CORPORATE

SOCIAL RESPONSIBILITY

Jaylou Armecin Aguilar

Rhonalyn Rhose Villarna Delfin
Rica Mae Lumacang
Evelyn Luega Navarro
Shyra Relativo
 Arowwai
Industries

Overview of
Corporate Social Responsibility

Corporate Social Responsibility (CSR) is

increasingly recognized as a strategic component
of modern business practices, integrating ethical
and societal considerations into corporate
strategies. CSR involves aligning a company’s
mission and operations with broader social,
environmental, and economic goals, aiming to
balance profitability with positive societal impact.

https://www.researchgate.net/profile/Kafigi-Jeje/publication/321213691_An_Overview_of_Corporate_Social_Responsibility/links/5a1553550f7e9b925cd53bdc/An-Overview-of-Corporate-Social-Responsibility.pdf
Forms of
Corporate
Social
Responsibility
Environment-related CSR
Focus on environmental sustainability (e.g.,
water conservation, waste management).
Firms help communities live in eco-friendly
environments (Battaglia et al., 2014).
Marketplace CSR
Ethical trading, advertising,
customer relations, and
ethical product delivery
(Battaglia et al., 2014).
Workplace CSR
Initiatives for employee well-being, such as
training and health benefits (Sharma &
Kiran, 2013)

Community-related CSR
Building strong ties with local
communities through
education and health
programs (Maignan & Ferrell,
2004).
Economic Responsibility
Focus on profit maximization, delivering
quality products, and returning value to
shareholders (Carroll, 1979).

Legal Responsibility*
Compliance with local,
national, and international
laws to maintain business
legitimacy (Khan et al., 2012).
Ethical Responsibility
Going beyond legal obligations to act fairly
and justly, reflecting moral principles
(Lantos, 2001).

Philanthropic Responsibility
Voluntary actions benefiting
society, often aligned with the
company's goals (Carroll,
1991).
Usefulness of
Corporate
Social
Responsibility
Improved Employee Relations
CSR helps retain top talent and creates a positive
work environment (Souto, 2009; Sharma et al., 2009).
Ethical companies are seen as attractive employers
(Bauman & Skitka, 2012).
Enhanced Public Image and Reputation
CSR improves corporate reputation, attracting
customers, employees, and shareholders (Cavico &
Mujtaba, 2012). A positive image leads to long-term
benefits for the company (Orlitzky et al., 2011).
Increased Customer Satisfaction and Loyalty
CSR practices enhance customer satisfaction, leading
to loyalty and market share growth (Sharma & Kiran,
2013; Luo & Bhattacharya, 2006).

Competitive Advantage
CSR creates a competitive edge by aligning with
stakeholder interests, leading to innovation and
performance improvement (Carroll & Shabana, 2010;
Galbreath, 2009).
Financial Performance
Long-term financial returns from CSR are realized
through improved stakeholder relationships and
customer loyalty (Orlitzky et al., 2011).

Reduced Costs and Risks

CSR reduces costs (e.g., through tax savings) and
mitigates risks by building a strong reputation and
stakeholder relationships (Carroll & Shabana, 2010;
Forte, 2013).
Attracting Investors and Partners
Strong CSR practices attract investors, shareholders,
and business partners (Cavico & Mujtaba, 2012;
Battaglia et al., 2014).

Community Benefits and Trust

CSR strengthens community relations and creates a
positive impact, preventing harm to society (Masuku &
Moyo, 2013).
Ethical Leadership
and the
Psychology of
Decision Making
 Ethical Leadership
It is a leadership that is directed by
respect for ethical beliefs and values
and for the dignity and rights of
others. It is the understanding that
positive relationships are the gold
standard for all organization effort.
 Ethical leaders have the following
values:

01 TRUST 04 EQUITY

02 RESPECT 05 JUSTICE

03 INTEGRITY 06 COMPASSION
 Ethical leadership
have two elements:

Ethical leader must also

Ethical leader must act lead ethically in the
and make decision attitude, in the ways
ethically as how ethical they encourage and in
people in general. the direction in which
they steer their
organization or institute
Ethical leadership is both
VISIBLE and INVISIBLE.
Ethical Decision-Making
It to the process of evaluating and
choosing among alternatives in a
manner consistent with ethical
principles. In making ethical
decisions, it is necessary to perceive
and eliminate unethical options and
select the best ethical alternative.
Ethical decision
making in
organizations:
A person-situation
interactionist model
The Question:
“Is the social responsibility of a
business to increase its profit?”
This originated from a famous article by economist
Milton Friedman, published in 1970.
As long as it stays within the legal and ethical
boundaries.

