Week 1 Lecture

September 6-10, 2020

Ewout van der Schaft

Ewout.schaft@xjtlu.edu.cn
 Who are the people involved?

Module leader: Dr. Yameng Zhang 张雅萌博士

Lecturer in Strategic Management
IBSS. Yameng.Zhang@xjtlu.edu.cn

Ewout.Schaft@xjtlu.edu.cn (Lectures)

Ya.Liang20@student.xjtlu.edu.cn (Teaching assistant)

Quan.Zhang18@student.xjtlu.edu.cn (Teaching assistant)

Visit Yameng during office hours or make an appointment (BS258

10:00-12:00 am every Friday)
Ewout van der Schaft
Nationality: Dutch
2013 - IBSS@XJTLU
Professor, Associate Dean International IBSS, Head of Department Industrial Design (2018-
2019), IMBA Programme Director (2017-2018) and Deputy Dean IBSS (2013-2016)

2011 – 2013 Aegis School of Business (Mumbai, India)

Dean Executive Education
Responsible for executive education, corporate events, distance learning strategy and
student recruitment

2008 – 2010 CEU Business School (Budapest, Hungary)

Associate Dean External Relations
Responsible for corporate strategy, executive education, marketing and sales, consulting,
Romanian operations and student recruitment for EMBA and MBA

2006 – 2008 Bulgarian Telecom, now Vivacom (Sofia, Bulgaria)

Head of PMO (Project Management Office)
Prepared BTC for sell off. Investment Company Novator sold controlling stake in the
Bulgarian telecommunications company BTC to the US-based Global Investment Group AIG
for EUR 1.8 billion. Profit was 700 Mio EUR.
1995–2004 Czech Telecom, now Telefonica O2 (Prague, Czech Republic)
Executive Director Business Development 2003– 2004
Commercial Director 2000 – 2002
Executive Director Transformation 1999 – 2000
Director Human Resources Transformation 1995 – 1998

1994–1995 Philip Morris (Bergen op Zoom, The Netherlands)

HR Manager

2013- DBA, University of Liverpool

2000 MBA, Pittsburgh University (Pittsburgh, USA)
Graduated as Master of Business (MBA) at the International Executive MBA, Katz
Graduate school of Business
1993 Leiden University (Leiden, The Netherlands)
Graduated as Master of Public Administration (Drs)
Free Time
 Rules of the Game
Informal atmosphere
- Read textbook
- Speak up and take initiative
- Classes mandatory

Online-Offline
- Students abroad: online lectures + tutorials
- Students in China: online lectures + in classroom tutorials
- Examination will be conducted online (information will follow)
- Lectures will be consucted through a mix of (1) Live BBB
sessions, (2) recorded BBB sessions and (3) with Podcasts
 Literature, Backgrounds, References
• WWW: professional websites, academic websites, youtube,
corporate websites, blogs, presentations, etc..
• Literature on CSR, Strategy, etc.
• Academic and Practical Experience
 Textbook

• E-textbook
• Purchase will be made in the third week
• Please be patient and follow the tutorials and lectures
 Who are the people involved?

Programme Programme director

BA Accounting Sun Liu
BA Business Administration Richard Galletly
BA English and International Business Yan Zhao
BA Human Resource Management Yue Xu
BA International Business with a Ellen Touchstone
Language
BSc Information Management and Wesley (Szu-way) Shu
Information Systems
BA Marketing Sunny Pan
 What are the aims and learning outcomes?

Aims:
The aim of this module is to provide students with a critical introduction to the
institution of the corporation in its wider context. Key areas of study include
the debate about corporate social responsibility, business ethics, and
sustainability. These issues are explored through the use of a range of
theoretical perspectives alongside case-studies and scenarios.
 What are the aims and learning outcomes?
Learning objectives & outcomes:

A. Understand the historical roots, definitions, and operationalisations of corporate

social responsibility as part of the corporate agenda;

B. Demonstrate an understanding of key ethical frameworks and ideas;

C. Appreciate how frameworks and ideas can be used to develop ethical decision-
making skills and reasoning;

D. Understand the current ethical, social and environmental challenges facing

managers and employees in organizations today;

E. Develop an ability to apply CSR concepts to practical business strategies and for
engaging stakeholders.
Corporate Social
Responsibility
“Profit for a company is like oxygen for a
person. If you don’t have enough of it, you’re
out of the game. But if you think your life is
about breathing, you’re really missing
something.”
------- Peter Drucker
Demand of CSR Managers in real world

Master Programs on CSR and

Sustainability:

Imperial College: MSc Climate

Change, Management & Finance
Edinburg University: MSc Carbon
Management, MSc International
Business Management with
Sustainability Management
Cornell University: Sustainable
Global Enterprise
Vermont University: Sustainable
Entrepreneurship MBA
HEC: Sustainability and Social
Innovation
McKinsey Sustainability

&Company Our Insights How We Help Clients Our People Contact Us

2
Beef Production is Killing the Amazon Rainforest
 Business schools, by
failing to systemically
and critically discuss
issues such as executive
incentive programs,
have contributed to the
financial crisis.
--- (Jacobs, 2009, The Wall Street Journal)
“We're trying to impact quality of mind, quality of
character...we want [the student] to start thinking about
issues...to think about the ethics of someone in a
company making 10 million dollars and someone making
three thousand dollars a year...about how he or she is
going to be dealing with those issues.”

