CASE STUDY 2 – NYSEG CSR PROGRAM The NYSEG case touches upon a complicated topic: that of management of a corporation directly deciding upon and providing policies which redistribute wealth away from the corporate shareholders and into the hands of other stockholders. In this case, NYSEG’s Project Share is essentially a form of welfare where NYSEG takes corporate resources and profits and reallocates them to poor customers or customers with severe debt issues. In my opinion, what is strikingly unusual about this program is the extent to which it becomes involved in the lives of its customers. Customers identified for Project Share may receive financial counseling, help with substance addiction, and help connecting with other welfare services. The main question posed by this assignment is whether or not NYSEG’s Project Share is both altruistic and good business. I believe that it is…to an extent. In the subsequent paragraphs, I will explain my position, as well as what I believe the positions of Milton Friedman and John Boatright would be based upon the assigned reading of their views regarding corporate social responsibility. As I just mentioned, I believe that to a certain extent, Project Share is at once altruistic and good business, but this view relies upon a perception of the business value of social outreach and community image that is difficult to accurately quantify. It also bears comparison to other industries and other business models. Project Share is undoubtedly helpful to the many customers who receive its benefits, and the assigned article states that “NYSEG’s bad-debt level is 20 percent lower than that of the average U.S. utility company.” It also points out that the costs of managing Project Share gre... ... middle of paper ... ...l responsibility as a source of employee satisfaction. Research in Organizational Behavior. Retreived May 16, 2014, from https://www.uic.edu/labs/skitka/public_html/CorpSR.pdf McElhaney K. (2009, Spring) A Strategic Approach to Corporate Social Responsibility. Executive Forum. Retreived May 16, 2014, from http://responsiblebusiness.haas.berkeley.edu/documents/Strategic%20CSR%20(Leader%20to%20Leader,%20McElhaney).pdf Schnietz K., Epstein, M. (2004) Does Corporate Social Responsibility Pay Off? Graziadio Business Review. Retreived May 18, 2014, from http://gbr.pepperdine.edu/2010/08/does-corporate-social-responsibility-pay-off/ Johnson, B. (2013, Jun 23) Big U.S. Advertisers Boost 2012 Spending By Slim 2.8% With a Lift From Tech. AdvertisingAge. Retreived May 18, 2014, from http://adage.com/article/news/big-u-s-advertisers-boost-2012-spending-slim-2-8/242761/
Orlitzky, M, Schmidt, F & Rynes, S 2003, ‘Corporate social and financial performance: A meta analysis’, Organization Studies, vol. 24, no. 3, pp 403-11.
Social responsibility requires managers to make decisions that positively influence the well-being of, not only their stakeholders, but the community as well (Jones, George, & Haddad, 2016, p. 111). Tentree has taken a proactive approach to the implementation of their corporate social responsibility (CSR) initiative. A proactive approach is demonstrated by a company’s eagerness to do more than the law requires for social responsibility (Jones, et al., 2016, p. 113). The basic social responsibility for a business is to use resources to increase profits without deception or fraud (Jones, et al., 2016, p. 112). Tentree goes beyond this basic social responsibility by being committed to environmental stewardship, sustainability and social responsibility
Perhaps Friedman’s most prevalent justification for dismissing social responsibility from business arises from his view on ethical spending. He believed that it was unethical for businessmen to spend other people’s (shareholders) money on other people (i.e. the community), and that transactions of such a nature should be left to government and corporate social responsibility programs. This line of thinking reinforced what is known today as the shareholder primacy model, whereby the primary moral duty of any corporation is to serve the shareholder’s interests, subject to some moral minimum (Smith, 2003). Friedman held that it was the shareholders money being spent, not the corporation 's, as corporations were merely fictional entities. Numerous
SC Johnson is in a very familiar arena for companies who have decided that the best approach to community support is through social contract. For me, I expect for large corporations to take part in social, political and environmental issues. Not only that, but there is an expectation for corporations to reinvest and to help struggling people to meet their basic needs. Corporations such as SC Johnson can show their concerns with struggling communities and appreciate the kickbacks while showing that it recognizes the value in giving back to these struggling communities.
Hohnen, P. (2007). Corporate Social Responsibility An Implementation Guide for Business. Winnipeg: International Institute for Sustainable Development. Retrieved January 22, 2014, from http://www.iisd.org/pdf/2007/csr_guide.pdf
Friedman argues that, for example a corporate executive has a responsibility to his employers, which is usually to make as much money as possible for the company while conforming to the laws and ethical customs of the society. This employer, outside his work, may devote his time and money to certain charities that he regards as worthy and while these are social responsibilities they are the individual’s social responsibilities, not the company’s. Friedman in a sense says how entities have responsibilities; it is the people that have the responsibilities. A corporation in a way is too vague of an entity to assume responsibilities. Again, he feels ‘’that the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation…. And his primary responsibility is to them’’ . The only responsibility a director should have is to its shareholders and not to society or any other interest group or public good. And so if the interest of the shareho...
