Corporate Social Responsibility CSR is a management concept that many companies adopt to integrate social and environmental concerns in their business operations and interactions with their stakeholders.
Corporate Social Responsibility Many companies practice a multifaceted version of CSR that ranges from pure philanthropy to environmental sustainability to the active pursuit of shared value (creating economic value in ways that also create value for society). Their activities include: Focusing on philanthropy and giving back to non-
profits and community organizations Reducing resource use, waste, or emissions to
lower costs and improve operational effectiveness Developing or redesigning new products and
services that benefit the society. Transforming existing or creating new business
processes and models using CSR principles
CSR Examples Reducing the supply chain impact on carbon footprint Reducing resource consumption in factory and office Conducting business (e.g. meeting, travel) in an environmentally
responsible manner Eco-designing products that use recycled or repurposed materials
and can be decomposed or disassembled in the end of the useful product life
Establishing an ethics charter against corruption and having a good governance system
Developing an ethical supply chain to fight against child labor or unfair wages in every supply chain partner
Integrating inclusion and diversity in HR Establishing prevention/health and well-being programs at work in
the company Raising consumer awareness about responsible consumption Allowing/encouraging employees to share their knowledge, skills,
and time for non-profit and community organizations Supporting and participating in humanitarian programs
Social Enterprises Social enterprises are organizations that address a basic unmet need or solve a social or environmental problem through a market-driven approach. More companies are paying attention to social inequality
and create/join programs that advocate for social justice. Many entrepreneurs build companies to promote social
justice.
Social Enterprises
• A new breed of companies were created with social justice in mind.
• Many existing companies have joined forces to fight inequality in society.
Certified B Corporations
Certified B Corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.
Warby Parker
A Social Entrepreneur saw opportunities to cut the middleman in prescription eyeglasses then passed the benefits to those in need.
Warby Parker’s New Supply Chain
Poverty Tax
Poverty Tax or Ghetto Tax: poor people pay higher prices per unit because they buy small packages in neighborhoods that lack competition. They also pay more for financial services, appliances, and groceries.
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Algramo’s Streamlined Supply Chain
TOMS Shoes
Toms’ business model is known as the “one for one concept” model, which is referring to the company’s promise to deliver a pair of free shoes to a child in need for every sale of their retail product.
Starbucks Buys Fairtrade Coffee
Starbucks is committed to buying 100% ethically sourced coffee. They share research and resources through their Farmer Support Centers located in coffee- producing countries around the world to improve productivity and sustainability.
IKEA Builds Better Shelter
Spotify
Neil Young urges Spotify workers to quit their jobs before the company ‘eats up your soul,’ and says CEO Daniel Ek ‘is your big problem — not Joe Rogan.’
Discussion Questions
Please research the following questions and provide evidence to support your answers. Everyone: Explain the poverty tax. Do we have it in the U.S.? How can we get rid of it with the lessons we learned in OM? Everyone: What are the operational challenges for companies like Warby Parker and Toms Shoes in their charity efforts? How would you identify the needs then deliver products to meet these needs? Everyone: Do you have an idea of doing good while doing well? How can you make it feasible?
Group Discussion Be sure your group is ready to lead and/or discuss the following question in class, with research or facts-based evidence. There are many admirable companies actively engaged in CSR. Find one good example and analyze their efforts from an OM perspective. Discuss how their work can be replicated by other businesses. Be sure to cover as many areas as we have discussed in the course.