CSR

Corporation
Features:
1. Legal status (corporations are separate entities in their own rights)
2. Perpetual sucession (can survive the death of any investor or stakeholder)
3. Ownership of assets (shareholders do not own the assets)
4. Artificial person (is considered at as person in they eye of the law)
5. Limited Liability (in case it fails, shareholders are not liable for corporations
debts)

Caroll four part model

1.Economic responsibilities : provide goods and services to society. Main
incentive is to make and maximize profit
2. Legal responsibilities : businesses are expected pursue their economic
framework within the law and regulations of the state
3. Ethical Responsibilities : businesses are also expected to follow norms,
standards and expectations, which arent codified in the law, that the shareholders,
employees, consumer and community regards as fair
4. Philanthropic responsibilities : businesses are expected to be good corporate
citizens. i.e promote programme for welfare and goodwill of the community. Eg :
Fund raising, Donating to charity

Arguments for / Against CSR

AGAINST
1. Moral responsibility. Corporation are not human being. Only humans have
moral responsibility. Thus individuals such as shareholders should be
responsible for the corporations actions
2.
3. Profit Making . Managers are employed to make profit for the company. They
are responsible to act soley in the interest of shareholders

4. States responsibility. Adresssing social issues is the job of the government.

Corporation mangers were not trained or elected democratically to decide what
in the best interest of society
5. Big companies v/s Small. CSR makes sense if a company has large
resources at their disposal and is making appropriate profits. It does not make
sense for a smaller company who needs to off workers to be contributing to
CSR.
6. Distracting for ethical questions. CSR activities undertaken by companies
like MC DONAL, BP OIL, BAT, gives them a positive reputation but distract the
public eye from the negative effects of their own operations.

FOR
1. Long term investment. Contributing to society leads to a better educated
and equitable community. Subsequently this can create a stable environment
in which the business can operate in the future.
2. Brand differentiation. CSR play a key role in creating customer loyalty
based on distinctive ethical values. Thus leading to a unique selling position
separate from competitors.
3. Risk Management. Reputation takes decades to build up and can be
crushed within hours by a single incident (environmental damange, scandals,
corruption). Building a good social culture can offset these risks.
4. Government independence. Voluntarily engaging into social activities can
prevent future legislations to be passed. Thus avoiding constant government
intervention and greater corporate dependence
5. Potential employees. Employees, within graduate markets, will be more
attracted to work for a company who is perceived in a positive light ethically
and have a good standing in the community.

Driving forces

1. Increased public expectations (social consciousness and awareness is

always growing within society)
2. Ecological sustainability (pressure from scientific agreements and
ecologists to be environmentally conscious)
3. Diminished trust in business ( due to the financial crisis etc.. businesses
are perceived badly. However they can gain the communitys trust back
through CSR activities)
4. Globalisation (Globalization has forced domestic firms to compete more
than ever (for exports to international makets like china, hongkong or

taiwan). Firms therefore use CSR to gain a competitive edge. And those that
want to remain competitive have to step up their CSR game as well)
Social Accounting
S.A is the voluntary process concerned with assessing and communicating
organization activities and impacts on social, ethical and environmental issues
relevant to their stakeholders. Much of the data reported is is qualitative in nature.
Why organizations engage in S.A
1. Internal/external pressures. From competitors, industry associations,
government, shareholders consumers, community and government.
2. Improved shareholder management. Provides a better channel of
communication for organizations to gauge the expectations of the
stakeholders and what they regard as important
3. Accountability and Transparency. Ensures that corporations are
answerable for the consequences of their actions, through evidence of their
social roles and impacts.
4. External influence. Since corporations influence their external
environment (positively and negatively) throught their actions, they should
account for these effects as part of their accounting practice.

What makes good social accounting?

1. Inclusivity. include Participation of all principal stakeholders. Involve 2 way
communication between them.
2. Comparability. report must be meaningful and comparable to different
periods and other organisations in the industry.
3. Completeness. All areas of the organization must be assessed. Not just well
performing ones.
4. Evolution. Demonstrate commitment to learning and change
5. Management policies. Must be in a system where it is easily controlled and
evaluated
6. Disclosure. Must be freely accessible to all stakeholders
7. External verification. Reports must be verified as a true representation of
reality by an external body
8. Continuous improvement a good social accounting should be able to
encourage the organization to continually improve. E.g Must demonstrate
that areas previously under assessed have been assessed

Unemployment
Unemployment occurs when a person who is actively searching for employment is
unable to find work.

How is unemployment socially distributed?

1. Young people (quit school early with no meaningful qualifications)

2. Old people (those approaching retirement find it harder for them to find new
job , or learn new qualifications at that age)
3. Lower class (they have a hard time networking with relevant people from
higher class who can land them a job)
4. Gender (man is the traditional breadwinner according to stats. married
women for eg. may not actively be looking for a job. Pregnant women may
prefer to work from home and having a hard time finding one)
5. Ethinicity ( member of the minority groups might be more affected that their
majority counter parts. e.g Pakistanis are more likely to be affected by
unemployment than their white counterparts.)
6. Region (those living in particular parts of a country that relies on a particular
industry not found in their area )
7. Disabled persons (46 % of disables that suitable jobs are unemployed and
do not know where to look for jobs)

Types of unemployment

1. Frictional. They are unemployed for a short time as they search for work (eg
graduates) or wait to take up a new position (change jobs).
2. Structural. Occurs when industries close down in large numbers and the
workers are unable to take up the jobs that are available elsewhere. This type
of unemployment may be sectoral or regional
3. Cyclical unemployment. The number of people exceeds the number of job
vacancies. It fluctuates according to booms and slumps periods of the
economy.
4. Seasonal unemployment. unemployment that exists within certain
industries as a result of fluctuations of the weather and seasons. (for e.g litchis
merchant operates only in December)
5. Technological change. Unemployment caused by the replacement of work
force by machinery and computers

6. De-industrialisation and globalization. Foreign competition places

domestic industries under extreme pressure. Organizations relocate their
activities in countries where it is cheaper to employ people and raw materials
are very much less expensive.

