BUSS4 CSR Research Bullet 3

Outline revision notes for research bullet 3 are provided below. Students should add in their own research evidence and arguments to this list over the weekend ahead of the BUSS4 exam

The third research bullet asks students to consider the: Influences determining which responsibilities are accepted by a business and which are not

Definitions
Stakeholder: any individual, business, group or organisation affected by the activities of a business
Responsibility: A duty, obligation or liability for which someone is held accountable
Corporate governance: practices, principles and values that guide a firm and its activitie at all levels of the organisation
Globalisation: Process of increasing the connectivity and mobility of the world’s markets and businesses

Key Theory
Stakeholder concept - how does a business determine which stakeholders it is accountable to
Contracted stakeholders (e.g. legal requirements re customers & staff) v connected stakeholders (e.g. local community)
Interdependence of business & society: how integrated do businesses and society consider themselves to be
Internal & external business influences - factors that determine /influence business decision-making

Arguments for taking on more responsibilities
Businesses increasingly operate across national borders (multinationals / globalisation) which increases the responsibilities they should take on
NGOs exerting greater influence over many firms and markets - makes it harder for firms to avoid wide range of responsibilities
Greater complexity of the supply chain widens the responsibilities that have to be addressed (e.g. need to be sure about suppliers)
Customers are becoming even more powerful - demanding greater transparency and sustainability - exert greater pressure

Potential Costs of CSR
Governments use regulation and legislation to ensure they key responsibilities required of business are taken on (e.g. employee rights, consumer protection, pollution)
The European Union is increasingly regulation the operations of multinationals
The range of potential responsibilities is always changing and is becoming too complex for most businesses - hard to identify which responsibilities are really important or valued by stakeholders

Examples / Evidence
Very wide range of potential responsibilities which can be selected: e.g. sustainable sourcing; fair trade; water usage; enegy efficiency; reducing packaging; diversity in employment; open & honest treatment of customers; health in the workplace; ethical business agreements etc

CSR more effective if firms FOCUS on key responsibilities:
E.g. Unilever (health/well-being; reduced environmental impact; enhancing livelihoods)
E.g. M&S (five pillars of CSR: climate change, waste, sustainable raw materials, fair partnership & health)
E.g. Apple (environmental protection and supplier responsibility)
E.g. Coca-cola (Beverage benefits; active health living; community; energy & climate; sustainable packaging; water stewardship; workplace)

Some firms seem to take on very few responsibilities:
E.g. Ryanair (few mentions of CSR; main focus on fuel efficiency & use of modern engine technology & noise reduction)
E.g. Dominos UK (no mention of CSR in its statement of “Mission, Culture And Priorities”)

The UN’s Global Compact sets out 10 principles through which firms all over the world should tackle such issues as human rights, labour, the environment and corruption.

“Depends on” Factors
The relative strength and influence of stakeholders is a key influence on which responsibilities are chosen
CSR agenda increasingly being set by competitors - responsibilities may be taken on to prevent a competitor gaining a competitive advantage
What society expects of business is changing - generally greater expectation of more CSR responsibilities
Nature of firm is important - does it operate in the public eye? Is it likely to be criticised for missing some responsibilities?

Possible Evaluation Arguments
Business is becoming increasingly international in scope and nature - this broadens the responsibilities a business needs to consider
Firms (and management) which view CSR as an opportunity will see the benefit of taking on a broader range of responsibilities
It is vital that a firm focuses on the responsibilities which are important and which can generate significant net benefits
Remember that CSR is voluntary - important not to mix it up with legal and regulatory responsibilities (over which business has no choice)