To discuss examples of Corporate Social Responsibility and the Triple Bottom Line.

Assignment: Write a two paragraph or longer response to the following question – Can you describe a company that you believe engages in Corporate Social Responsibility (CSR)? Does the company make a commitment to the Triple Bottom Line, or does the company have more modest objectives? Your short essay answer should focus on a company that demonstrates a principle of Corporate Social Responsibility. The company may be attempting to improve on the Triple Bottom Line, or they may only be focused on a narrow interpretation of Corporate Social Responsibility. Your task will be to find a company that engages in CSR and/or sustainability initiatives. Then, read and post a reply to two of your classmates regarding their thoughts on Corporate Social Responsibility. Do you agree or disagree with your classmate’s interpretation of their company’s corporate social responsibility initiative? Why or why not? What thoughts can you share with your classmates regarding their description of corporate social responsibility at their described company? Rule: Post one (1) original thread and two (2) replies to other threads for a total of three (3) posts on the discussion board. Your original thread must be unique to you and your company’s circumstances. Rule: Only one post per company.Your post must be a unique company not discussed by any other post on this discussion board. Please discuss only one company in your post in order to give everyone a chance to focus on a single company in their example. Example: Frog’s Leap Winery had hosted a Sustainable Wine Grower’s conference each year since 2006. The company had also engaged in a number of sustainability initiatives, including solar panels for electricity and geothermal power generation. The company also provided full-time, year-round employment and benefits for all of their winery personnel. Thus, the company focused on “people, planet and profit” in their ongoing activities. While the company’s dryland farming initiatives may be under pressure due to an ongoing California drought, Frog’s Leap Winery had demonstrated an ongoing commitment to Corporate Social Responsibility.
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CHAPTER
9
Ethics,
Corporate Social
Responsibility,
Environmental
Sustainability,
and Strategy
LEARNING OBJECTIVES
LO1 Understand why the standards of ethical behavior in
business are no different from ethical standards in
general.
LO2 Recognize conditions that give rise to unethical
business strategies and behavior.
LO3 Gain an understanding of the costs of business
ethics failures.
LO4 Learn the concepts of corporate social responsibility
and environmental sustainability and how companies
balance these duties with economic responsibilities
to shareholders.
Linking Strategy, Ethics and
Social Responsibility
• In crafting and executing a strategy that
delivers value to both customers and
shareholders, does a firm have a duty to:
? Act in an ethical manner?
? Demonstrate socially responsible behavior by being a
committed corporate citizen?
? Adopt business practices that conserve natural
resources, protect the interest of future generations,
and preserve the well-being of the planet?
What Do We Mean by Business Ethics?
• Business ethics
? Is the application of ethical principles and standards
to the actions and decisions of business organizations
and the conduct of their personnel.
• How do ethics and business ethics differ?
? Ethical principles in business are not materially
different from ethical principles in general.
• Business actions
? Are judged by general ethical standards of society.
? Are not subject to more permissive standards.
Drivers of Unethical Strategies
and Business Behavior
Reasons for unethical behaviors:
• The view that “the business of business is
business, not ethics”
• Overzealous pursuit of wealth and other
selfish interests
• A company culture that fosters illegal and
unethical conduct
• Heavy pressures on managers to meet
performance targets
The Business Case for Ethical Strategies
• Deliberate pursuit of unethical strategies and
tolerance of unethical conduct is a risky and
costly practice from both a shareholder
perspective and a reputational standpoint.
• Adopting ethical strategies and engaging
only in ethical conduct are simply good
business.
• The Sarbanes-Oxley Act (2002)
? Requires that publically-traded firms have a code of
ethics or else explain in writing to the Securities and
Exchange Commission why they do not.
FIGURE
FIGURE
9.19.1 The Costs Companies Incur When Ethical Wrongdoing Is Discovered and Punished
Ensuring a Strong Commitment to
Business Ethics in Companies with
International Operations
• Three schools of thought about the extent to
which the ethical standards travel across
cultures and whether multinational firms can
apply the same set of ethical standards in all
of the locations where they operate:
? Ethical Universalism
? Ethical Relativism
? Integrative Social Contracts Theory
The School of Ethical Universalism
• According to the school of ethical
universalism…
? Some concepts of what is right and what is wrong are
universal and transcend most cultures, societies, and
religions.
? All societies, companies, and individuals are
accountable to a set of universal ethical standards.
? Where basic moral standards really do not vary
significantly according to local cultural beliefs,
traditions, or religious convictions, a multinational
company can develop a code of ethics that it applies
more or less evenly across its worldwide operations.
Examples of Universal Ethical
Principles or Norms
• Honesty
• Trustworthiness
• Respecting the rights of others
• Practicing the Golden Rule
• Avoiding unnecessary harm to
? Workers
? Users of a company’s product or service
• Oath of Hippocrates
? “First do no harm”
The School of Ethical Relativism
• This school of ethical thought holds that…
? What is to be deemed ethical or unethical behavior
must be judged by local social and moral standards.