C. Roland Christensen Harvard Gazette, 1991

 How the public view the role of
business in society

Source: 2018 Edelman Trust Barometer

 Development
Environment The work place: assistance/
Health and safety Private sector
Labour relations development

Dialogue/partnership
Human Rights Corporate Social with NGOs
Responsibility

Business ethics
Anti-corruption Business presence OECD International
in conflict areas Global Compact dialogue
World Business
Forum
• “I am an impatient
optimist. The world is
getting better, but it’s
not getting better fast
enough, and it’s not
getting better for
everyone.”

--Bill Gates
Part I: Corporate Social Responsibility
Chapter 1: What Is CSR?
 Content

The selected textbook seeks to understand the goals and purpose of a

for-profit firm. In particular, we will explore how the firm creates
value, broadly defined, by investigating the concept of strategic
corporate social responsibility (strategic CSR). Strategic CSR draws
on what we know about economic exchange and human psychology
to explain how markets work (or don't) and how value is added
(or subtracted) across the range of the firm's stakeholders.
Understanding these processes allows managers to build a
strategic competitive advantage for the firm. Thus, strategic CSR
is at the center of business success in the 21st century.

31
What Is CSR?

What is the purpose of the for-profit firm?

• What is the relationship between a firm and the societies in which

it operates?

• What responsibility does a firm owe society to self-regulate its

actions in pursuit of profit?

Chandler, Strategic Corporate Social Responsibility,

32
5e. © SAGE Publishing, 2020
What Is CSR?

• A new 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

Chandler, Strategic Corporate Social Responsibility,

33
5e. © SAGE Publishing, 2020
Slide 5.34

Who are the stakeholders?

Stakeholders are those individuals or groups that

depend on an organisation to fulfil their own goals
and on whom, in turn, the organisation depends.

Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved
Types of stakeholder

Stakeholders can be divided into internal

stakeholders (e.g. managers and employees) and
external stakeholders.
External stakeholders are of 4 types:
• Economic (e.g. suppliers, shareholders, banks)
• Social/political (e.g. government agencies)
• Technological (e.g. standards agencies)
• Community (e.g. local residents)
Conflicts of stakeholder interests and
expectations (1 of 3)
• Pursuit of short-term profits may suit shareholders
and managerial bonuses but come at the expense
of investment in long-term projects.
• Family business owners may want business
growth, but also fear the loss of family control if
they need to appoint professional managers to
cope with larger-scale operations.

36
Conflicts of stakeholder interests and
expectations (2 of 3)

• Investing in growth strategies may require additional

funding through share issue or loans, but thereby risk
financial security and independence.
• Going public on the stock market may raise funds, but
require unwelcome degrees of openness and
accountability from management.
• Expanding into mass markets may require a reduction
in quality standards.
Conflicts of stakeholder interests and
expectations (3 of 3)

• In public services, excellence in specialised services might divert

resources from standard services used by the majority (e.g. heart
transplants come at the cost of preventative dentistry).
• In large multinational organisations, conflict can result because of a
local division's responsibilities simultaneously to the company head-
office and to its host country.
The CSR Hierarchy

Chandler, Strategic Corporate Social Responsibility,

39
5e. © SAGE Publishing, 2020
The Evolution of CSR

Chandler, Strategic Corporate Social Responsibility,

40
5e. © SAGE Publishing, 2020
Foundations of CSR

• An ethical argument for CSR:

CSR is an argument based on two forms of ethical

reasoning--consequentialist (utilitarian) and categorical
(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
ethical principles, regardless of the outcomes).

Chandler, Strategic Corporate Social Responsibility,

41
5e. © SAGE Publishing, 2020
Foundations of CSR

• A moral argument for CSR:

CSR is an argument of moral reasoning that reflects the

relationship between a company and the society within
which it operates. It assumes firms recognize that 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.

Chandler, Strategic Corporate Social Responsibility,

42
5e. © SAGE Publishing, 2020
Foundations of CSR

• A rational argument for CSR:

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.

Chandler, Strategic Corporate Social Responsibility,

43
5e. © SAGE Publishing, 2020
Foundations of CSR

• An economic argument for CSR:

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 stakeholders. Simply put, CSR is a way of
matching corporate operations with stakeholder values
and expectations that are constantly evolving.

Chandler, Strategic Corporate Social Responsibility,

44
5e. © SAGE Publishing, 2020
Strategic CSR Debate

• Motion:

There are no absolute ethical or moral standards.

Chandler, Strategic Corporate Social Responsibility,

45
5e. © SAGE Publishing, 2020
Questions for Discussion and Review
1. What is the purpose of the for-profit firm? What value does it create for
society?
2. Define corporate social responsibility. What arguments in favor of CSR
seem most important to you? Are these factors prevalent among firms
today, or are they rare?
3. What are the four responsibilities of a firm outlined in Archie Carroll’s
pyramid of CSR model? Illustrate your definitions of each level with
corporate examples.
4. Milton Friedman stated that “few trends could so thoroughly undermine
the very foundations of our free society as the acceptance by corporate
officials of a social responsibility other than to make as much money for
their stockholders as possible.” What are two arguments in support of his
assertion and two against?
5. Why does this book favor the economic argument for CSR? Why is this
argument better than the ethical, moral, or rational arguments for CSR?
Do you agree?

Chandler, Strategic Corporate Social Responsibility,

46
5e. © SAGE Publishing, 2020
 CORPORATE SOCIAL
RESPONSIBILITY (CSR)
Lecturer: Dr. Xuanwei Cao
Office: BS226
Office Hour: 15:00-17:00 Wed.
Email: xuanwei.cao@xjtlu.edu.cn