Transcript Corporate Social Responsibility/Corporate Moral

The Difference There Is and the Difference That
Makes in Global Settings
Patricia H. Werhane
University of Virginia and DePaul University
“Corporate Social Responsibility”
as a Fig Leaf
CSR “is the obligation of decision makers to take
actions which protect and improve the welfare of
society as a whole along with their own interests.”
(Davis and Blomstrom, 1975, 23)
“The social responsibility of business encompasses the
economic, legal, ethical and discretionary expectations
that a society has of organizations at a given point in
time.” [Carroll, 1979, 500]
Problems:
 Focuses externally
 Reactive
 Discretionary
 Can be a cover-up
 Enron, etc.
CSR as an Umbrella
 …The responsibility of a
company for the totality
of its impact.”
(Chandler, 2001)
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To primary stakeholders
To other stakeholders
To culture and society
To those affected by
externalities
To the public sector
To Government(s)
NGOs
Ecosystem
The Globe! ?
CSR defined by Politeia
 The common way of thinking about CSR emphasizes
the moral obligations of the corporation toward
various stakeholders…”
 So here CSR = CMR: normative obligations – What
companies ought to do.
 ?Which stakeholders?
 Reciprocal nature of these obligations (Goodstein &
Wicks, Bowie, et.al.)
“Globalization has now
shifted into warp drive.”
That is, “the World is
[becoming] Flat.”
Tom Friedman
So…..
 IF CSR = CMR,
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How do we prioritize stakeholders in a global economy?
What are the relationships between business and society?
“Musts?” Obligatory – “oughts”? Discretionary?
 And IF “the world is flat” (the globalization thesis),
 How should we think or rethink about ideas of
CSR/CMR in a global economy?
A Stakeholder Map
Mass media
Pressure
groups
Local
communities
Shareholders
Employees
Corporate
management
Political
parties
Customers
Private
sector
Company
Professionals
Special interest
Groups
Governments
Suppliers
International
Organizations
NGOs
•
Slide Compliments of Klaus Leisinger, Novartis Foundation
SYSTEMS THINKING
 A truly systemic view considers how a set of
individuals, institutions, and process operates in
a complex network of relationships, an array of
individual and institutional actors with
conflicting interests and goals, and a number of
feedback loops. (Wolf, 1999)
 MNEs are complex open interactive enterprises
embedded in larger political, economic, legal,
and cultural systems that are able to affect and
be affected by various interactions and
unpredictable events. (Werhane, 2008)
Stakeholder Networks of Responsibilities in a Globalized Setting
Local
employees
Customer
Local Governments &
Political Systems
Global
employee
s
NGOs
Social
Norms &
Customs
Religious
influences
Corporation
Suppliers
Partners &
Competitors
Shareholders
Communities
The Four “Ps” Global Challenge
Population: 75-100 million
Purchasing power: > $20,000 USD
Tier
1
Tiers 2-3
The Bottom of the
Pyramid (BOP): Poverty,
Pollution and
Pandemics
Tier 4
1,500-1,750 million
$1,500-20,000 USD
$1,500 USD
4,000 million
Tier 5
< $1,500 USD
Adapted from: C.K. Prahalad and Stewart Hall, 2002. The Fortune at the Bottom of the Pyramid
CSR as an Umbrella Again?
 What are the limits of
CSR and/or CMR, that
is, Corporate
Responsibility in a
global economy?
 Are companies
responsible for
EVERYTHING and
EVERYONE they affect
internally and
externally worldwide??
 And what are the
reciprocal stakeholder
obligations in this
context?
NOVARTIS: We want to discover,
develop and successfully market
innovative products to prevent
and cure diseases, to ease
suffering and to enhance the
quality of life.
Novartis
Novartis and reciprocal obligations
 MUSTS: adherence to their mission, respect for
professionalism, patient responsibility, researcher and
employee commitment, shareholder input
 SHOULDS: Global citizenship, human rights, UN
Global Compact guidelines, etc.
 DISCRETIONARY: 5 year window for self-sufficiency
for philanthropic ventures having to do with health
care
NIKE
 …[W]e would build our business with all of our
partners based on trust, teamwork, honesty and
mutual respect. We expect all of our business
partners to operate on the same principles.

At the core of the NIKE corporate ethic is the
belief that we are a company comprised of many
different kinds of people, appreciating individual
diversity, and dedicated to equal opportunity for
each individual.
NIKE’S Code of Conduct
For Nike and its business partners
 Employee rights; to health, safety, compensation,
work hours & benefits
 Minimize environmental impact
 Dignity of individual and equal opportunity
 Anti: forced labor, child labor under 15
 Minimum wages, benefits, pay for overtime
 Limits: 60 hrs/week; 6 day work week maximum
 Employee information
 Transparency to inspection
Nike’s Alliance Model
Home
country
(U.S.)
Nike
Other Sports
Clothing cos.
Nike
Management &
Employees
Board of
Directors
Mission
& Code
of
Conduct
Customers
Environment
Suppliers & SubContractors
Communities
Country(s)
& Local
Traditions
Off-shore workers
Franchises
Media
Model Courtesy of
Mary Ann Leeper, COO,
Female Health Company
NGOs
CONCLUSION

CSR
CMR
CR
 Globalization weakens the ability to “outsource”—Fewer
externalities
 Globalization increases the need to prioritize corporate
responsibilities:
 Integration of Mission and code throughout
 “MUSTS” Do what company does best
 OUGHTS: follow guidelines of international codes of ethics and be
good corporate citizens
 Discretionary: philanthropy in areas of corporate expertise
Acknowledgement of parallel stakeholder reciprocal
responsibilities