To supply the wants and needs of a consumer, society entrusts wealth-producing resources to the business enterprise.” (Santayana, George. Is The Tyranny Of Shareholder Value Finally Ending? So before we go into greater detail on the different perspectives related to social responsibility, one might question the meaning of social responsibility. It is generally agreed that social responsibility is defined as the business obligation to make decisions that benefit society.... ...
Waldman, D., Kenett, R. S. and Zilberg, T. 2010. Corporate Social Responsibility: What it really is, Why it’s so important, and How it should be managed. School of Global Management and Leadership, Arizona State University.
Porter along with Mark Kramer. In this article, the authors emphasize on the importance of creating shared value on the strategic level of an organization vs corporate social responsibility which is viewed a separate moral obligation for the sake of company’s reputation and making profits. According to the authors, shared value must be embedded into the core value and strategy of business. What the authors of the article are implying is that awareness of social economic challenges is growing making them clearly visible. Businesses and their legitimacy are now viewed as part of the problem. CSR is considered as a scheme to make money and an area which is separate from its core business. Economists believe we should raise the bar and embed the concept of creating shared value on the core strategies of business. CSR activities are externally determined whereas, Creating Shared Value (CSV) activities are more company specific therefore understanding and legitimacy of value chain is needed for sustainability, for example the products and customers being served. CSR activities are limited to CSR budget whereas Creating Shared Value is mobilizing the entire budget of corporation to impact social issues. Creating Shared Value is a genuine way to restore the legitimacy of corporations as results are measured not just by profitability but by the social and economic value created. Companies who
The first discussion question posed was, “How does Dr. Friedman characterize discussions on the “social responsibilities of business”? Why (Jennings, 2009, p. 79)? Friedman (1970) characterized the discussions on social responsibilities as one hundred percent unadulterated socialism. Friedman (1970) characterized these discussions in that manner because he felt that a corporate executive should focus solely on making profits and not on social aspects. He mentioned how people who conduct and express themselves in this fashion are positively reinforcing and supporting the actions of individuals that have been weakening the foundational blocks of free society. Friedman (1970) posed a question which was the crux of his 1970 article “The Social Responsibility of Business is to Increase its Profits” where he investigated the true contextual meaning of what responsibilities mean to businesses. Friedman describes how businesses cann...
A corporations CSR should be shaped in order to fit the goals of the corporation, although every corporation’s CSR should differ, since most have different goals and different communities behind them. The CSR should be molded into fitting the corporation’s goals in order to make it easier on the corporation in giving back to the community while achieving its goals. For example, a corporation located in a desert wishes to be more efficient, by reducing water usage it is not only creating lower costs, which result in higher revenue, but also helps the community by not taking up so much water. Taking this into consideration, it is critical that the corporation goals and values are established and clear throughout the corporation, they should be developed by the board or directors and CEO, and the highest managerial level should stress their importance to the rest of the corporation. By making the goals and values at the top branch of the corporate hierarchy, it will be simpler for the corporates community to develop in order to nurture those goals and values. Therefore, a corporation can reach the “shared-value,” a value for both its shareholders and community in a simpler manner that can result benefiting the corporation in the end as well. Throughout the article many examples are given of actual corporations that have benefited and changed their CSR in order to fit their goals, therefore, providing solid proof that these methods work. Nevertheless, as acknowledged by the author’s themselves, most of the corporations taken into consideration where one’s that Harvard CSR students were employed
European Commission: 2001, Green Paper Promoting aEuropean Framework for Corporate Social Responsibility C OM(2001) 366 (Commission of the European Communities, Brussels). Retrieved from http://eurlex.europa.eu/LexUriServ/site/en/com/2001/com2001_0366en01.pdf
It seems obvious that large corporations have a tendency to ignore the negative effects of their actions in favor of profit. This example, although sensationalized, still says to me that with power comes responsibility. It affirmed my belief that a corporation’s goal cannot be just to provide profit to shareholders, but there must also be an element of social responsibility.
When the problem became serious two main views formed: the “narrow” view and the “broader” view, based on different ideas. The “narrow” view is based on the proposition that corporations have no social responsibility and they have only one main purpose, to make a profit (Friedman, 1970). So corporations should remain socially independent and all conflicts must be solved through the individual responsibility concept. On the contrary the “broader” view states that corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take place, and must help society, as profit is not their single purpose.
Hildebrand,D, Sen,S and Bhattacharya,C.B.(2011) European Journal of Marketing. Corporate social responsibility: a corporate marketing perspective. 45(9/10).1353-1364.