Untitled Page

Corporate Social Responsibility (CSR) by Anita Cava, JD ClassroomActivities Lesson Plan Activity #1 Lesson Plan Activity #1 part 2 Lesson Plan Activity #2 Lesson Plan Activity #2 part 2 Lesson Plan Activity #3 The module touches on major issues that concern global corporations in the 21st century and weaves strands from business, law, social studies, and politics. Part of its purpose is to help students understand the arguments for and against CSR and to have them form an opinion on whether CSR should be mandatory or voluntary. By engaging in this critical thinking, students will be better able to make informed decisions regarding an increasingly important subject in our business environment. An interesting film that may be used to spur discussions regarding corporate social responsibility is The Corporation. Dir. Jennifer Abbott and Mark Achbar. Zeitgeist Films, 2004. For more information, see http://www.zeitgeistfilms.com/corporation/. Note: this is a heavy-handed documentary whose central claim is that, by design, corporations are detrimental to society. (See a review of the film at http://www.avclub.com/content/node/17844.) The entry on the film in Wikipedia offers a good summary of the film. A conservative response may be found in Milton Friedman, "The Social Responsibility of Business is to Increase Its Profits," The New York Times Magazine (September 30, 1970) - freely available on-line at http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html Activity #1: Public or Private Business? Part I:- Private Business Teacher Prompt: Businesses are generally organized in two forms, private or public. Private businesses are owned by the people who actually operate the business. As a result, private businesses -- often operated as a sole proprietorship by one person or as a partnership with two or more owners -- can make decisions about how they spend the money earned by the business without having to ask other people. In other words, small businesses do not have to answer to (public) legal owners, their shareholders. Describe the following scenario to your students, or, have them read the Fisher Island article online. The minimum wage is $6.15/hour. Studies show that a living wage is about $12.00/hour. This is how much it takes a full-time worker to be able to get food, clothing and shelter for his or her family. Should an employer pay her or his employees the minimum wage or a living wage? Why? Should an unmarried person be paid less than a married person with children? See Mimi Swartz, "RESIDENTS/WORKERS; Shop Stewards on Fantasy Island?", New York Times Magazine, 10 June 2007 (discussing the low wages of workers on Fisher Island, home to the fabulously wealthy in Miami. The New York Times may require free registration in order to access this article. Accessed 27 November 2007.) http://query.nytimes.com/gst/fullpage.html? res=9F04E0D81130F933A25755C0A9619C8B63 Classroom discussion: Ask the students to answer the following questions, pretending that they are the owners of a small successful clothing business that they own with a partner. 1) How important is it to you if you are the business owner who will make less this year by paying employees more? (Consider core values: Responsibility, Citizenship, Integrity, Respect) 2) What is a possible benefit of paying people this amount of money? (People can spend more in their community, can get better child care and health care, and they may be more loyal and long-term workers.) (Core values: Responsibility, Respect) 3) What is a possible harm of paying this much money? (The business owner may possibly have to shut down.) (Core values: Citizenship, Integrity) 4) How much income or profit is enough for any one business owner? Are you as a business owner willing to make less money in order to help your employees lead a better life by paying higher wages, providing health care insurance and maybe even other benefits like child care or retirement? What information would you need in order to make decisions on these questions? What criteria would you use to decide on wages and benefits? Part II- Public Business Teacher Prompt: Many businesses are "public" businesses because they are organized as corporations that sell "shares" or a small piece of the business to people. If you buy a share of Great Clothes Corporation for today's price, you are a part owner of the company and are called a "shareholder." You can go to annual meetings of the company and get information about the company, but you cannot decide how the company is being run. You do not decide how much to pay employees. As a shareholder, you are paid a "dividend" or a return on your share at the end of every year. The amount of this dividend depends upon how much money Great Clothes Corporation made this year. This time the students must pretend to be the CEO of a public company. They will have to consider all the arguments above but also have to include another important dimension: Shareholders of the corporation have