Flashcards
Econ Final - Chapter 12
Cards in this deck (19)
- 1corporate social responsibility (CSR)a corporation's social responsibility pertaining to the consideration of and response to issues beyond the narrow economic., technical, and legal requirements of the firm in order to accomplish social benefits along with the traditional economic gains that the firm seeks
- 2CSR as a management conceptrefers to the integration of social and environmental concerns into a firm's business operations and interactions with stakeholders
- 3stakeholderany group or individual who can affect or is affected by the achievement of the organization's objectives; the interested parties who help the organization to exist; anyone who has a stake in the organization's success
- 4key stakeholder groups identified within a stakeholder view of the firm (figure 12.1)-shareholders
-social groups
-customers
-communities
-employees
-environmental groups
-suppliers
-governments - 5shareholdera subset of the larger stakeholder group, shareholders are people or entities that own shares in a corporation and thereby have a vested interest in the firm's financial success
- 6stakeholder vs. shareholderstakeholder = a member of the broad group including anyone affected directly or indirectly by a firm's actions and therefore have an interest in the success or failure of a firm
shareholder = a member of the subset of the broad stakeholder group distinguished by their investment in the firm through the purchase of stock shares and therefore has a specific interest in the financial success or failure of the firm - 7global sustainabilitythe ability to meet the needs of the present without compromising the ability of future generations to meet their needs
-the key goal of CSR
-refers to sustainable social social and natural environments + sustainable capitalism - 8primary stakeholder groupinternal stakeholders that engage in economic transactions within a corporation and therefore stand to be directly affected, either positively or negatively, by the operations and activities of an organization; constituents on which the firm relies for its continuous survival and prosperity
- 9members of the primary stakeholder group-shareholders
-managers
-employees
-suppliers
-customers
-governments whose laws/regulations must be obeyed & to whom taxes are due - 10secondary stakeholder groupexternal stakeholders those who, although not directly engaged in economic transactions within the corporation, are indirectly affected, either positively or negatively, by the operations and activities of a corporation; not essential to the corporation's survival
- 11members of the secondary stakeholders groupalthough firms are not directly dependent upon these groups, they do possess the ability to cause significant embarrassment/damage to the firm
-environmental groups
-fair labor practice groups - 12key propositions of the stakeholder view of the firm-representation of the "big picture" through a quest for global sustainability
-instead of focusing solely on the economic bottom line, firms should pursue a triple bottom line - 13triple bottom linea trip-part performance yardstick for MNEs based upon economic, social, and environmental performance relative to the corporation's ability to simultaneously satisfy the demands of all stakeholder groups
- 14what is the fundamental debate that CSR attempts to address and who is this debate between?-the fundamental debate is whether or not a firm is solely an economic enterprise
-this issue is debated between free market advocates and CSR advocates - 15explain the argument of the free market advocates within the fundamental CSR debate-views the social responsibility of a firm as being to maximize profits
-shareholders viewed as the 1st & foremost stakeholder group
-firm's attempts to attain social goals seen as causing managers to lose focus on profit maximization -> possibly causing the firm to lose its character as a "capitalistic enterprise" -> thereby turning it into a "socialist organization" - 16explain the argument of the CSR advocates within the fundamental CSR debate-the free market is guided by self-interest but constrained theoretically by rules/contracts/property rights
-these constraints may fail in practice, leading to greed/excess/abuse
-argue that if left to own devices, firms/managers may choose self-interest over public interest
-shareholders are important but views all stakeholders as having an equal right to bargain for a "fair deal"
-a firm's purpose is NOT profit maximization, rather to serve as a vehicle to coordinate the interests of all its varying stakeholders - 17what are the 2 drivers of the CSR advocates' argument recent progression into a central part of strategy discussions?1. the continually widening gap between the haves and the have-nots of the global community
2. waves of corporate disasters and scandals - 18what are the 3 strategic perspectives used to explain CSR?1. industry-based considerations
2. resource-based considerations
3. institution-based considerations - 19industry-based considerations used to explain CSR-competitive rivalry within concentrated industries forces incumbent firms to recognize their mutual interdependence making it easier to sustain a united front against CSR pressures; this becomes more and more difficult as the number of rivals continues to increase
-incumbents can raise entry barriers to deter potential entrants through the experience accumulated from being first-movers in pollution control technologies, specifically in the area of pollution prevention where pollutants are reduced or eliminated through products featuring complex technologies derived from experience = direct triple-bottom line benefits & heightened barriers to entry
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- Flashcards on Econ Final - Chapter 12, created by Claire McKeon on 09/12/2015.
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- Claire McKeon
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