Analyze how new social and environmental demands from a variety of stakeholders pose new risks and opportunities to business leaders.

Western firms operating in or sourcing from developing countries are increasingly held responsible for a range of issues such as climate change, labor rights and human rights that have previously been seen as outside a firm’s sphere of influence (Reich 1998). Today stakeholders as diverse as investors, employees, the media, NGOs and customers have strong views on how corporations should be run.
 

One example is Nike, which owned no factories in the US but purchased shoes from factories in Indonesia, China and Vietnam. Nike came under severe criticism in the mid 1990s because Nike’s suppliers had forced workers to work extremely long shifts under dangerous conditions. As a response to the criticism, Nike issued its own code of conduct for suppliers. Another example is Wal-Mart which according to Jon Entine, a journalist with the magazine Ethical Corporation, has turned “from evil empire to jolly green giant” (Entine 2008: 36). Wal-Mart now works with suppliers on greening its supply chain including increasing the purchase of organic cotton, improving energy efficiency, etc.
 

The course addresses the following key questions:

1. What drives the Corporate Social Responsibility agenda?
2. How should business respond: Minimizing business risk
3. How should business respond: Maximizing business opportunity
4. Limits to CSR
5. Managing CSR initiatives: Codes of conduct
6. Reporting: benefits and drawbacks
7. Institutional investors and socially responsible investments
8. The crystal ball: New CSR issues and challenges?

Key words: Corporate social responsibility (CSR), sustainability, business environment, strategy, management

Development of personal competences:
Students will engage with each other in case discussions and participate in staged debates where they will be asked to challenge each other and/or defend or critique certain positions. In addition, students will be asked to provide perspectives that reflect their backgrounds (e.g. major, nationality and practical experiences).

Introduction: what drives the Corporate Social Responsibility agenda?

Session 1 provides a brief overview of the development of corporate social responsibility. The section also addresses the impact of globalization on business concerning social and environmental issues.

Ruth Aguielera, Deborah E. Rupp, Cythia A. Williams and Jyoti Ganapathi, “Putting the “S” Back in Corporate Social Responsibility: A Multi-Level Theory of Social Change in Organizations”. In Academy of Management Review, Vol. 33, No. 3, 2007: 836-863.

Dana Brown, Anne Roemer-Mahler and Antje Vetterlein (2009). “Theorising Transnational Corporations as Social Actors: An Analysis of Corporate Motivations”, paper presented at a research workshop, Copenhagen Business School, November 5-6, 2009.

Colin Crouch (2006). “Modelling the Firm in its Market and Organizational Environment: Methodologies for Studying Corporate Social Responsibility”. In Organization Studies 27(10): 1533-1551.

Thomas Donaldson, “The Stakeholder Theory of the Corporation”. In Academy of Management Review, 1995.

Milton Friedman, New York Times Magazine, September 13, 1970.

The Economist, special issue on CSR, January 2008

Case: Tesco: Delivering the Goods (B): IMD-3-1956

Optional

Josh D. Margolis and James P. Walsh, People and Profits? The Search for a Link Between a Company´s Social and Financial Performance, Lawrence Erlbaum Associates, Publishers, Mahwah, New Jersey, 2001.

Session 2 and 3: How should business respond? Minimizing business risk, maximizing business opportunity

Isabelle Maignan and David A. Ralston (2002). “Corporate Social Responsibility in Europe and the U.S.: Insights from Businesses' Self-Presentations”. In Journalof International Business Studies, Vol. 33.

Michael Porter and Mark Kramer, “The Competitive Advantage of Corporate Philanthropy: Competitive Context”. In Harvard Business Review, 2002.

Michael Porter and Mark Kramer, “Strategy and Society. In Harvard Business Review, 2006 (to be handed out in class)

David Vogel, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility, California Management Review, Washington DC, 2005.

Case: Austin and Reavis, HBS 9-303-055, “Starbucks and Conservation International”

Go to Starbucks website. See what they have to say about fair-trade http://www.starbucks.com/aboutus/csr.asp

If at all possible visit a Starbucks. Look at the price list for coffee beans:

Which are most expensive?

Why the price difference?

Ask if they have FairTrade coffee

Ask them if they know what the fairTrade label means?

Ask how much of the total beans sold would they say is FairTrade?

What did you learn about Starbucks’ achievement of Fair Trade goals?

Session 4: Limits to CSR – 24 September 2009

Deborah Doane, “The myth of CSR: The problem with assuming that companies can do well while also doing good is that markets don’t really work that way”. In Stanford Social Innovation Review, Fall, 2005: 23-29.