Milton Friedman’s Perspective

Friedman’s argument hinges on a few central ideas:

1. Shareholder Primacy
2. Legal and Ethical Boundaries
3. Social Responsibilities of Individuals, Not
Corporations

Modern Views: CSR and Stakeholder Theory

1. Stakeholder Theory
2. Corporate Social Responsibility (CSR)
 Arguments for Profit Maximization as
Social Responsibility

Arguments Against Profit Maximization as

Sole Responsibility

Pro Against

Economic Externalities
Efficiency Short-
Wealth Termism
Distribution Evolving
Innovation Expectations
Corporate Citizenship
Refers to a business's responsibility to stakeholders, including
employees, consumers, and the environment. It extends
beyond legal obligations, focusing on how companies
voluntarily contribute to societal well-being and address issues
like inequality, climate change, and ethical practices.

Key Principles:

Accountability: Transparency: Sustainability:

Corporate
Open
Businesses should strategies should
communication
be accountable promote long-
and ethical
for their impact term societal
practices build
on society and benefits
trust with
the environment. alongside
stakeholders.
business growth.
Philanthropy and Social Initiatives
Philanthropy involves charitable donations by businesses
to support causes like education, healthcare, and
disaster relief. Modern corporate social initiatives go
further, integrating societal goals into core business
strategies.

Types of social initiatives:

Corporate Volunteering Cause

Giving: Programs: Marketing:
Aligning company
Financial
Encouraging goals with social
donations to
employees to causes to support
charitable
participate in both profit and
organizations or
community social good (e.g.,
community
service. buy-one-give-one
causes. campaigns).

Example: Microsoft’s Tech for Social Impact program offers discounted technology
services to nonprofits, blending philanthropy with business capabilities.
Theorizing Business Citizenship
Business citizenship suggests that companies, like
individuals, have civic duties. This model views businesses as
part of the social fabric, requiring them to act ethically and
respect the rights and responsibilities associated with their
influence.

Key theories include:

Stakeholder Triple Bottom

Theory: Line (TBL):
Companies should
Businesses should pursue sustainability
consider the in three areas—
people, planet, and
impact of their
profit—balancing
actions on all economic success
stakeholders, not with social equity
just shareholders. and environmental
responsibility.
THE COMPETITIVE
ADVANTAGE
OF CORPORATE
PHILANTHROPY
 CORPORATE
PHILANTHROPY

the investments and activities a company

voluntarily undertakes to responsibly manage
and account for its impact on society.

Philanthropic investments and activities

include:
1. Money
2. Donations of products
3. In-kind services
A company's competitive advantage consists of 4
interrelated elements of the local business environment that
shape potential productivity:

Four interrelated elements:

Factor conditions/Available inputs of

Demand conditions
production
Achieving high levels of productivity depends In a nation or region include the size of the
on the presence of trained workers, high- local market, the appropriateness of product
quality scientific and technological institutions, standards, and the sophistication of local
adequate physical infrastructure, transparent customers.
and efficient administrative processes (such as
company registration or permit requirements),
and available natural resources. All are areas
that philanthropy can influence.
A company's competitive advantage consists of 4
interrelated elements of the local business environment that
shape potential productivity:

Four interrelated elements:

Context for strategy and rivalry Related and supporting industries

The rules, incentives, and norms governing A company’s productivity can be greatly
competition in a nation or region have a enhanced by having high-quality supporting
fundamental influence on productivity. Policies industries and services nearby.
that encourage investment, protect intellectual
property, open local markets to trade, break up
or prevent the formation of cartels and
monopolies, and reduce corruption make a
location a more attractive place to do business.
SOCIAL SCREENING
OF
INVESTMENTS
 Definition Of
INVESTMENT SCREENING

the process of determining whether an organization’s

values align with that of the investors. In today’s market,
screens help identify firms based on environmental,
social and corporate governance (ESG) criteria.