? It is appropriate for local moral standards to take
precedence over ethical standards in a company’s
home market.
• The risks of ethical relativism
? The assumption that local morality is an adequate
guide for ethical behavior.
? Loss of the moral basis for enforcing companywide
ethical standards across the differing markets of a
multinational firm.
Integrative Social Contracts Theory
• The ethical standards a firm should uphold
are governed by:
1. A limited number of universal ethical principles that
are widely recognized as putting legitimate ethical
boundaries on actions and behavior in all situations.
2. The circumstances of local cultures, traditions, and
values that further prescribe what constitutes
ethically permissible behavior and what does not.
Ethics: It Is Not as Easy as It Seems
• Integrative social contracts theory provides:
? That “first order” universal ethical norms always take
precedence over “second order” local ethical norms
when local norms are more permissive.
• Ethical “gray areas”
? There are many instances where cross-country
differences in ethical norms create situations where it
is tough to draw a line in the sand between right and
wrong decisions, actions, and business practices.
Strategy, Corporate Social Responsibility
and Environmental Sustainability
• Engaging in corporate social responsibility
involves the firm’s assumption of a series
of responsibilities:
? Economic responsibility to shareholders
? Legal responsibility to comply with the laws of the
countries where it operates
? Ethical responsibility to abide by society’s norms
? Discretionary philanthropic responsibility to meet
the unmet needs of society
Common Corporate Social Responsibility
(CSR) Initiatives
• Efforts to employ an ethical strategy and observe ethical
principles in operating the business.
• Making charitable contributions, supporting community service
endeavors, engaging in broader philanthropic initiatives, and
reaching out to make a difference in the lives of the
disadvantaged.
• Actions to protect the environment and, in particular, to
minimize or eliminate any adverse impact on the environment
stemming from the firm’s own business activities.
• Actions to create a work environment that enhances the quality
of life for employees.
• Actions to build a workforce that is diverse with respect to
gender, race, national origin, and other aspects that different
people bring to the workplace.
What Do We Mean by Sustainability and
Sustainable Business Practices?
• Environmental sustainability strategies:
? Entail actions to operate businesses to protect and
enhance natural resources and ecological support
systems, to guard against outcomes that endanger
the planet, and to be sustainable for centuries.
? Are directed at improving a firm’s triple bottom line
(TBL)—its performance on economic, environment,
and social metrics.
?
“Profit, Planet, People”
The Business Case for Socially
Responsible Behavior
• Reasons why the exercise of corporate
social responsibility is good business:
? Such actions can lead to increased buyer patronage.
? A strong commitment to socially responsible behavior
reduces the risk of reputation-damaging incidents.
? Socially responsible actions yield internal benefits
(e.g., employee recruiting, retention, and training
costs) and can improve operational efficiency.
? Well-conceived social responsibility strategies work to
the advantage of shareholders.
Southwest Airlines Co (NYS: LUV)
Exchange rate used is that of the Year End reported date
As Reported Annual Income Statement
Report Date
Currency
Audit Status
Consolidated
Scale
Passenger revenues
Freight revenues
Special revenue adjustment
Other revenues
Total operating revenues
Salaries, wages & benefits
Fuel & oil
Maintenance materials & repairs
Aircraft rentals
Landing fees & other rentals
Depreciation & amortization
Acquisition & integration
Other operating expenses
Total operating expenses
Operating income
Interest expense
Capitalized interest
Interest income
Other gains (losses), net
Total other expenses (income)
Income before income taxes
Federal income taxes (benefit) – current
State income taxes (benefit) – current
Total current taxes (benefit)
Federal income taxes – deferred
State income taxes (benefit) – deferred
Total deferred taxes
Provision for income taxes
Net income
Weighted average shares outstanding – basic
Weighted average shares outstanding – diluted
Year end shares outstanding
Net income per share – basic
Net income per share – diluted
Cash dividends declared per common share
Number of full time employees
Total number of employees
Number of common stockholders
12/31/2016
USD
Not Qualified
12/31/2015
USD
Not Qualified
Yes
Thousands
18594000
171000
1660000
20425000
6798000
3647000
1045000
229000
1211000
1221000
2514000
16665000
3760000
122000
47000
24000
-162000
-213000
3547000
778000
69000
847000
426000
30000
456000
1303000
2244000
627000
633000
615160.779
3.58
3.55
0.375
53500
53500
12850
Yes
Thousands
18299000
179000
172000
1170000
19820000
6383000
3616000
1005000
238000
1166000
1015000
39000
2242000
15704000
4116000
121000
31000
9000
-556000
-637000
3479000
1292000
114000
1406000
-97000
-11000
-108000
1298000
2181000
661000
669000
647601.617
3.3
3.27
0.285
49583
49583
13518
12/31/2014
USD
Not Qualified
12/31/2013
USD
Not Qualified
12/31/2012
USD
Not Qualified
