Name: Popescu Vlad Aurelian

Matriculation number: 80132

Corporate Social Responsibility

In todays world, it is no longer just acceptable that a corporation does well by doing
good. It is expected. With increasing pressures on companies to be good corporate citizens,
business leaders face tough decisions.
The conceptualization of Corporate Social Responsibility starts with the definition.
Werther and Chandlers characterization of CSR is both a means and an end. From their point of
view , CSR is a means because it is an integral element of the firms strategy: the way a firm
goes about delivering its products or services to markets . CSR is also an end because it is a
way of maintaining the legitimacy of its actions in the larger society by bringing stakeholder
concerns to the foreground1.

That is why being socially responsible necessitates a focus on

business practices and the outcomes associated with this practices. Those outcomes are not
merely financial; rather, outcomes include sensitivity to the impacts on stakeholders. Along the
same lines, the European Commission ( EC) defines CSR as follows: A concept whereby
companies integrate social and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis 2.
A decisive question was raised by Milton Friedman: What responsabilities does a
business have ? His view was that the only legitimate purpose for a company was to create
wealth, pursuing their business effectively for the benefit of their customers, while providing a
profitable reward to their investors. It was only the role of the state, he believed, to provide the
legal framework that regulated companies behavior in relation to the rest of the community.
The debates are still continuing about companies responsabilities to their shareholders
and other stakeholders. On one side are those who argue, like Friedman, that a company has one
and only one objective: to make a long-term sustainable profit by satisfying customers for the
benefits of its owner, while acting within the law.
On the other side are those who believe that , because a company can and does affect the
interests and even the lives of people, it should take account of societal interests over and above
1

Werther W.B. & Chandler D. ( 2006). Strategic corporate social responsibility: Stakeholder in a global
environment. Thousand Oaks, CA:Sage, p.8
2
http://ec.europa.eu/growth/industry/corporate-social-responsibility/index_en.htm

those of the owners and beyond the specific requirements of the law. Moreover, some
commentators added that companies should be accountable or even responsible, to those affected
by their actions.
The most longstanding and authoritative voice in this debate is the management
professor Archie Carroll, from the University of Georgia who suggested probably the most
established and accepted model of CSR . It is a Four-Part Model of corporate social
responsibility . He presents

these different responsibilities within a pyramid. Social

responsibility requires the meeting of all four levels consecutively.3

Economic responsabilites ( required by society)
Companies have shareholders who demand a reasonable return on their investments,
they have employees who want safe and fairly paid jobs, they have customers who demand good
quality products at a fair price etc. This is by definition the reason why businesses are set up in
society and thus a companys first responsibility is to be a properly functioning economic unit
and to stay in business. This element of CSR is the basis for all subsequent responsibilities ,
which rest on this ideally solid basis. Satisfaction of economic responsibilities is thus required of
all corporations.
Legal responsabilities ( required by society)
The legal responsibility of corporations demands that business abide by the law and
play the rules of the game. Laws are understood as the codification of societys moral views,
and therefore abiding by these standards is a necessary prerequisite for any further reasoning
about social responsibilities. In some sens, one might consider legal responsibility as a truism ,
which corporations have to fulfil just to keep their licence to operate. However , one only needs
to open the business pages nowadays to see that the ongoing coverage of corporate scams,
scandals and lawsuits reveals that abiding by the law, not breaking the rules and not cutting
corners, can hardly be taken for granted in todays business world.
Ethical responsibilies ( expected by the society)
These responsibilities oblige corporations to do what is right , just and fair even when
they are not compelled to do so by the legal framework. For example , when Shell sought to
dispose of the Brent Spar oil platform at sea in 1995, it had the full agreement of the law and the
Brtitish government , yet still fell victim to a vigorous campaign against the action by Greenpace
3

Carroll, A.B. ( 1991). The pyramid of corporate social responsibility. Business Horizons, p. 38

as well as a consumer boycott. As a result, the legal decision to dispose of the platform at sea
was eventually reversed , since the firm had failed to take account of societys ( or at least the
protestors) wider ethical expectations. Carroll argues that ethical responsibilities therefore
consist of what is generally expected by society , over and above economic and legal
expectations.
Philanthropic resposibilites ( desired by society)
Lastly, at the tip of the pyramid, the fourth level of CSR looks at the philanthropic
responsibilities of corporations. The greek word philanthropy means literally the love of the
fellow human and by using this idea in a business context, the model includes all those issues
that are within the corporations discretion to improve the quality of life of employees, local
communities and ultimately society in general. This aspect of CSR addresses a great variety of
issues, including matters such as charitable donations, the building of recreation facilities for
employees and their families, support for local schools or sponsoring of art and sport events.
Philanthropic responsibilities are therefore merely desired of corporations without being
expected or required, making them somehow less important than the other three categories.