SOCIAL AND CORPORATE GOVERNANCE (ESG)

CRITERIA
- framework that considers non-financial factors impacting
a company’s long-term success. ESG criteria include
environmental sustainability, social impact, and the quality
of a company’s governance practices.
 TWO FORMS:
POSITIVE SCREENING NEGATIVE SCREENING
QUESTION:
Positive screening, or as it is sometimes It simply excludes investments in companies
referred to, ‘best-in-class screening’, is a that actively work against the investor’s values,
process that identifies companies that are
How do we use
such as organizations with a history of
actively making contributions to social or international technology in an It is the
bribery or corruption.
environmental change. most widelyeducational
used process setting?
of identifying
Example: targeted investments for a reason; it’s
Investing in sectors, issuers or projects selected for incredibly inclusive.
positive ESG performance relative to industry peers.
Example: Why do we use
Active inclusion of companies within an investment Excluding certain sectors, issuers of securities for poor ESG
universe because of the social or environmental technology for
performance relative to industry peers, or based on specific
benefits of their products, services and/or
processes
educational purposes?
ESG criteria, e.g. avoiding particular products/services,
regions or business practices
Endorsing best-in-class or ‘leaders’ in best practice Absolute avoidance of activities such as: alcohol, tobacco,
against peer group using quantitative ESG gambling, adult entertainment, military weapons, fossil fuels,
measurements. nuclear energy
Positive thematic development such as: Sets a materiality threshold (e.g. 10%) based on revenue
transitioning companies, renewable/clean exposure or business activity/operation
Avoidance of worst-in-class investments using quantitative
technology, social enterprises or initiatives.
ESG measurements
The Question:
“How Does a Fund Manager Screen
Investments?”

The screening process is usually

implemented in two ways:

outsource the screening

process, or
they will do it themselves based
on third-party data.
When screens get it
wrong?
The importance of
Screens are merely tools that are used to help a fund
manager or research department quantify what it means to Investment screening
be a socially responsible investment. This does not always
mean that the screens are particularly rigorous, or that the
company being screened is entirely ethical. A company could Investment screens help analysts
pass on one screen but fail another. identify which companies will gain
investor’s support. They offer a
standard by which investors can
judge companies and hold
companies accountable for their
values and actions.
 Corporate social initiatives:
corporate community
involvement; social accountability
and corporate greenwashing
 Corporate Social
Initiatives
Corporate
Social Corporate
Community
Accountability Greenwashing
Involvement
It differs from philanthropic It is a concept that revolves It is a false, misleading or
activities since it allows around the responsibility of deceptive conduct by
stakeholders to enter the organizations to operate companies which can cause
company’s infrastructure, ethically, transparently, and people and investors to
human resources, and in alignment with social and believe their products,
business operations. environmental standards. services, or overall business
model are more climate-
friendly than they really are.
 Corporate social responsibility in
the global context: multinationals
and less developed countries;
international business, morality
and the common good; corruption
in international business
 Multinationals and
Less Developed
Countries
Microsoft’s 4Afrika Initiative provides a set of programs to
empower African youth, entrepreneurs, developers and
business and civic leaders.
Apple launched a 100-kilowatt rooftop solar project at an
educational premise for disadvantaged children in
Philippines.
Mcdo Donated $500,000 in 2023 to support those
impacted by the earthquake in Turkey.
 International
business, morality
and the common
good
In the absence of an international enforcement agency,
multinational corporations operating in a competitive
international environment cannot be said to have a moral
obligation to contribute to the international common good,
provided that interactions are nonrepetitive and provided
effective signals of agent reliability are not possible.
 Corruption in
International Business
Corruption wastes valuable resources that international aid
organizations have available and make donor nations
hesitant to continue their donations. Corruption involves
companies that may prefer to operate honestly and embroils
them in unethical and difficult situations.
 THANK YOU
FOR YOU ATTENTION
AND PARTICIPATION
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