Transcript External stakeholders - @@ Home

EXTERNAL STAKEHOLDERS
Who are external stakeholders
for the company?
External Stakeholders
 Customers/ consumers
 Suppliers/ distributors
 Communities/ Society
 Competitors
 Governments
 Environment
You are a corporation, what can
you do as corporate
responsibilities for these
external stakeholders?
External Stakeholders
 Customers/ consumers
 Suppliers/ distributors
 Communities/ Society
 Competitors
 Governments
 Environment
External Stakeholders, Moral Stakes, and
Corporate Responsibilities
Source: Based on the Caux Round Table’s Principles for Business. The principles are printed in
Business Ethics magazine, 52 S. 10th St. #110, Minneapolis, MN 55403.
Responsibility toward
Consumers
 Duty to inform fully and truthfully
 Duty not to misrepresent or withhold
information
 Duty not to force or take undue advantage
of through fear or stress
 Duty to take “due care” to prevent
foreseeable injuries
Consumer Rights
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Right to safety
Right to free and rational choice
Right to know, access information
Right to be heard (complain)
Right be to compensated for harm
Advantages for Being A Socially
Responsible Firm?
Competitive Advantages for
Socially Responsible Firms
1. Reputation
2. Successful social investment portfolios
3. Ability to attract quality employees
What is Corporate Social
Responsibility (CSR)?
Corporate Social
Responsibility (CSR)
 Or Corporate Citizenship: imply that the
organization is a responsible “citizen” in
meeting all its obligations.
 Or Corporate Conscience: imply that the
organization is run with an awareness of its
obligations to society
 CSR = the actions of an organization that are
targeted toward the achievement of a social
benefit beside maximizing profits for its
shareholders and meeting all its obligations
Corporate Philanthropy (Corporate Giving)
 It’s a part of corporate social responsibility
(CSR), it is the act of donating money, goods,
services, time and/or effort to support a
socially beneficial cause, with a defined
objective and with no financial or material
reward to the donor.
(from: http://en.wikipedia.org)
3 Major Types of CSR:
1. Ethical CSR
2. Altruistic CSR
3. Strategic CSR
Ethical CSR
 Represents the purest type of CSR where the
org. pursue a clearly defined sense of social
conscience in managing their financial
responsibility to shareholders, their legal
responsibilities to their local community and
society as a whole, and their ethical
responsibilities to “do the right thing” for all
their stakeholders.
Ethical CSR
 It is mandatory and means that a firm must
obey all laws and avoid doing harm as a result
of its business. This could include harm
caused by pollution, faulty products, and
unfair labor practices. Good laws and
governmental policies will often alleviate
ethical CSR problems (Lantos, 2002).
Ethical CSR Samples
The Body Shop
 Our Values
The way we do business, the
way we make products, the way
we source ingredients, and the
way we use our voice; we're
different because of our Values
Ben & Jerry’s Home Made
Values
1. Taking care of our people
2. Giving back to our communities
3. Doing the right thing
4. Excellent customer service
5. Creating shareholder value
6. Building strong relationships
7. Respect for all people
Altruistic CSR
 Company takes a philanthropic approach by
underwriting specific initiatives to “give
back” to the company’s local community or
to designated national or international
programs
Altruistic CSR
 It involves a firm helping to relieve external
social problems and inequities through
charitable funding whether it financially
benefits the firm or not. This type of giving is
at the stockholders’ expense and may not be
legitimate (Lantos, 2002).
Altruistic CSR Samples
Southwest Airlines
Shell Corporation
 Southwest Airlines
 The devastation of the
supports the Ronal
McDonald houses with
donations of both dollars
and employee-donated
volunteer hours.
 They do so because they
see it as an appropriate
part of their mission to give
back to the communities in
which they operate.
tsunami disaster in Asia in
Dec. 2004 prompted the
Shell Corp. to provide fuel
for transportation rescue
and water tanks for relief
aid, in addition to financial
commitments of several
million dollars for disaster
relief.
Strategic CSR
 Philanthropic activities are targeted toward
programs that will generate the most positive
publicity or goodwill for the organization
 It involves choosing philanthropic activities
that will also benefit the company and help it
to reach its strategic goals (Lantos, 2002).
Strategic CSR Samples
 Ford spent millions on an ad campaign to raise
awareness of the need for booster seats for
children over 40 pounds and under 4’9” (most 4
to 8 years old) and gave away almost one million
seats as a part of the campaign.
 During the battle with Firestone Tires over who
was to blame for the “rollover” problems with
the Ford Explorer, Ford CEO at that time made a
public commitment to spend up to $3 billion to
replace 13 million Firestone defective tires for
free on Ford Explorer because he saw them as an
“unacceptable risk to our customers.”
No matter what purpose of doing CSR is to gain
positive publicity or give back to community
to get customer perception or else.
If an organization commits to CSR initiatives,
then they must be real commitments rather
than short-term experiments.
Procter and Gamble
Some of P&G Values:
 We all act like owners, treating the
Company's assets as our own and behaving
with the Company's long-term success in
mind.
 We respect our P&G colleagues, customers
and consumers, and treat them as we want
to be treated.
 We always try to do the right thing.
 We are honest and straightforward with each
other.
P&G Commitment
 Sustainability: improving lives now and
for generations to come
For example: Live, Learn and Thrive Program is
P&G’s global corporate devoted to improving
life for children in need, the Children’s Safe
Drinking Water Program is focused on
reducing sickness and death resulting from
drinking contaminated water
P&G Commitment
 Product Safety
For example: Safety and Ingredient Information
which P&G make safety and ingredient
information publicly available through
product labeling, consumer services and the
Web. Advancing Consumer Product Safety
which P&G works with stakeholders in
government, industry, academics and publicinterest groups to contribute to scientific
understanding.
P&G Commitment
 Environmental Responsibility
Samples of Environmental Policy:
 Ensure P&G’s products, packaging and operations
are safe for P&G’s employees, consumers and the
environment.
 Reduce, or prevent, the environmental impact of
P&G’s products and packaging in their design,
manufacture, distribution, use and disposal
whenever possible.
 Meet or exceed the requirements of all
environmental laws and regulations.
External Corporate
Responsibility Areas
 Advertising
 Product safety and liability
 Environmental concerns
What do you think
about the following
Ads?
Lingerie Billboard in NZ Airport
Plastic Surgery Ad
Deceptive ads?
False advertising or deceptive advertising is the use of
false or misleading statements in advertising
Source: http://en.wikipedia.org/wiki/False_advertising
Advertising
 By advertising very nature, is not complete
information. It is biased in favor of the
advertiser and the brand.
 People expect advertisers to be proud of their
products and probably don’t mind if they puff
them a little.
 But when advertiser cross the line and create
false expectations, people begin to object.
“Subliminal ads", should
advertisers use this kind of ad?
“Advertisers intentionally create ads with
sexual messages hidden in the
illustrations to seduce consumers.”
Offensive ads?
Abercombies ads are perceived as
pornographic, thereby causing
social cost that extended beyond
the limited scope of merely selling
clothes.
Women stereotype
as sex object ?
Misuse of women stereotype?
Misrepresentation of Minority
or elderly people?
Thai Ad Issue: BTS ads
Beauty Functional Drink ad
 Pinky white skin map from forehead, cheek,
neck, shoulder, arm, thigh, and etc.
Pinky White
Forehead
Pinky White
Cheek
Pinky White
Neck Pinky White
Sholder
Priority seating for white skin