the right to expect a responsible return on their investment. The company must carefully decide how it spends its money. So, it is important to think about RESPONSIBILITIES to the shareholder AND to the stakeholders. Stakeholders include the employee, who usually does not own a share of the business; the community where the employee lives and spends his or her money; and others who are involved with the business, such as customers and suppliers. The environment is also affected by corporate decisions. Describe the following scenario to your students: The minimum wage is $6.15/hour and a living wage in your community is more like $12/hour. This is how much a full-time worker must be paid to be able to get food, clothing and shelter for his or her family. Should the Great Clothes Corporation pay the minimum wage or a living wage? What factors should a business take into account when determining how much to pay its workers? Ask the students to reconsider the four discussion questions from Part I (of this activity) from the point of view of a CEO of a public company. Some other questions the class might want to consider: Is it the government's job to help people who do not earn enough to live in a city? If you believe the government should help, should it do so by increasing taxes (to redistribute funds to the poor) or should it do so by raising the minimum wage or by enacting some other form of regulation? What are the strongest arguments FOR and AGAINST government intervention in the employment market? What should a business owner take into consideration when deciding pay scales? Activity # 2. A Case Study: What is Corporate Social Responsibility? Distribute copies of the following two definitions of CSR to your students. Two Definitions of Corporate Social Responsibility: 1) "The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." (World Business Council for Sustainable Development, "Making Good Business Sense" http://www.mallenbaker.net/csr/CSRfiles/definition.html) 2) "CSR refers to the ethical behavior of a company toward various stakeholders. The term may be interpreted to involve compliance with the law, but it is generally associated with voluntary initiatives - such as codes of conduct; social and environmental reporting; and improvements in occupational health, safety and environmental management systems" (UNRISD, 2003, p.109). Part I: The Tylenol Case Teacher Prompt: The Johnson & Johnson Tylenol case is a model for socially responsible decision-making. Making decisions at Johnson & Johnson is fairly straightforward. The guiding principles of the company's Credo are to be found on every wall and on almost every desk. This framework of organizational priorities was critical in the handling of the company's famous Tylenol crisis. Hand out the Tylenol story, or have students go online to research the case study. http://www.mallenbaker.net/csr/CSRfiles/crisis02.html and a copy of the Credo, which is just one page. http://www.jnj.com/our_company/our_credo/index.htm;j sessionid=RQUXI1QGKCCKQCQPCCGSU0A . Conduct a classroom discussion of the Johnson & Johnson Tylenol case, addressing the following issues: Would you expect a company to take every bottle of Tylenol off every shelf in every drugstore in the US because of one incident in one city? Notice the list of corporate priorities listed in the Credo. Are these ones that you would embrace if it were your business? What if you were a consumer? What if you were going to buy a Tylenol when this happened? Do most businesses seem to have this kind of Credo? Notice the "transparency" evident in this story. J&J was forthright and candid about every aspect of the incident and its resolution. Part II: Find a Company with a Code of Conduct (Credo). Ask each student to research a company he or she is interested in to find out if it has a Code of Conduct and to see what it says. How does it compare to the Johnson & Johnson Credo? Does it seem to regulate employee behavior by making rules - do not accept gifts, do not do business with family -- or does it address more profound issues of corporate/business decisions - we care about community well-being, we are taking steps to protect the environment? Have the students write a one page summary of their conclusions. Activity #3: Wal-Mart VS Costco Teacher Prompt: Set the stage for this activity by summarizing the following information for the students: To a large extent CSR emerged in response to the demands of activist groups that became concerned about the way large, multinational corporations and their suppliers were treating workers and the environment. The activist groups are often called NGOs (non-governmental organizations) and they exist all over the world. One good example of the results of the efforts of an NGO can be found by studying the actions and reactions of Gap, Inc. Distribute the following press release, or ask your students to check it out online: "In 2002, UNITE ... the nation's largest apparel and textiles workers union,... began working with student groups and other concerned citizens, [and] focused attention on the conditions workers face in the global apparel industry...