Yes
Thousands
17658000
175000
772000
18605000
5434000
5293000
978000
295000
1111000
938000
126000
2205000
16380000
2225000
130000
23000
7000
-309000
-409000
1816000
203000
29000
232000
421000
27000
448000
680000
1136000
687000
696000
675594.084
1.65
1.64
0.22
46278
13762
Yes
Thousands
16721000
164000
814000
17699000
5035000
5763000
1080000
361000
1103000
867000
86000
2126000
16421000
1278000
131000
24000
6000
32000
-69000
1209000
355000
44000
399000
62000
-6000
56000
455000
754000
710000
718000
700474.688
1.06
1.05
0.13
44831
44831
13850
Yes
Thousands
16093000
160000
835000
17088000
4749000
6120000
1132000
355000
1043000
844000
183000
2039000
16465000
623000
147000
21000
7000
181000
62000
685000
-45000
12000
-33000
287000
10000
297000
264000
421000
750000
757000
730319.489
0.56
0.56
0.035
45861
45861
13687
Our textbook defines corporate social responsibility (CSR) as an organization
performing actions that will earn trust and respect from stakeholders, operating
ethically, having a great place to work, respecting the environment, and finding ways
to better the environment (Gamble, 2017). In this week’s discussion, I will discuss how
AutoZone strives for increasing methods of environmental responsibility in their
attempt of maintaining their corporate social responsibility. AutoZone’s current
initiatives focuses on recycling, reducing fuel consumption and commercial vehicle
CO2’s per vehicle. Their recycling efforts for their customers include collecting used
oil (8.5 million gallons per year), lead-acid batteries (millions per year), and scrap
metal that includes rotors, brake pads, radiators, and water pumps (13,000 tons per
year) (AutoZone, Inc., 2017). Their recycling efforts continue through their operations
usage as they recycle cardboard (22,000 tons per year), wood pallets (885,000 per
year), and shrink-wrap (780 tons per year) (AutoZone, Inc., 2017). Fuel and emission
improvement initiatives add to respecting the environment as it strives for cleaner
air, resource consumption, and reduced CO2’s. AutoZone has approached this through
reduced idle time through utilizing auxiliary power units, advanced air farings and
telematics in their trailers, reduced speed limiters, and converting commercial
vehicles from Ford F150 pickup campers to Ford E150 vans and moving from 6 cylinder
vehicles to 4 cylinder models (AutoZone, Inc., 2017).
Our textbook describes the triple bottom line as three performance metrics:
economic, social, and environmental (Gamble, 2017). For the question of does the
company make a commitment to the Triple Bottom Line, our answer would be yes.
We have described above how this organization practices initiatives to perform well
with the environment in mind. Socially, AutoZone has contributed to ArtsMemphis,
Lifeblood, Mid-South Food Bank, National Civil Rights Museum, The Salvation Army,
and St. Jude Children’s Research Hospital (AutoZone, Inc., 2017). These contributions
range from organizing informational events, donating blood, donating food, volunteer
and IT support, fundraising, and financial contributions.
REFERENCES
AutoZone, Inc. (2017). AutoZone in the Community. Retrieved
from: https://www.autozone.com/company/community-relations/autozone-in-the-community.html
AutoZone, Inc. (2017). Environmental Responsibility. Retrieved
from: https://www.autozone.com/company/environmental-responsibility/
Gamble, J., Peteraf, M., & Thompson, A. (2017). Essentials of Strategic Management,
5th Edition. NY, NY: McGraw-Hill.
According to the Wall Street Journal dated October 17, 2017, many companies and
their leaders embark in a sustainable business strategy, which includes minimizing
their carbon footprint, work with sustainable suppliers and produce a healthier or
eco-friendly product for the consumers. This strategy is often part of their marketing
strategy and business model. Unfortunately, investing in corporate social
responsibility (CSR) can be a double-edged sword if the end result is not profitable.
84% of CEO’s are more likely to be fired if financial obligations are not met. But on
the flip side if they are met, then the 53% are less likely to be fired.
CSR can give a company a competitive advantage and those emphasizing
environmental sustainable business practices effectively, can contribute to their
triple bottom line (Gamble, Peteraf, Thompson, 2017). Lego® Corporation is a
company that has great success in achieving the triple bottom line. They provide safe,
toys to inspire creativity, reasoning, and logic for the child. They are committed to
the 10 Children’s rights and business principles that guide organizations on how to
conduct business responsibly towards children. They are committed to reducing CO2
emissions and to build 100% renewable energy and as a testimonial they have recently
invested in an offshore windfarm. They have high ethical standards and hold their
employees and suppliers to the same standards ( Lego®, 2017).
Fuhrmans, V. (2017, Oct. 17). When doing good ends badly for CEOs. Wall Street Journal. Retrieved at
www.wsj.com.
Gamble, J., Peteraf, M., & Thompson, A. (2017). Essentials of strategic management, 5thedition. NY, NY:
McGraw-Hill.
Lego. (2017). About us. Retrieved from https://www.lego.com/en-us/aboutus/responsibility.
Dated November 28, 2017.

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