Characteristics of Corporation
Numerous factors should guide a corporations CSR efforts , and these factors can be
difficult to prioritize. However, the most obvious factor to consider is the corporation itself the
corporations mission and resources. The choice of particular CSR initiatives should be
consonant with the corporations mission, values, business goals and capabilities .4
In her book Body and Soul , Anita Roddick , explained her orientation to business
: Social and environmental dimensions are woven into the fabric of the company itself. They
are neither first nor last among our objectives, but an ongoing part of everything we do
When a corporation lacks an obvious starting point for exploring CSR , the
corporations leader can begin by assessing their current business resources, capabilities and
values. They can consider questions like the followings: What values guide the way the company
does business ? How are these values related to larger social and/or environmental concerns ?
What services or products are provided to customers ? How could groups in need benefit from

Roddick, A. ( 1991). Body and soul.New York: Crown Trade , p.23

the corporations outputs, including their expertise ? What does this corporation do well, and
how could these competencies relate to societal concerns ?

Another factor refers to the size of the corporation. Stakeholders might expect large
multinational companies to have better-developed CSR programs because their size translates
into access to more resources. They can draw upon a wide range of resources and personnel.
Moreover, large corporations may operate in numerous countries and may try to be responsive to
more diverse stakeholders. Stakeholders cannot realistically expect the same types of CSR
initiatives from small businesses that they expect from large MNCs. Smaller corporations can
engage in CSR but on a reduced scale and with reduced scope. The same strategic processes still
apply. But small local businesses may benefit from being particularly sensitive to their unique
circumstances, including their values, capabilities, employees, specific communities in which
they operate, and more localized social concerns such as particular educational needs,
recreational opportunities, local charities and so forth .
In addition to being driven by the corporations mission and values , CSR should be
driven by stakeholder expectations.
The stakeholder theory of the firm
It is probably the most popular and influential theory to emerge in the CSR area .
While the term stakeholder was first recorded in the 1960s, the theoretical approach was
mostly developed and presented by Edward Freeman ( 1984). The stakeholder approach begins
by looking at various groups to which the corporation has responsibilites. The main starting point
is the claim that corporations are not simply managed in the interests of their shareholders alone
but instead a whole range of groups, or stakeholders, have a legitimate interest in the corporation
as well.
Although there are numerous definitions as to who or what consititutes a stakeholder,
Freemans definition is perhaps the most widely used: A stakeholder in an organization any
group or individual who can affect , or is affected by the achievement of the organisations
objectives. To provide a more precise definition , Freeman suggests that we can apply two
principles. The first is the principle of corporate rights, which demands that the corporation has
the obligation not to violate the rights of others. The second, the principle of corporate effect,

Coombs Timothy W., Holladay Sherry J. ( 2012). Managing corporate social responsibility: A communication
approach, Wiley Blackwell, p.32

says that companies are responsible for the effects of their actions on others. In the light of these
two basic principles a stakeholder can be defined in the following slightly more precise way: A
stakeholder of an corporation is an individual or a group which either is harmed by, or benefits
from the corporation: or whose rights must be respected by the corporation.
This definition makes clear that the range of stakeholders differs from company to
company, and even for the same company in different situations, tasks or projects. Using this
definition, it is not possible to identify a definitive group of relevant stakeholders for any given
corporation in any given situation. However, it does exist a typical representation6

Government

Shareholders

Customers

Firm
Suppliers

Employees

Civil society

Stakeholder expectation and the importance of organizational identification

The stakeholder should be an inspiration for CSR and help identify the social issues that
underpin an organizations CSR efforts. CSR has evolved from from a fringe concern in
business to an inescapable priority for business leaders in every country . CSR now matters
because an increasing percentage of stakeholders decided social concerns were important enough
to influence their relationship with corporations. Investors began to place their money in social
responsible corporations while consumers began to seek products and services from companies
operating in a socially responsible manner. Making money is no longer the only benchmark for
evaluating a business contribution to society.