[It] encouraged industry leaders and policy makers to adopt anti-sweatshop policies and practices." http://www.csrwire.com/PressReleasePrint.php?id=2654 Discuss the following information with the students: Activist groups picketed and demonstrated in front of Gap's corporate offices in San Francisco, demanding that working conditions in third world countries be improved. Realizing that its reputation would suffer if these activities continued to be part of daily news, Gap, Inc. decided to move toward meeting the NGO demands. By 2004, Gap Inc. publicized its efforts to address its sweatshop problems by issuing a 68 page CSR report featuring a worldwide review of its factories worldwide for compliance with acceptable standards for working conditions. The students can visit the following two websites if they want more information on the power of NGOs: http://www.gapinc.com/public/documents/CSR_Report_04.pdf; http://www.socialfunds.com/news/release.cgi/4158.html Gap, Inc. illustrates some of the fundamental reasons that companies now have to consider their policies when it comes to their employees, their suppliers and their consumers and have had to develop a CSR strategy. Wal-Mart and Costco are two examples. Ask each student to go online to the following two websites: Ethical Analysis of Shopping at Wal-Mart http://www.scu.edu/ethics/publications/ethicalperspectives/wal-mart.html Movie: Wal-Mart: The High Cost of Low Price http://www.walmartmovie.com/ Greenhouse, S., "How Costco Became the Anti-Wal-Mart" New York Times, July 17, 2005, http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?ei=5088&en= 8b31033c5b6a6d68&ex=1279252800&partner=rssnyt&emc=rss&pagewanted=print Have the students write a position paper on which company, Wal-Mart or Costco, they think is a better model for business and CSR. Wal-Mart offers the lowest price every day. It also pays its employees the lowest wages and offers little in the way of health care coverage and other benefits. Yet, Wall Street loves the company, if one considers the strength of the stock. On the other hand, Costco maintains a low price, but not the lowest, and pays its employees well. Which is the most socially responsible company? Activity #4: CSR: Triple bottom line considerations Teacher Prompt: Summarize the following information for your students: Although there is still no consensus as to what exactly constitutes an ethical business, sustainable development is becoming the "new moral code" in business and in its value chains. Today, more and more businesses are using aspects of sustainability as the basis for promoting concrete changes in their practices. The World Commission on Environment and Development (WCED) proposed a definition for this dimension of CSR in 1987: Sustainable development "meets the needs and wants of the present without compromising the ability of future generations to meet their own wants and needs" (WCED, 1987a, p.43). The term has been widely adopted by business to showcase their ethical values by demonstrating commitment to the triple-bottom line. This refers to corporate reporting that includes not only traditional financial considerations, but also CSR-related costs and benefits, such as the business' effect upon community and the environment. Although the notion of ethics has gone a long way towards driving business to undertake responsible trade and sustainable business practices, it also leaves room for powerful large companies to manipulate the concept and use it merely to promote a good public image, through advertising and branding, and not to engage deeply in the problem (Tallontire et al., 2001). For example, in 1999 Philip Morris reportedly donated US$60 million to charity but spent a further $108 million advertising its generosity around the world (Adbusters, 2001). This raises questions as to whether businesses are also able to manipulate ethical decision-making and fool consumers. Have students pick two out of the three (or choose two on their own) corporate websites to determine corporate commitment to CSR. Is there a commitment in terms of a genuine code of conduct (credo) and transparency such as at Johnson & Johnson? Is there a commitment to reporting both corporate successes and challenges such as at Gap, Inc.? Or, does it seem as though the website is advertising, what is called "greenwashing." Ask students to address these concerns when they analyze the two corporate web sites they have chosen, and determine if they think the corporations are greenwashing or not. Possible websites showing business commitment towards social and environmental issues: 1. Starbucks: http://starbucks.co.uk/en-GB/_Social+Responsibility/ 2. Coca-Cola: http://www.thecoca-colacompany.com/ourcompany/pdf/corporate_responsibility_review.pdf Ben & Jerry's: http://www.benjerry.com/our_company/our_mission/index.cfm

