Transcript MGT 610
Corporate Social Responsibility LECTURE 27: Corporate Social Responsibility MGT 610 1 Corporate Social Responsibility Chapter 7 SUSTAINABILITY AND ITS CHALLENGES 2 Corporate Social Responsibility LEARNING OBJECTIVES • Understand capitalism and the relationship between capitalism and sustainability • Understand the efforts to measure sustainability • Know the difficulties faced in the implementation of measurement frameworks 3 Corporate Social Responsibility • Globalization is not a passing trend • Impacting and shaping all aspects • Understanding of globalization should guide every activity that deals with socio economic factors • Globalization is based on the concept of capitalism • Capitalism needs responsible business as an ally • Lack of regulations resulted in capitalism becoming exploitative as greed for more increased • Socialism Vs Capitalism • It is apparent that a middle path is needed for sustainable development • Conspicuous consumption Vs annihilation of human freedom • Selfish exploitation of resources would result in lopsided growth in the society • Promoting restriction cannot be justified • Equality of poverty should not be the objective but a culture of hand holding should be encouraged 4 Corporate Social Responsibility • Capitalism • Business has to realize that they owe a social obligation • If the social system is destroyed in the rush for economic growth? • Capitalism promised freedom and a life that would be comfortable and self fulfilling • It answered the mans aspirations to move beyond the basic needs • To achieve this objective rationalism explained as self interest not selfishness soon replaced emotions and values • To judge a activity, ask a a question what would I gain? • Capitalism is based on the forces of supply and demand • Utilitarianism ethics is achieved when individuals are allowed self interest • Duty based morality is ignored and authority and persuasion is accepted • Example: tragedy of the commons • Capitalism and socialism failed to delivered the goods that they promised 5 Corporate Social Responsibility • Capitalism • In socialism freedom of spirit is more important than control, hence socialism failed and lost its enchantment • Capitalism has t reinvent – every one should enjoy their life as long as they take care that others enjoy the same freedom • Capitalism cannot depend on charity but it has to make ethical behavior mandatory for corporations • Build symbiotic relationship • Humanizing capital • Capitalism forgot interdependencies • Contrary to the belief of competition i.e. can never result in a win win situation • To make competition more endearing , level playing fields are created • The prerequisite of this field is collaboration that requires development of spirit of sharing • Business needs to have a human face • Based on trust • Freedom has to be used responsibly 6 Corporate Social Responsibility • Humanizing capital • This should be the driving force behind globalization • Improving the quality of life • Reality – globalization has resulted in disparity between the rich and the poor • CSR demands that the business embrace globalization to create a perfect world • Equal distribution • Transparent flow of information and products and human beings between the geographical borders • Capitalism and globalization cannot lead to economic and ethical imperialism • Lack of host countries stringent rules resulting from lack of resources • Guiding factor for business is the value foundation • List of moral rights that organization must practice as moral minimum • Rational empathy test 7 Corporate Social Responsibility • Corporations must realize that CSR is not charity and cannot work on Robin Hood principle • Pseudo NGOs • Don’t make profits the mantra • Sustainability will become an issue if that is the case • Human subdued to business rather than the other way • Danger of profits becoming the only driving force as long as business remains within rules • Who makes the rules and who monitors? • CSR cannot remain philanthropy but has to be woven • Capitalism has to look beyond materialistic world towards the human aspect 8