Judith Hennigfeld &Manfred Pohl ( 2006). Corporate Social Responsibility. John Wiley & Sons, Ltd., p.17

Experts agree that CSR activities must reflect stakeholder values and desires. The
social issue that comprise CSR needs to be meaningful to the stakeholders Communication is
essential to developing relationships with stakeholders. It is no coincidence that the concept of
stakeholder engagement has emerged as interest in CSR . Stakeholder engagement is a formal
conceptualization of listening to stakeholders and conducting formative research about CSR.
The salience of stakeholder expectation for CSR becomes clearer when we consider
the value of identification for CSR. Stakeholders identify with an organization when they see
some element of themselves in the organization. In turn, stakeholders are more likely to support
a corporation when they identify with that corporation. The identification is the sense of
attachment or connection consumers feel with companies engaging in CSR activities they care
about 7. Through the identification process, stakeholders realize part of their own identity is
reflected in the corporations identity.
The importance of internal stakeholder ( employees) should not be overlooked in
discussion of stakeholder concerns and the benefits of identification. Hopefully , employees
already experience some degree of identification with the corporation that may facilitate their
identification with CSR initiatives. But the fact that employees already have ongoing
relationships within the company should not lead their concerns and expectations to be
marginalized. In addition, it is especially important to inform them of specific CSR initiatives so
they will understand how those relate to their jobs and the company overall. However, a major
difference may relate to their perception of potential threats stemming from CSR initiatives.
Employees naturally are concerned about their jobs. If employees believe the corporations focus
on CSR could be detrimental to their jobs, they may experience uncertainty and fail to support
the CSR efforts. For example, jobs are contingent upon profits. Activities that detract from
profits may threaten job security. Similarly, CSR activities that lead to the elimination of
positions will not be welcomed by the employees. Thus, corporations should be sensitive to how
CSR iniatives may be perceived by employees and work to address their concerns.
ISO Standard
A new ISO standard on social responsibility was introduced in 2011 and marked a
significant development in the international recognition of the importance of CSR. ISO 26000

Bhattacharya C.B. , Sankar Sen ( 2004). Doing better at doing good: When, why and how consumers respond to
corporate social initiatives. California Management Review, p. 15

calls on companies to govern and manage their affairs with equity, honesty and integrity,
respecting the interest of all stakeholders affected by the companys activities.8
There are seven core subjects of ISO 26000:

Organizational governance

Human rights ( due diligence, avoidance of complicity, resolving

grievances, discrimination and vulnerable groups, civil and political rights, fundamental
principles and rights at work)

Labor practices ( employment relationships, conditions of work and social

protection, social dialogue, health and safety at work, human development and training at
the workplace)

The environment ( prevention of pollution, sustainable resource use,

climate change mitigation and adaptation, biodiversity and restoration of natural habits)

Fair operating practices ( anti-corruption, fair competition, promoting

social responsibility in the supply chain)

Consumer issues ( fair marketing, factual and unbiased information and

fair contractual practices, protecting consumers health and safety, consumer data
protection and privacy, consumer service, support )

Community involvement and development ( education and culture,

employment creation and skills development, technology development and access, wealth
and income creation, social investment).
Corporate Social Initiatives
Corporate social initiatives are defined as major activities undertaken by a corporation
to fulfill commitments to corporate social responsibility. There are many social initiatives, as
follows9:
Corporate Cause Promotions: A corporation provides funds, in-kind contributions, or
other corporate resources to increase awareness and concern about a social cause or to support
fundraising, participation. The corporation may initiate and manage the promotion of its own , it
may be a major partner in an effort or it may be one of several sponsors. Persuasive
communication is the major focus for this initiative, with an intention to create awareness and

8
9

Tricker B.(2012). Corporate Governance: Principles, Policies and Practices, Oxford University Press, p.236
Kotler P., Lee N. (2005). Corporate Social Responsibility: Doing the most good for your company and your cause. John Wiley&Sons, p.23

concern to a social issue and/or to persuade potential donors and volunteers to contribute to the
cause or participate in activities to support the cause.
Cause-related Marketing: A corporation commits to making a contribution or donating a
percentage of revenues to a specific cause based on product sales. In this scenario, a corporation
is most often partnered with a nonprofit organization, creating a mutually beneficial relationship
designed to increase sales of a particular product and to generate financial support for the charity.
Many think of this as a win-win-win relationship, as it provides consumers an opportunity to
contribute to charity as well.
Socially responsible business practices
A corporation adopts and conducts discretionary business practices and investments
that support social causes to improve community well-being and protect the environment.
Initiatives may be conceived of and implemented by the organization or they may be in
partnership with others. Key distinctions include a focus on activities that are discretionary, not
those that are mandated by laws or regulatory agencies or are simply expected, as with meeting
moral or ethical standards.
Corporate Philanthropy is a direct contribution by a corporation to a charity or a cause ,
most often in the form of cash grants, donations and/or in-kind services. It is perhaps the most
traditional of all corporate social initiatives and has historically been a major source of support
for community health and human service agencies, education and the arts, as well as
organizations with missions to protect the environment. The range of options for giving are
summarized as follows: providing cash donations, offering grants, awarding scholarships,
donating products, donating services, providing technical expertise, allowing the use of facilities
and distribution channels, offering the use of equipment.
Corporate Social Marketing: A corporation supports the development and/or
implementation of a behavior change campaign intented to improve public health, safety, the
environment or community well-being. The distinguishing feature is the behaviour change focus,
which differentiates it from cause promotions that focus on supporting awareness, fundraising
and volunteer recruitment for a cause.