How does unemployment affect the society and individual?

Society
1. Mobility. Workers are less willing
to leave unsatisfying jobs
2. Division within society.
Can create racial tensions or tensions
between minorities (unemployed
workers blame immigrants for eg.)
3. Equality opportunity
Due to surplus of labour, employers do
not make effort to employ
women/old/disables
4. Bargaining power
Workers are insecure because they
might lose their jobs. They bargain less
for higher wages

individual
1. Health. Unemployed has proved
to aversively affect health
2. Financial effect. Obviously
unemployment lead to reduced
income
3. Lose more than Money. The
Unemployed loses interests to
develop new skills, be creative
and maintain relationship outside
the family.
4. Leisure time. Become
purposeless when you have a lot
of free time at your disposal
5. Anti-Social behavior. increase
potential of beling linked to
crime, drug use, drink abuse etc.
6. Psychological. Leads to
Anxiety and distress, denial,
depression
7. Disapproval of others. Are
perceived badly by working
members of society

Business ethics.

Improving and establishing the companys ethical climate?

1. Top management leadership geared towards moral management.

Visible actions from managers. Stress on communicating ethics as a vital part
of the organization. Use reward and discipline effectively.
2. Effective communication. Mangers need to be honest, sincere, fair and
free from prejudice and malice towards their workers. Avoid exaggeration and
uphold confidentiality when addressing issues.
3. Ethic programme and Ethic officers. Must implement ethics
programmes, training and initiatives. Should appoint officers to supervise and
maintain ethical practices in the workplace.
4. Setting realistic goals. E.g Upper Managers cannot expect a 25 %
increase in sales from the marketing manager when 15% percent is more
than necessary.
5. Codes of conducts. Establish a clear code of conduct and communicate to
all managers and employees in the organization
6. Disciplining violators. Appropriate sanctions should be taken for those not
respecting ethical standards
7. Whistle blowing mechanism. A proper system must be set up to report
injustice or other ethical violations in the work place. (e.g hotline) but must
be careful in case of false accusations.
8. Audit self-assessment. Ethical performance should be assessed and
compared throughout different periods to implement change where
necessary.
9. Transparency. Activities, processes, practices, and decisions that takes
place in companies become open or visible to the outside world.

10.
Ethical decision making. All unethical actions during the decision
making process of upper management must be considered then screened
out, and ethical actions screened in.

Influences on ethical decision making

Inviditual
Situational
1. Age/Gender (different age
groups have different ethical
beliefs. Men and women might
not have the same ethical
perceptions as well. Even
amongst the same gender it can
be different, e.g. feminists)
2. Natural and Cultural
characteristics
People of different nationalities have
different religions, beliefs, cultures.
Their background defines their ethical
views.
3. Education and Employment.
e.g research reveals that business
students not only rank lower in moral
management than other students such
as law, but are also more likely to
engage in academic cheating
3. Psychological factors.
People think differently. How they think
depends of their , how people actually
think depends on their cognitive moral
development and Locus of control,
which is unique to each individual.
4. Personal integrity. For
example, a person with high
integrity may blow the whistle

1. Issue related factors

It is important to decision makers
to determine the Moral intensity
(magnitude of consequences,
consensus, temporal effect etc..)
of an issue and how people in
different organizational contexts
might perceive it (moral framing)
2. Systems of reward and
authority
For e.g, many organizations offer
commission or bonuses for
salespeople but nor rewards for
ethical conducts.
3. Bureaucracy
bureaucracy frees the individual
from moral reflection and
decision making since he needs
to follow the prescribed rules.
Bureaucracy distance us from the
consequences of our actions.
Bureaucracy establishes specific
roles within the organisation
which defines how to relate and
behave to others
4. Organisational norms and
culture

about bad conditions in his

workplace to the media. Another
person might not report
anything. Integrity plays a big
roles in defining moral values of
the individual and hence his
ethical views.

Another powerful influence on

ethical decision making is the group
norms which d acceptable standards
of behavior within the work
community (e.g a workers may
agree among themselves that
pirating licensed software from work
for home is ok)

Good Governance
GG embodies characteristics that creates ideal governance. It assures that
corruption is minimized, views of minorities and the most vulnerable in society are
taken into account and heard during decision making. It is also responsive to future
needs of society. There are 8 characteristics of ideal governance:
1. Participation. Participation of Both men and women through either direct or
through legitimate intermediate institutions or representatives. Participation
must be informed and organized. This means freedom of association and
organized civil society.
2. Rule of the law. GG requires a fair legal framework that is enforced
impartially. There is full protection of human rights and requires an
independent judiciary and impartial police force.
3. Transparency. Information is freely available and accessible by those
concerned in the decision making.
4. Responsiveness. GG requires that insertions and processes serve
stakeholders within a reasonable time frame.
5. Consensus oriented. GG requires the mediation of the different actors in
society to reach a broad consensus of what is in the best interest of the
community.
6. Equity and inclusiveness. Societys well-being depends on ensuring that
all its member feel they have a stake in it and that they are not excluded. All
groups have opportunities to maintain and improve their well-being.

7. Effectiveness and efficiency. GG means processes produce results that

meet needs of society while making the best use of resources available.
(sustainable use of natural resources and protection of the environment)
8. Accountability. Not only governmental insitutions, but private sectors and
civil society must be accountable to the public and to their institutional stakeholders
Accountability cannot be enforced without transparency and rule of law.