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Doing well by doing good

A presentation about social corporate rensponsibility
by

brenda thoelen

on 21 November 2012

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Transcript of Doing well by doing good

"Doing well by doing good" - Benjamin Franklin Change in the past 10 years 2012 2000 Moral issue Strategic issue The responsibility of enterprises for their impacts on society
(European Commission) CSR-Pyramid by Caroll Economic responsibility Legal responsibility Ethical responsibility Philanthropic responsibility Be profitable Obey the law Be ethical Be a good
corporate citizen Stakeholders Internal External Customers (65%)
Employees (61%)
Shareholders (46%) Philanthropic giving (6%)
Ethical investments (4%) "The business of business is business' "A corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society." Milton Friedman designed to provide goods and services to societal members maximizing ones profit while obeying the rules that is set by the government expecting businesses to operate at a level above that is required by law by contributing resources to the community and improves quality of life A survey from the Economist Intelligent (2004) Most important aspects Ethical behaviour off staff (65%)
Corporate governance (51%)
Transparency (58%) Executives Investors Transparency (86%)
Corporate governance (62%)
Ethical behaviour off staff (46%) Reputation Sales Investors Risks Competition
Penalized by consumers
= Most valuable intangible
Strong image
Main goal = continuity Consumers
Price
Quality
How produced
>> improves sales Investors: irresponsible and unethical business good reputation
>> improves financial situation Declining risks by
"Doing the right thing" Differentiate Separate from the competition

ex.: Reasons for
the popularity Financial
scandals - Enron: Energy company
trading activities out of the bookkeeping
>> Bankrupt
- Hiding money
- Taxes evaded
- Evidence destroyed
- 20 billion dollars in red
- Audit firm: Arthur Anderson Shrinking role
of government >> exploration of voluntary and non-regulatory initiatives Competitive pressure More companies with CSR
>> more pressure Competitive advantage Intangible benefits
f.e.: brand image Finance More interest from:
Consumers
Investors
About:
risks and opportunities
social & environmental issues Responsible actions
>> undemocratic
>> by government The maximization of profits to the shareholders Implementing CSR DO PLAN Economic Social Environment Working conditions at a clothes manufacturer Core labour standards
>> minimum standard rules and principles By international community for treating workers humanely Adidas Cambodia >> production for Olympic Games $66 (€50) / month
+ $120 for 2 hours
>> 10 hours a day! Nike >> Worker exploitation Problem World largest retailer of athletics shoes Asia, 1990:
"Sweatshop labour"
Physical and verbal abuse
Hazardous working conditions
Poor wages
Anti-union efforts Maximum work hours and minimum age Who works here? Young adults 20-24 years: 58%
Women: 83%
Completed senior high school: +/- 50% > 200 children involved in production lines Trouble!! June 1996, article about child labour in Pakistan (Life magazine) Tariq, 12 years
Stitching soccer ball
60 cent
Pour conditions Statistics: pour conditions Personally experience of verbal abuse: 30,2%
Observation of verbal abuse: 56,8%
Sexual comments: 7,8%
Physically abused: 3,3% Adapting CSR: new labour practices Changes in 1998:
Minimum age: 16
Safer solvents
Indoor air quality
Worker education program: free high school Benefits and costs Unproven benefits
Cost implications Better staff morale
Brand enhancement CSR >> higher profit ?!
Cost in multinational: 2% of total revenue

Benefits are irrelevant >> core values ex.: Chiquita saved $5 million a year Obstacles Business benefits Globalization and CSR World = global village
>> multinationals
>> requires laws by international
organisations Globalization and CSR Most difficulties in countries
>> weak and corrupt governments

Multinationals
boost to economy
danger: abuse their power Globalization and CSR
Strengthen political and economic system

Legal systems = level of national jurisdiction
>> NEED: general accepted rules at national level

Problem: government not motivated Multinationals and CSR Globalization and CSR specific laws
against violation
implement codes of conduct
progress: environment
but: not in social issues Globalization and CSR Attempts: diversity of legislations
Economic interest in long term
Better financial performance but formal sanctions
Impose limits to growth and profit Developing countries Globalization and CSR Be able to sanction directors >> rules:
do not damage environment
do not abuse human rights
do not damage public health and safety Challenge: encourage companies by a mix of public and private initiatives ACT IMPROVE Conclusion Managing business process
Impact on stakeholders
Comply with legalisation and organisations
Integrate ethical concerns CSR = creating benefits for the company, and also for the society Leading business network for CSR First goal: EUROPE 2020 5 Targets:
Employment
R&D innovation
Climate change / energy
Education
Poverty / social exclusion Employment, productivity, social cohesion Enterprise 2020 The contribution to become a smart, sustainable and inclusive economy
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