Corporate Social Responsibility (CSR)

by Anita Cava, JD

ClassroomActivities

Lesson Plan Activity #2 part 2

Lesson Plan Activity #3

The module touches on major issues that concern global corporations in the 21st century and weaves strands from business, law, social studies, and politics. Part of its purpose is to help students understand the arguments for and against CSR and to have them form an opinion on whether CSR should be mandatory or voluntary. By engaging in this critical thinking, students will be better able to make informed decisions regarding an increasingly important subject in our business environment.

An interesting film that may be used to spur discussions regarding corporate social responsibility is The Corporation. Dir. Jennifer Abbott and Mark Achbar. Zeitgeist Films, 2004. For more information, see http://www.zeitgeistfilms.com/corporation/. Note: this is a heavy-handed documentary whose central claim is that, by design, corporations are detrimental to society. (See a review of the film at http://www.avclub.com/content/node/17844.) The entry on the film in Wikipedia offers a good summary of the film. A conservative response may be found in Milton Friedman, "The Social Responsibility of Business is to Increase Its Profits," The New York Times Magazine (September 30, 1970) - freely available on-line at http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html

Activity #1: Public or Private Business?

Part I:- Private Business

Teacher Prompt:

Businesses are generally organized in two forms, private or public. Private businesses are owned by the people who actually operate the business. As a result, private businesses -- often operated as a sole proprietorship by one person or as a partnership with two or more owners -- can make decisions about how they spend the money earned by the business without having to ask other people. In other words, small businesses do not have to answer to (public) legal owners, their shareholders.

Describe the following scenario to your students, or, have them read the Fisher Island article online.

The minimum wage is $6.15/hour. Studies show that a living wage is about $12.00/hour. This is how much it takes a full-time worker to be able to get food, clothing and shelter for his or her family. Should an employer pay her or his employees the minimum wage or a living wage? Why? Should an unmarried person be paid less than a married person with children?

See Mimi Swartz, "RESIDENTS/WORKERS; Shop Stewards on Fantasy Island?", New York Times Magazine, 10 June 2007 (discussing the low wages of workers on Fisher Island, home to the fabulously wealthy in Miami. The New York Times may require free registration in order to access this article. Accessed 27 November 2007.) http://query.nytimes.com/gst/fullpage.html?
res=9F04E0D81130F933A25755C0A9619C8B63

Classroom discussion:

Ask the students to answer the following questions, pretending that they are the owners of a small successful clothing business that they own with a partner.

1) How important is it to you if you are the business owner who will make less this year by paying employees more? (Consider core values: Responsibility, Citizenship, Integrity, Respect)

2) What is a possible benefit of paying people this amount of money? (People can spend more in their community, can get better child care and health care, and they may be more loyal and long-term workers.) (Core values: Responsibility, Respect)

3) What is a possible harm of paying this much money? (The business owner may possibly have to shut down.) (Core values: Citizenship, Integrity)

4) How much income or profit is enough for any one business owner? Are you as a business owner willing to make less money in order to help your employees lead a better life by paying higher wages, providing health care insurance and maybe even other benefits like child care or retirement? What information would you need in order to make decisions on these questions? What criteria would you use to decide on wages and benefits?

Part II- Public Business
Teacher Prompt:
Many businesses are "public" businesses because they are organized as corporations that sell "shares" or a small piece of the business to people. If you buy a share of Great Clothes Corporation for today's price, you are a part owner of the company and are called a "shareholder." You can go to annual meetings of the company and get information about the company, but you cannot decide how the company is being run. You do not decide how much to pay employees. As a shareholder, you are paid a "dividend" or a return on your share at the end of every year. The amount of this dividend depends upon how much money Great Clothes Corporation made this year.

This time the students must pretend to be the CEO of a public company. They will have to consider all the arguments above but also have to include another important dimension: Shareholders of the corporation have the right to expect a responsible return on their investment. The company must carefully decide how it spends its money. So, it is important to think about RESPONSIBILITIES to the shareholder AND to the stakeholders. Stakeholders include the employee, who usually does not own a share of the business; the community where the employee lives and spends his or her money; and others who are involved with the business, such as customers and suppliers. The environment is also affected by corporate decisions.