Timothy Devinney (2009). “Is The Socially Responsible Corporation a Myth? The Good, Bad and Ugly of Corporate Social Responsibility”. In Academy of Management Perspectives, forthcoming May.

Ethan B. Kapstein, “The Corporate Ethics Crusade”. In Foreign Affairs, September/October 2001.

Dara O’Rourke, Smoke from a Hired Gun: A Critique of Nike’s Labor and Environmental Auditing in Vietnam as performed by Ernst and Young, report published by the Transnational Resource and Action Center: San Francisco, November 10, 1997 available at the Internet at:

http://nature.berkeley.edu/orourke/PDF/smoke.pdf

Robert Reich, “The New Meaning of Corporate Social Responsibility”. In California Management Review, winter, 40, 2, 1998.

Case: Stanford case: “Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (A). By David P Baron et al

Optional

K. Bondy, David Matten and Jeremy Moon, “The Adoption of Voluntary Codes of Conduct in MNCs”: A three country comparative study. In Business and Society Review 109(4): 449-477.

Session 5: Managing CSR issues: Codes of conduct – October 1

David Vogel, “Private Global Business Regulation” in Annual Review of Political Science, Vol. 11, 2008:261-82. Article can be found at: http://www.haas.berkeley.edu/faculty/pdf/vogel_david.pdf

Jette Steen Knudsen, “Decoupling CSR announcements from implementation: an examination of structural determinants of UN Global Compact delistings”, Academy of Management Conference, 2010.

Richard Locke, Fei Qin and Alberto Brause, “Does Monitoring Improve Labor Standards? Lessons from Nike”, MIT Sloan Working Paper No. 4612-06, July 2006.

Richard Locke and Monica Romis, “Beyond Codes of Conduct: Work Organization and Labor Standards in two Mexican Garment Factories”, Working Paper No. 4617-06, MIT, 2006.

Dara O’Rourke, “Monitoring the monitors: A Critique of Corporate Third-party Labor Monitoring” in Corporate Responsibility and Ethical Trade: Codes of Conduct in the Global Economy. Available at http://nature.berkeley.edu/orourke/PDF/pwc.pdf

Debora L. Spar and Lane T. La Mure, The Power of Activism: Assessing the Impact of NGOs on Global Business. In California Management Review, Vol. 45, No 3, Spring 2003

Optional

Lynn Paine, “Up to the Code?” Harvard Business Review, No 12, 2005.

Case: Wal-Mart: Nonmarket Pressure and Reputational Risk (A) P-52A 5/15/06

Case: Wal-Mart: Nonmarket Pressure and Reputational Risk (B) P-52A 5/15/06

Session 6: CSR and board of directors – October 8

Paul Hawken, Socially Responsible Investing. October 2004. This report connects to the database:

http://www.responsibleinvesting.org/database/WEB-INF/php/reportMain.php

Leonhard and Rangan, “Corporate social responsibility strategy and boards of directors (boardroom briefing)”. The article can be downloaded at: http://www.exed.hbs.edu/assets/board-responsibility.pdf

Isabelle Maignan and David A. Ralston (2002). “Corporate Social Responsibility in Europe and the U.S.: Insights from Businesses' Self-Presentations”. In Journalof International Business Studies, Vol. 33.

Strandberg, “The role of the board of directors in corporate social responsibility” (report), June 2008. The report can be downloaded at: http://www.corostrandberg.com/publications_Corporate_Sustainability_Governance.html

Paul Hawken, Socially Responsible Investing. October 2004. This report connects to the database:

http://www.responsibleinvesting.org/database/WEB-INF/php/reportMain.php

Case: Methanex: developing an integrated strategy (707-040-1).

The crystal ball: New CSR issues and challenges?

GMO controversy:

GMO Myth and Global Scandal: Exposing government lies about GM foods, Exposing government lies about GM foods
“Seeds of Deception: Exposing industry and government lies about the safety of the genetically engineered foods you're eating”, review written by Phil Shannon. The article can be found at: http://www.laleva.org/eng/2004/06/gmo_myth_and_global_scandal_exposing_government_lies_about_gm_foods.html

• Paulette Kurzer and Alice Cooper (2007), “Consumer activism, EU institutions and global markets: the struggle over biotech foods”. In Journal of Public Policy, 27, pp 103-128. You can download this article from the CBS library.

Case: Global Corporate Social responsibility vs. Local Legal Compliance: A Case of Internet Censorship in China: 706-061-1