Friedman’s View

What are a corporation’s

“social responsibilities?”
Milton Friedman’s well-known
response is: “a corporation’s
responsibility is to make as
much money for the
stockholders as possible.”
Carroll’s Pyramid
 Carroll’s Pyramid
1. Economy
a. This is the responsibility of business to be
profitable
b. Only way to survive and benefit society in
long-term

2. Legal
a. This is the responsibility to obey laws and
other regulations
b. E.g. Employment, Competition, Health &
Safety
 Carroll’s Pyramid
3. Ethical
a. This is the responsibility to act morally and ethically
b. With this responsibility, businesses should go
beyond narrow requirements of the law
c. E.g. Treatment of suppliers & employees

4. Philanthropic
a. This is the responsibility to give back to society
b. The responsibility is discretionary, but still important
c. E.g. charitable donations, staff time on projects
 Concepts of CSR

Stakeholder Theory (Freeman, 1984) – A stakeholder

is “any group or individual who can affect or is affected
by the achievement of an organisation’s purpose.”
Argues that it is in the company’s strategic interest to
respect the interests of all its stakeholders.

Social Contract (Donaldson, 1982; Donaldson and

Dunfee, 1999) – There is a tacit social contract
between the firm and society; the contract bestows
certain rights in exchange for certain responsibilities.
 Corporate Social Responsibility
Definition Definition

What is Corporate Social Responsibility?

CSR! Is that really

for me? So
technical, very
expensive!!
I’m overwhelmed
 Corporate Social Responsibility
Definition Definition

What is Corporate Social Responsibility?

‘Corporate Social Responsibility is 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
 Corporate Social Responsibility
Definition Definition

What is Corporate Social Responsibility?

Corporate Social Responsibility

The responsibility of business towards the society

 Alasan Dilaksanakannya CSR

1. Kesadaran yang meningkat dan masyarakat yang makin

kritis terhadap dampak negatif dari tindakan perusahaan
yang merusak serta merugikan masyarakat sekitarnya.
2. Sumber daya alam yang makin terbatas.
3. Menciptakan lingkungan sosial yang lebih baik.
4. Perimbangan yang lebih adil dalam memikul tanggung
jawab dan kekuasaan dalam memikul beban sosial dan
lingkungan antara pemerintah, perusahaan, dan
masyarakat.
5. Bisnis sebenarnya mempunyai sumber daya yang
berguna.
6. Menciptakan keuntungan jangka panjang (Keraf, 1998 :
14).
Benefits of CSR Corporate Social Responsibility
Legislative Framework

Winning new
businesses
Increase in Enhanced
Relationship with
customer retention
stakeholders

Saving money Attracting,

on energy and
operating cost
Benefits Retaining and
Maintaining a happy

of CSR workforce

Differentiating
yourself from the
Media interest
competitor
and good
reputation
Enhancing your
influence in the Access to funding
industry opportunities
 Corporate Social Responsibility
CSR as a Corporate Culture

Synchronisation
CSR as a group
Culture as a norm of CSR with company
concept
business strategy
 Indicator CSR

1. ISO 26000
2. Global Reporting Initiative (GRI)
Ethical Arguments
 Question of Purpose

• In evaluative arguments our evaluation of

an item stems from the purpose of that
item,
• Nike is a good shoe because it effectively
covers your feet…
 But in Ethical Arguments…
• The purpose differs...
• If we discover that third-world labor markets
are economically and physically exploited in
making Nike shoes…
• Is it right to make (or even to own) Nike
products?
• The purpose is now one of political and
human rights, not covering one’s feet.
 Requirements for Ethical
Arguments:
• Just like evaluations require
comparison/contrast between items within
the same category/genus, so to do different
ethical systems
• AND...
• Ethical Arguments must be couched in ethical
terms….
• Right vs. Wrong; Moral vs. Immoral
• C: Slavery is wrong
Toulmin Schema:
• R: b/c it violates human rights
• G: Slavery violates human rights; Ev: Support
that slavery violates HR
• W: Any practice that violates human rights is
wrong
• B: Support of ethical system
 Different Ethical Systems…
• Of all value arguments, Ethical arguments are
the least stable in Backing
• Because we have different ways of
determining right from wrong
 Naïve Egoism
• Right vs. Wrong determined by how it affects
a given individual or particular group of
individuals
• It is wrong to hit Michelle because she is a
woman
• Operates under the belief that I am #1
• But how many #1s can there be?
 Consequentialism
• Right vs. Wrong determined by the outcome
of an action and whether it has positive or
negative consequences
• It is wrong to hit Michelle b/c it willhurt
• Operates under a utilitarian framework where
we seek to provide the greatest good for the
greatest number
• OR the ends justify the means
 Principlism
• Right vs. Wrong determined not by outcome
of action, but by the action itself, whether it
conforms to or upholds a belief or principle
• It is wrong to hit Michelle b/c it violates the
Golden Rule
Statement I
Corporate Social Responsibility (CSR) tidaklah perlu
dilakukan oleh perusahaan, karena perusahaan juga telah
dibebani oleh pembayaran Pajak. Dengan pemahaman
bahwa pajak yang dibayarkan oleh perusahaan juga
nantinya dikembalikan ke masyarakat atau akan digunakan
untuk kesejahteraan masyarakat, sama dengan tujuan dari
pelaksanaan CSR.

Statement II
Corporate Social Responsibility (CSR) bukanlah suatu
kegiatan yang wajib dilakukan oleh perusahaan, melainkan
suatu bentuk kegiatan yang bersifat sukarela oleh masing-
masing perusahaan.