Describe the following scenario to your students:
The minimum wage is $6.15/hour and a living wage in your community is more like $12/hour. This is how much a full-time worker must be paid to be able to get food, clothing and shelter for his or her family. Should the Great Clothes Corporation pay the minimum wage or a living wage? What factors should a business take into account when determining how much to pay its workers?

Ask the students to reconsider the four discussion questions from Part I (of this activity) from the point of view of a CEO of a public company.

Some other questions the class might want to consider:

Is it the government's job to help people who do not earn enough to live in a city? If you believe the government should help, should it do so by increasing taxes (to redistribute funds to the poor) or should it do so by raising the minimum wage or by enacting some other form of regulation? What are the strongest arguments FOR and AGAINST government intervention in the employment market?

What should a business owner take into consideration when deciding pay scales?

Activity # 2. A Case Study: What is Corporate Social Responsibility?

Distribute copies of the following two definitions of CSR to your students.

Two Definitions of Corporate Social Responsibility:

1) "The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." (World Business Council for Sustainable Development, "Making Good Business Sense" http://www.mallenbaker.net/csr/CSRfiles/definition.html)
2) "CSR refers to the ethical behavior of a company toward various stakeholders. The term may be interpreted to involve compliance with the law, but it is generally associated with voluntary initiatives - such as codes of conduct; social and environmental reporting; and improvements in occupational health, safety and environmental management systems" (UNRISD, 2003, p.109).
Part I: The Tylenol Case
Teacher Prompt:
The Johnson & Johnson Tylenol case is a model for socially responsible decision-making.
Making decisions at Johnson & Johnson is fairly straightforward. The guiding principles of the company's Credo are to be found on every wall and on almost every desk. This framework of organizational priorities was critical in the handling of the company's famous Tylenol crisis.
Hand out the Tylenol story, or have students go online to research the case study. http://www.mallenbaker.net/csr/CSRfiles/crisis02.html and a copy of the Credo, which is just one page. http://www.jnj.com/our_company/our_credo/index.htm;j
sessionid=RQUXI1QGKCCKQCQPCCGSU0A .

Conduct a classroom discussion of the Johnson & Johnson Tylenol case, addressing the following issues:
Would you expect a company to take every bottle of Tylenol off every shelf in every drugstore in the US because of one incident in one city?

Notice the list of corporate priorities listed in the Credo. Are these ones that you would embrace if it were your business? What if you were a consumer? What if you were going to buy a Tylenol when this happened?

Do most businesses seem to have this kind of Credo? Notice the "transparency" evident in this story. J&J was forthright and candid about every aspect of the incident and its resolution.

Part II: Find a Company with a Code of Conduct (Credo).

Ask each student to research a company he or she is interested in to find out if it has a Code of Conduct and to see what it says. How does it compare to the Johnson & Johnson Credo? Does it seem to regulate employee behavior by making rules - do not accept gifts, do not do business with family -- or does it address more profound issues of corporate/business decisions - we care about community well-being, we are taking steps to protect the environment? Have the students write a one page summary of their conclusions.

Activity #3: Wal-Mart VS Costco

Teacher Prompt:

Set the stage for this activity by summarizing the following information for the students:
To a large extent CSR emerged in response to the demands of activist groups that became concerned about the way large, multinational corporations and their suppliers were treating workers and the environment. The activist groups are often called NGOs (non-governmental organizations) and they exist all over the world. One good example of the results of the efforts of an NGO can be found by studying the actions and reactions of Gap, Inc.

