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Summary Strategic Corporate Social Responsibility by David Chandler 5th Edition, Chapter 1-12
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Summary Book: Strategic Corporate Social Responsibility – Sustainable Value CreationDavid Chandler, 5th edition By Alexander Huijgen
Summary chapter 1 – What is CSR?
Stakeholders are individuals and groups that have a stake in the firm’s operations. The
extent to which managers have paid attention to stakeholders fluctuates and depends on
factors such as the level of economic progress. As a result, managers are more likely to
recognize the interdependence between the firm and each of these groups, leaving less
room to ignore their separate and pressing concerns. In democratic societies, laws,
regulations, and judicial decisions provide a minimal framework for business that reflects a
rough consensus of the governed. Two questions for CSR:
1. What is the role of the for-profit firm in society?
2. Does the firm have broader social responsibilities (beyond making a profit)?
CSR, therefore, is both critical and controversial. It is critical because the for-profit secure is
the largest and most innovative part of any free society’s economy. On the other hand, it is
controversial, is it only focused on profit or also for society and profit?
Definition of CSR: A responsibility among firms to meet the needs of their stakeholders and a
responsibility among stakeholders to hold firms to account for their actions.
Every firm must identify their stakeholders and prioritize them on the level of importance.
Increasingly, firms need to incorporate the concerns of those key stakeholder groups within
their strategic outlook or risk losing societal legitimacy.
Archie Caroll: The CSR hierarchy (bottom down)
1. Economic responsibilities: Produce an acceptable return for investors.
2. Legal responsibilities: Act within the framework of laws and regulations.
3. Ethical responsibilities: No harm to its stakeholders and within its operating
environment.
4. Discretionary responsibility: Proactive, strategic behaviours that benefit themselves
or society, or both.
In order to achieve its fundamental economic goals today, a firm must incorporate a
stakeholder perspective within its strategic outlook. It seems that, in terms of CSR, the
variance is considerable, with at least five dimensions identified: Environmental, social,
economic, stakeholder and voluntariness. There is also variance across countries and
cultures.
It is important to emphasize that CSR is both a means and an end. It is an integral element of
the firm’s strategy – the way the firms goes about delivering its products or services to
markets (means). It is also a way of maintaining the legitimacy of the firm’s actions in the
larger society by bringing stakeholder concerns to the foreground (end). Put another way,
CSR is both a process and an outcome. CSR is a vehicle for the firm to discuss its stakeholder
obligations a way of developing the means to meet these obligations, as well as a tool to
identify the mutual benefits that result. Legal compliance is merely a minimum condition of
CSR.
, Summary Book: Strategic Corporate Social Responsibility – Sustainable Value Creation
David Chandler, 5th edition By Alexander Huijgen
The evolution of CSR
Always: When elements of society view leaders and their firms as failing to act appropriately,
activism results. Firms operate against an ever-changing background of what is considered
socially responsible. The cultural context in which the concept of social responsibility is
perceived and evaluated is crucial.
Foundations of CSR
Strategic CSR represents an argument for a firm’s economic interests, where satisfying
stakeholder neds is central to retaining societal legitimacy. There are different arguments for
implementing CSR:
1. The ethical argument
There are three essential components encapsulated within the concept of business ethics:
Normative (moral philosophy to categorize individuals actions as either right or wrong in
specific situations), descriptive (explains why people make these right or wrong decisions),
and practical ethics (applies ethical principles that determine right and wrong actions to day-
to-day decision making). Assumption: Right and wrong can be determined. CSR states that
ethical values are absolute. An ethical argument for CSR essentially rests on one of two
philosophical approaches - consequentialist reasoning and categorical reasoning. CSR is an
argument based on two forms of ethical reasoning: consequentialist reasoning (Utilitarian)
and categorical reasoning (Kantian). Consequentialist reasoning justifies action in terms of
the outcomes generated (the greatest good for the greatest number of people), while
categorical reasoning justifies action in terms of the principles by which that action is carried
out (the application of core principles, regardless of the outcomes).
2. Moral argument
CSR is an argument of moral reasoning that reflects the relationship between a company and
the society within which it operates. It assumes that firms recognize they do not exist in a
vacuum and that their ability to operate and achieve success comes as much from societal
resources (e.g., infrastructure, rule of law, educated employees) and consent (e.g., social
contract, license to operate) as it does from internal factors.
Because society’s contributions make business possible, the moral argument for CSR
presumes that firms have a reciprocal obligation to operate in ways that are deemed socially
responsible and beneficial.
3. Rational argument
CSR is a rational argument that focuses on the benefits to performance of avoiding external
constraints. Adopting the path of least resistance with regard to issues of concern makes
common and business sense. In today’s globalized world, where firms are empowered to
enact change, CSR represents a means of anticipating and reflecting societal concerns to
minimize operational and financial sanctions.
4. Economic argument
CSR is an argument of economic self-interest for business. CSR adds value because it allows
firms to reflect the needs and concerns of their various stakeholder groups. By doing so, the
firm is more likely to create greater value and, as a result, retain the loyalty of those
, Summary Book: Strategic Corporate Social Responsibility – Sustainable Value Creation
David Chandler, 5th edition By Alexander Huijgen
stakeholders. Simply put, CSR is a way of matching corporate operations with stakeholder
values and expectations that are constantly evolving.
Summary chapter 2 – The driving forces of CSR
1. Affluence (rijkdom)
Societal affluence raises expectations. While affluence drives CSR, the concept of being
better off is relative. In other words, we judge our own wealth by comparing it to the wealth
of others. As globalization enables a greater awareness of the living standards of people
elsewhere, inequality is rising as an issue and driving action. Relative wealth is perceived to
be as important as absolute wealth. There is inequality within countries as there is inequality
among countries. The relationship between inequality and social stability is strong.
Competitive strategies must consider the ever-shifting pattern of expectations placed on
firms by the greater choices (and challenges) that affluence affords societies. As society
becomes more complex, this task will become more difficult. In short, affluence leads to a
more engaged civil society, which leads to shifts in public attention to issues of concern.
2. Sustainability
The impact of heightened affluence and changing societal expectations is enhanced by a
growing concern for the environment. Human economic activity is depleting the world’s
resources and causing dramatic changes to the Earth’s atmosphere – changes that could
become irreversible in the near future. The scale and pace of population growth place an
enormous strain on the world’s resources. Population is not just becoming larger, but also
more concentrated. As a result of this heightened awareness, sustainability will increasingly
drive CSR. And firms that are perceived to be indifferent to their environmental
responsibilities will be punished by stakeholders. We need to be more efficient in our
resource utilization – extracting fewer raw materials and recycling (ideally upcycling) a much
higher percentage of the resources we use.
3. Globalization
With globalization, the range of stakeholder expectations to which multinational firms are
held accountable increases, as does the potential for conflict among competing demands.
In the process of connecting over large distances, however, the Internet initially reduced our
sense of an immediate community. As globalization progresses, information is
communicated more efficiently. There are four phases of stakeholder access to information
– from industrialization, to internationalization, to globalization, to digitization. Globalization
transforms CSR debate because a domestic context is no longer the only lens through which
the business should be viewed. Globalization enables stakeholders across different cultures
to express their concerns directly.
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