Case study Corporate Social Responsibility of Toshiba Group

Toshiba is a $60 billion global company employing nearly 200 000 in 30 countries
around the globe. Yet they have an unwavering commitment to corporate social responsability .
This is a key underpinning of their management philosophy, advancing decisions that benefit the
environment and promote the welfare of their customers, employees and citizens of the world.
Toshiba Group s Corporate Philosophy emphasizes respect for people , creation of new
value and contribution to society. The Group slogan Commited to people, commited to the
future. TOSHIBA expresses the essence of the corporate philosophy10. They recognize that it
is their corporate social responsibility to put the philosophy and slogan into practice in their dayto-day business activities. As the Toshiba Group looks to become an enterprise trusted by
society, they have set up management principles respecting the human rights, creating new
values and contributing

to the lives and cultures of different countries around the world.

Toshiba Group Standards of Conduct

have thus been established in order to make the

management principles and management vision a reality and as a basis to guide the activities so
that they can operate under the principles of fairness, integrity and transparency and to contribute
to the formation of a sustainable society. Each of the directors, officers and employees of
Toshiba Group must comply with these standards.
Promoting Supply Chain CSR
The Toshiba Group Procurement Policy summarizes the requirements relating to
CSR and Toshiba Group procurement, and through this they require that their supplier give
consideration to human rights, labor, health and safety and the environment, including green
procurement. In 2012, they added a request not to use conflict mineral ( raw material that come
from a particular part of the world where conflicts are occuring ) to the policy and distributed it
across approximately 10 000 suppliers.11
In June 2011 they joined the Electronic Industry Citizenship ( EICC) , an organization
that promotes CSR in the electronic industry. They promote CSR in their supply chain in line
with the EICC code of conduct.

10
11

http://www.toshiba.com/csr/philosophy.jsp
http://www.toshiba.co.jp/csr/en/report/files/report2014_all.pdf

In order to strengthen their suppliers CSR management, they hold briefings and
monitor the implementation of CSR initiatives. In the year 2013, they conducted a survey
targeting some 5600 companies and requested them to perform self-checks. When issues were
found, they provided support and guidance on how to make improvements.
Environmental Management
Toshiba Group has developed Environmental vision 2050 as the corporate vision
under which they aim to realize a world in which people can enjoy affluent lifestyles in harmony
with the Earth by the year 2050. The vision require the Group to increase the degree of
improvement in overall eco-efficiency by ten times by 2050 against 2000 level. Toward that goal
they are now following Fifth Environmental Action Plan, which was initiated in 2012, in which
they promote four Green concepts Greening of process ( environmentally conscious
manufacturing ), Green of product ( creation of Environmental Management products with the
highest level of environmental performance), Green by technology ( low-carbon energy
technologies) and Green Management ( continuous improvement of basic activities). In this
Action Plan, they are further integrating business management and environmental management
in all business areas, and have set specific goals to ensure continuous business growth and reduce
environmental impacts.12
They aim is to achieve the highest level of environmental performance in all newly
developed products to reduce lifecycle environmental impact. The sales of ECP ( products that
have been certified by Toshiba as having the best environmental performance in the industry at
that time of product release) had an amount of 1.6 trillion yen in the year 2014. Results were
significantly higher than the planned 0.8 trillion by expanding certified products such as system
solution products.
Total greenhouse gas emissions were about 2.76 million tones CO 2 in the year 2014.
By actively promoting energy saving diagnostics and investment, the level of emissions lower
than the planned level of 3.92 million tones CO2, and has been reduced to less than half the 1990
level (6.76 million tones).

