve firms. In many medieval cities, most production was done by individual craftsmen who were loosely organized into guilds, or by tenant farmers who rented family-sized plots of land. Transactions took place primarily between individuals.
firm: A business enterprise, however organized. “Firm” is simply another word for company or business. The basic economic marketplace consists of transactions between households and firms. Firms use factors of production – land, labor, and capital – to produce goods that are consumed by households.
aggregate: A mass, assemblage, or sum of particulars; something consisting of elements but considered as a whole. In the most basic economic model, the economy consists of interactions between households, which provide labor and purchase goods, and firms, which employ labor and produce goods.
They may be organized in many different ways – corporations, partnerships, sole proprietorships, and collectives are all examples of firms. Economists who study the theory of the firm attempt to describe, explain, and predict the nature of a firm, including its existence, behavior, structure, and relationship to the market.
Governments can intervene by taxing negative externalities or subsidizing positive externalities. Free markets will generally produce less than the optimal amount when a good is nonexcludable and nonrivalrous, which means that a government can make the market more efficient by producing the public good itself.
An allocation of resources is Pareto efficient when it is impossible to make any one individual better off without making at least one individual worse off. For example, imagine that two individuals prefer peanut butter and jelly sandwiches to a sandwich with only peanut butter or only jelly.
While the advantages of consolidation for efficiency are potentially many and varied, the underlying concept is that integrating operational paradigms enables potential synergy via the construct of a firm. Firms also allow economic growth, not only for the firm but for the broader society in which it resides.
Sternberg argues that there is a human rights case against CSR, which is that a stakeholder approach to management deprives shareholders of their property rights. She states that the objectives sought by conventional views of social responsibility are absurd. Not all aspects of CSR are guilty of this, however.
If the arguments for a socially responsible approach were widely accepted , nobody would even using the label "CSR" because everyone would be doing it . Those of us who spend our time marshalling the case for would do well to spend a little time hearing the case against, and considering what should be the response.
Business has traditionally been beyond morality and public policy. We will do what we're allowed to do. We expect governments to provide the legal framework that says what society will put up with. There's no point, for instance, allowing smoking to remain legal - even making large tax receipt from it - and then acting as though tobacco companies are all immediately beyond the pale. If you think it's so dreadful, you should make it illegal. If not, then let us get on with the job of meeting the demand out there of adults who can choose for themselves.