ACTIVITY 8.9 Corporate social responsibility Corporate social and environmental awareness has admiring certain companies, nearly a quarter (24%) of all Assignment 1.0 become essential for companies as they realise that they respondents said respect for employees. That compared must listen to all stakeholders if they are to achieve their to 21% who rated environmental responsibility, 12% Bullet Points only objectives. financial stability and 4% who thought creativity the Judging from his public statements, Bill Ford most important aspect of an admirable company. Jr, former chairman of Ford, has changed his great- The importance of the employee has been highlighted grandfather's most quoted statement to reflect a by the so-called *war for talent'. Recruiting the brightest different hue. It might now read: 'Any colour as long as it's and best has become a key concern of corporate green.' Speaking at a Greenpeace conference in London, strategy. Says Tom Cooper, of PricewaterhouseCoopers: the head of the world's third-largest car manufacturer There is such a limited number of the right type of said that he would like to see the end of the internal graduates right now, and they are choosy about the type combustion engine and also predicted the decline of car of company they will work for. The cost of recruiting and ownership. However, he combined this environmental retaining staff is likely to be higher if you are deemed not commitment with an equally strong desire to ensure to be an ethical employer and organisation.' A company's Ford's continued profitability. Such a combination of reputation also has significant implications for its environmental responsibility, ethics and profits is one financial performance. Some analysts believe it is one of that is attracting increasing attention. The Business the key factors in valuation of companies. One company Leaders Forum's Human Capitalism campaign disagrees could have a higher stock market valuation than another with the idea that the interests of shareholders and one solely due to its good social and environmental those of other stakeholders (i.e. employees, community, reputation. customers) must always conflict. The campaign seeks to Shell, a company with traditionally one of the worst weld these two seemingly opposite forces so that doing reputations among environmental and social pressure good and doing good business become one and the groups, has made enormous efforts to reinvent itself same thing. Members of the campaign include Andersen from being the environmentalists' favourite whipping Consulting, Coca-cola, Diageo, The Financial Times, Time boy to pioneer a socially responsible business. It has Magazine and the WPP Group. stated its aims as nothing less than to become "the Social and environmental responsibility has moved leading multinational in economic, environmental and from a 'nice to do' to a 'need to do'. One of the main social responsibility'. Shell's chairman has said that findings of a recent report by the International Business the reason for Shell's conversion to sustainability is Leaders Forum is a focus on employees and their views commercial: "We won't achieve our business goals unless of the companies they work for or may wish to work we are listening to - and learning from - the full range of for. When asked to rank their principal reasons for our stakeholders in society.' (30 marks, 40 minutes] 1 a Define the term 'socially responsible business'. [2] 3 Why did the chairman of Ford express 'an equally b Briefly explain the term 'ethics' [3] strong desire to ensure Ford's continued profitability'? [6] 2 Examine two factors given in the article that could encourage a business to adopt an ethical and 4 Discuss the likely costs and benefits for Shell of environmentally aware strategy. [8] being seen as the leading multinational in economic, environmental and social responsibility'. ]Assignment 2.0 Social audits - measuring corporate social responsibility Bullet Points only There could not be a much bigger contrast between ExxonMobil and the Soft councils and the financial support for a large teacher training programme Touch Community arts cooperative. in the USA. The directors of Exxon are determined to match the best social Exxon has an estimated revenue of $45 million per hour while Soft Touch performance in the oil industry. has an annual turnover of $700,000 - yet they both produce annual social Soft Touch depends on many state bodies for its funding. It needs to audits (called corporate citizenship reports in the USA). Social auditing is a convince them of the social value of its work. This can only be done by gaining system of reviewing a company's operations, to examine its social impacts feedback from the young, disadvantaged people it helps. Many local councils and to compare social performance with any social objectives the organisation were so impressed by the content of the social audit that they increased might have. This makes the process very useful for social enterprises - such their funding. as Soft Touch - and businesses keen to correct a poor reputation - the Exxon Alan Kay, social audit adviser, admits that the labour and finance resource Valdez oil tanker disaster in 1989 is the worst the world has seen. commitment required in compiling a detailed social audit can be great. Kay Exxon's social audit contains a huge quantity of evidence concerning says that, on a cost-benefit basis, social auditing is most likely to produce the company's social impact. For example, it gives details of the amount of gains for big companies and charities. 'I am not sure that this is of benefit oil the company spilt into the environment in one year, employee fatalities, to businesses of perhaps ten staff. Which stakeholders are going to read the percentage of all employees who are women, sponsorship of ethnic minority social audit of a small local shop? [27 marks, 40 minutes] 1 Explain the main purposes of a social audit, using the 2 Discuss the view that social audits might be a more examples in the case study and any others that you worthwhile investment for large businesses than have researched. [12] for very small businesses. [15]Assignment 3.0 Full essay answer A Level essay questions [25 marks, 45 minutes each] 1 *Technology causes businesses as many problems as it solves.' Discuss. (25] 2To what extent should managers of public limited companies allow environmental and ethical considerations to influence their business decisions? [25]