STRATEGIC CORPORATE SOCIAL RESPONSIBILITY Stakeholders in a Global Environment WILLIAM B. WERTHER, JR. DAVID CHANDLER University of Miami (8) SAGE Publications 55 Thousand Oaks London New Delhi
CONTENTS Foreword Mallen Baker Preface Why Corporate Social Responsibility Matters Plan of the Book Acknowledgments xiii xvii xvii xxi xxiii Part I What Is Corporate Social Responsibility? 1 1. Toward a Responsible Society 3 What Is CSR? 6 Corporate Strategy and CSR 9 What CSR Is and Is Not 10 The Evolution of CSR 11 The Cultural and Contextual Assumptions 13 A Moral Argument for CSR 15 A Rational Argument for CSR 17 An Economic Argument for CSR 18 Why Is CSR Important? 19 Why Is CSR Relevant Today? 19 Increasing Affluence 19 Changing Social Expectations 20 Globalization and the Free Flow of Information 20 Ecological Sustainability 20 Beyond Trends to Context 20 Questions for Discussion and Review 21 Notes 21 2. CSR: Do Stakeholders Care? 25 Do Stakeholders Care? 25 Stakeholder Advocacy 26
What Do Stakeholders Think? 28 The Wal-Mart Conundrum 29 Is Wal-Mart Good for Society? 30 Prices 32 Suppliers 33 Jobs 33 Quality and Variety 34 Wal-Mart Is King... Today 34 Martha Stewart Living Omnimedia 35 Consumer Reaction 35 Investor Reaction 36 So, Do Stakeholders Care? 37 Questions for Discussion and Review 38 3. The Strategic Context of CSR 43 The Strategic Lens: Vision, Mission, Strategy, and Tactics 44 The Strategic Lens: The E.S.C.S. Framework 45 Competencies 47 Strategy 47 Structure 48 The CSR Filter 49 The Strategic Lens: Environmental Context 49 Environmental Forces Propelling Greater CSR 51 CSR and Growing Affluence 51 CSR and Globalization 52 CSR and Communications Technologies 55 CSR and Brands 57 Strategic CSR 59 Questions for Discussion and Review 61 4. Implementation: The Integration of CSR Into Strategy and Culture 63 The CSR Threshold 63 The CSR Threshold Variations Between Companies 65 The CSR Threshold Variations Between Industries 66 The CSR Threshold Variations Between Cultures 67 Where Do Firms Stand Today? 68 CSR Business Plan of Action Short Term 69 From the Top Down With Sincere Commitment 69 CSR Officer 70 CSR Position Statement 71 Awareness Creation: Measurement and Rewards 71 CSR Audit and Report 72 CSR Ombudsman 75 CSR Framework Organizational Structure 75 CSR Business Plan of Action Medium Term 76 Stakeholder Involvement 76 Manage the Message 77
Corporate Governance Corporate Activism Overview of Implementation Implementation From a Strategic Perspective: Planning Implementation From a Firm Perspective: Action Questions for Discussion and Review Part II CSR: The Issues and Case Studies Organizational Stakeholders Economic Stakeholders Societal Stakeholders Special Cases of CSR 77 78 78 78 79 80 85 87 87 87 89 5. Organizational Issues and Case Studies Action Versus Intention Auditing CSR Compliance Ethics Compliance Approaches Corporate Charters Corporate Governance Reporting Corporate Governance Boards Corporation Employee Relations Hypocrisy Principal-Agent Conflict Research and Development Shareholder Activism Stakeholder Relations Volunteering 6. Economic Issues and Case Studies Advertising Brands Consumer Apathy Cultural Conflict Diversity Discrimination Diversity Helpful Intent Environmental Sustainability Fair Trade Finance Investing Loans NGO and Corporate Cooperation Philanthropy Profit Waaes Enron Sweatshops Ethics Officers Voluntary Versus Mandatory Federalization Sarbanes-Oxley Act (2002) Corporate Boards The U.S. Corporation Ohio Employee Ownership Center The Body Shop Expensing Stock Options Asbestos GlaxoSmithKline Ben & Jerry's Timberland Benetton BP SUVs Nike U.S. Masters Goodwill Industries Ford Starbucks Citigroup SRI Funds Microloans Greenfreeze Merck Hewlett-Packard McDonald's 91 91 94 99 102 106 108 113 116 118 122 124 130 134 138 141 151 151 153 156 160 164 168 171 175 180 184 188 192 196 200 204
7. Societal Issues and Case Studies Community Corruption and Bribery Country of Origin Ethics Globalization Human Rights Internet Legislation Litigation Media Patents Patriotism Science and Technology Sex Universities and CSR 8. Special Cases of CSR Companies Doing CSR Well Bank of America Coca-Cola Fast-Food Industry Heineken IKEA Johnson & Johnson Mattress Giant Microsoft (Bill Gates) Newman's Own Nike Pepsi Procter & Gamble Prudential Insurance September 11,2002 Sony PlayStation Southwest Airlines Starbucks Companies Criticized for Their CSR Efforts American Airlines Bridgestone/Firestone Defense Contractors ExxonMobil Ford Genetically Modified (GM) Labeling Hewlett-Packard McDonald's Video Game Industry Fannie Mae Legislation Conflict Diamonds Teaching Ethics U.S. Judicial Activism Union Carbide NGO Activism Company Responsibilities Bill Chiquita Brands CNN Generic Drugs Tyco Cloning Abercrombie & Fitch West Coconut Grove 215 215 218 223 227 231 234 237 241 245 249 253 258 264 268 270 281 281 282 282 283 283 284 284 284 285 285 286 286 287 287 288 288 289 289 289 290 290 291 292 292 293 294 295 295
Companies Trying to Do CSR Well 296 Berkshire Hathaway 296 Cadbury 297 Kraft 298 Maiden Mills 299 Monsanto 300 Nestle 300 PETA 301 Shell 302 University of Nottingham 303 Wal-Mart 304 Companies Persevering Against All the Odds 304 British American Tobacco 305 McDonald's 305 NBC 307 Philip Morris Companies 307 Part HI Appendixes 313 Appendix A. Directory of CSR-Related Organizations and Internet Links 315 Appendix B. Directory of Online CSR Information Sources and Publications 327 Appendix C. CSR Bibliography 333 Books 333 Journal Articles 338 Index 345 About the Authors 355