Distribute the following press release, or ask your students to check it out online:
"In 2002, UNITE ... the nation's largest apparel and textiles workers union,... began working with student groups and other concerned citizens, [and] focused attention on the conditions workers face in the global apparel industry...[It] encouraged industry leaders and policy makers to adopt anti-sweatshop policies and practices." http://www.csrwire.com/PressReleasePrint.php?id=2654

Discuss the following information with the students:

Activist groups picketed and demonstrated in front of Gap's corporate offices in San Francisco, demanding that working conditions in third world countries be improved. Realizing that its reputation would suffer if these activities continued to be part of daily news, Gap, Inc. decided to move toward meeting the NGO demands. By 2004, Gap Inc. publicized its efforts to address its sweatshop problems by issuing a 68 page CSR report featuring a worldwide review of its factories worldwide for compliance with acceptable standards for working conditions.

The students can visit the following two websites if they want more information on the power of NGOs:
http://www.gapinc.com/public/documents/CSR_Report_04.pdf; http://www.socialfunds.com/news/release.cgi/4158.html

Gap, Inc. illustrates some of the fundamental reasons that companies now have to consider their policies when it comes to their employees, their suppliers and their consumers and have had to develop a CSR strategy. Wal-Mart and Costco are two examples.

Ask each student to go online to the following two websites:

Ethical Analysis of Shopping at Wal-Mart http://www.scu.edu/ethics/publications/ethicalperspectives/wal-mart.html
Movie: Wal-Mart: The High Cost of Low Price http://www.walmartmovie.com/
Greenhouse, S., "How Costco Became the Anti-Wal-Mart" New York Times, July 17, 2005, http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?ei=5088&en=
8b31033c5b6a6d68&ex=1279252800&partner=rssnyt&emc=rss&pagewanted=print

Have the students write a position paper on which company, Wal-Mart or Costco, they think is a better model for business and CSR. Wal-Mart offers the lowest price every day. It also pays its employees the lowest wages and offers little in the way of health care coverage and other benefits. Yet, Wall Street loves the company, if one considers the strength of the stock. On the other hand, Costco maintains a low price, but not the lowest, and pays its employees well. Which is the most socially responsible company?

Activity #4: CSR: Triple bottom line considerations

Teacher Prompt:

Summarize the following information for your students:

Although there is still no consensus as to what exactly constitutes an ethical business, sustainable development is becoming the "new moral code" in business and in its value chains. Today, more and more businesses are using aspects of sustainability as the basis for promoting concrete changes in their practices. The World Commission on Environment and Development (WCED) proposed a definition for this dimension of CSR in 1987: Sustainable development "meets the needs and wants of the present without compromising the ability of future generations to meet their own wants and needs" (WCED, 1987a, p.43). The term has been widely adopted by business to showcase their ethical values by demonstrating commitment to the triple-bottom line. This refers to corporate reporting that includes not only traditional financial considerations, but also CSR-related costs and benefits, such as the business' effect upon community and the environment.

Although the notion of ethics has gone a long way towards driving business to undertake responsible trade and sustainable business practices, it also leaves room for powerful large companies to manipulate the concept and use it merely to promote a good public image, through advertising and branding, and not to engage deeply in the problem (Tallontire et al., 2001). For example, in 1999 Philip Morris reportedly donated US$60 million to charity but spent a further $108 million advertising its generosity around the world (Adbusters, 2001). This raises questions as to whether businesses are also able to manipulate ethical decision-making and fool consumers.

Have students pick two out of the three (or choose two on their own) corporate websites to determine corporate commitment to CSR. Is there a commitment in terms of a genuine code of conduct (credo) and transparency such as at Johnson & Johnson? Is there a commitment to reporting both corporate successes and challenges such as at Gap, Inc.? Or, does it seem as though the website is advertising, what is called "greenwashing."

Ask students to address these concerns when they analyze the two corporate web sites they have chosen, and determine if they think the corporations are greenwashing or not.

Possible websites showing business commitment towards social and environmental issues:

1. Starbucks: http://starbucks.co.uk/en-GB/_Social+Responsibility/
2. Coca-Cola: http://www.thecoca-colacompany.com/ourcompany/pdf/corporate_responsibility_review.pdf

Ben & Jerry's: http://www.benjerry.com/our_company/our_mission/index.cfm