Summary Introduction to Business Management Chapter 5 Complete
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Course
Introduction to Business Management (BMNG5121)
Institution
Rosebank College
Book
INTRODUCTION TO BUSINESS MANAGEMENT 11E
This document provides an in depth and thorough summary of chapter 5 of Introduction to Business Management 11th edition (Erasmus et. al.). It is ready for exam and tests. Everything is laid out as it is in the textbook. All needed information is provided in short. It is written in an easy to study...
Chapter 5 (Corporate Social Responsibility)
Companies have societal and environmental impact
Companies must manage business relationships with wider society
Companies have a responsibility for the behaviour of others with whom they do business
Contributes to sustainable development, health, and welfare
Considers stakeholder interests and expectations
Complies with law and international standards
Works across the whole company and in personal relationships
Corporate citizenship Corporate social investment
Corporates are legal entities with rights and responsibilities Contribution made to society (excluding contributions made
similar to individual citizens, including right to enter through core business activities/ charity work) includes
contracts, hold assets, hire, and to sue and be sued (student sponsorships, local health clinic support etc)
Tripple bottom line
Measures the financial, social and environmental impacts of business.
All are equal and all are interconnected (planet, people and profit)
Social drivers
Companies desire a reputation of social responsibility
Consumers and employees prefer socially responsible products and services
Mainstream investment funds and stock exchanges are addressing CSR objectives
Civil society organizations and others have collaborated with companies and governments to establish guidelines for
socially responsible corporate behaviour
Companies engage in CSR to meet societal expectations and protect their reputation
Governmental drivers
Governments enforce local and national legal systems for companies to operate in their country
These systems include laws on companies, labour relations, and environmental management
Governments often encourage business involvement in social issues through CSR
Governments can promote CSR through organizational support and funding
Soft regulation can be introduced to encourage socially responsible corporate behaviour
Compliance in CSR extends beyond the law's letter to the spirit of the law
Complying: Letter of the law - company doing the bare minimum to avoid consequence.
Complying: Spirit of the law - company doing what can be reasonably expected to further the objectives of the laws
Market drivers
(CSR) not only represents costs for companies but also offers advantages like reduced costs or increased revenues
CSR Cost Reduction Strategies
, Avoiding fines and legal costs
Using resources efficiently, like reducing energy/paper use, reducing costs
Using alternative raw materials like recycled materials
Reducing salary costs
Increasing staff productivity
Reducing capital expenditures
Ethical drivers
CSR Revenue Increase Strategies
Development of new products or services like carbon credit trading
Growth of service markets through job creation, social development, or technological interventions
Improving market access like through government purchase
Avoiding protests
Exploitation of CSR premium among consumers who prefer socially responsible products and services
Corporate governance
Governance refers to the way in which a business makes decisions about how to manage affairs
Corporate governance is the system by which companies are managed and controlled
Refers to the relationship between those who govern and those who are governed
Roles and responsibilities:
Board of Directors
Group of people assembled to lead and control the company and functions in the best interests of its shareholders.
Executive directors: Full time employees
Non-executive directors: Not involved in the day-to-day operations of a business
Primary principles of good governance:
Social responsibilities Discipline Transparency Independence
Accountability Responsibility Fairness
How does corporate governance relate to CSR
Corporate scandals can damage reputation and impact investors, shareholders, employees, and the public
CSR acknowledges corporations' responsibility for societal impact
Boards balance business purpose, core values, stakeholder involvement, and shareholder-stakeholder balance
Corporate governance is balancing economic and social goals, individual and communal goals
Chairperson and board should govern CSR programs, monitoring risks and opportunities, engaging with stakeholders,
formulating policies and strategies, and monitoring implementation
Management should implement and manage CSR, mirroring financial governance structure
CSR should be embedded in board-level structure such as a CSR committee
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