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Management based on ISO 26 000

Since Toshiba Group started issuing CSR reprt from the year 2004, they have worked
to promote CSR management and proper disclosure of information with hearing stakeholders
various concerns.
In 2009 they aligned their reporting with the seven core subjects of the ISO 26 000
Draft International Standard. In 2010 , they launched initiatives to integrate ISO 26 000 into their
overall management practices. In April 2012, a stakeholder dialogue between some of the
experts involved in the formulation of ISO 26 000 and members of Toshibas CSR Office was
held under the theme of essence of stakeholder engagement. The objective was to evaluate the
way Toshiba implemented stakeholder dialogues and engaged with stakeholders as well as to
examine how they should do in the future.
Since 2011, Toshiba Group has implemented the PDCA cycle, which consists of
checking, identification of issues, planning, action and evaluation based on the ISO 26 000
standard.
Consumer issues
Based on Toshiba Group Basic Policy on Product Safety13 , they are committed
to eliminating product accidents. In order to ensure customer safety, they comply with the
prevailing safety-related laws and regulations and proactively disclose full information to
customers. An employee who becomes aware of of information concerning a Toshiba product
accident must alert the division in charge of dealing with safety issues concerning the product in
question. In 2011 they created the Guidebook for preventing reoccurrence of accidents which
is a compilation of accident cases that have occurred since 2004 in Toshiba Group. The
Guidebook was distributed to division managers and meetings were hed to explain the content to
the persons in charge of quality issues in the Group in order to strengthen measures to prevent
reoccurrence of accidents. In November 2012, Toshiba Group was officially commended by a
Director-General for Commerce, Distribution and Industrial Safety Policy from the Ministry of
Economy, Trade and Industry as an outstanding company that excelled in taking product safety
measures ( the 2012 6th METI Mnisters Award for Best Contributions to Product Safety).
Also regarding the customer issues the utilization of customer voice is very important for
the company. They receive comments and requests for products and services and their daily
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operations, which are then shared among related personnel including top management who use
them to improve product quality and repair services.
Community relations
Toshiba Group employs approximately 210 000 people around the world. The jobs
created contribute to local communities, especially the production facilities which employ a
considerable number of local people. By paying taxes in accordance with national laws and
regulations, the company makes an economic contribution to the regions where they operate.
Philanthropic activity: used computer donation
In order to support the informatization of financially challenged organizations,
Toshiba has been donating pre-owned computers to welfare organizations and citizen groups
through a specified nonprofit organization. In 2013, a total number of 596 computers were
donated , which maks an accumulated total of 2 2267.14
Support for Recovery from Disasters
Toshiba group has been conducting relief activities for the earliest possible recovery and
reconstruction of the areas and people affected by the earthquake in Japan in 2011. Since
immediately after the accident at the Fukushima Daiichi Nuclear Power Station, Toshiba Group
has been working to the best of its ability to eliminate the consequences and ensure safety. First
of all, Toshiba Group worked to prevent the nuclear-contamined cooling water from flowing
into the ocean. Under high levels of radiation , they built and began operating a circulation
cooling system designed to purify and recycle . As a result, they were able to control the increase
in contamined water.

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Bibliography

Bhattacharya, C.B. & Sen, S. ( 2004). Doing better at doing good: When, why and how
consumers respond to corporate social initiatives. California Management Review

Carroll, A.B. ( 1991). The pyramid of corporate social responsibility: Towards the moral
management of organizational stakeholders. Business Horizons

Coombs Timothy W., Holladay Sherry J. ( 2012). Managing corporate social

responsibility: A communication approach, Wiley Blackwell

Hennigfeld, J. & Pohl, M. & Tolhurst N. (2006). The ICCA Handbook of Corporate
Social Responsibility. John Wiley & Sons , Ltd.

Kotler, P. & Lee, N. (2005). Corporate Social Responsibility. Doing the most good for
your company and your cause. John Wiley & Sons , Inc.

Roddick, A. ( 1991). Body and soul. New York: Crown Trade

Thompson , J.K. & Smith, H.L. ( 1991). Social Responsibility and small business:
Suggestion for research. Journal of Small Business Management,

Trickler, B. ( 2012). Corporate Governance: Principles, policies and practices. Oxford

University Press

Werther W.B. & Chandler D. ( 2006). Strategic corporate social responsibility:

Stakeholder in a global environment. Thousand Oaks, CA:Sage

Websites

http://ec.europa.eu/growth/industry/corporate-social-responsibility/index_en.htm

http://www.toshiba.com/csr/philosophy.jsp
http://www.toshiba.co.jp/csr/en/report/files/report2014_all.pdf

http://www.toshiba.com/csr/environment.jsp

http://www.toshiba.co.jp/csr/en/performance/social/pdctsafety.htm

http://www.toshiba.com/csr/social.jsp