Corporate Social Responsibility (CSR) (AQA A Level Business): Flashcards
Exam code: 7132
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Define corporate social responsibility (CSR).
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Define corporate social responsibility (CSR).
Corporate social responsibility (CSR) is the concept that businesses have a responsibility to consider and positively impact society beyond their economic interests.
True or False?
CSR involves doing only what the law requires.
False.
CSR goes beyond legal compliance. Businesses voluntarily integrate social and environmental concerns into their operations and dealings with stakeholders.
How can CSR help a business reduce legal risk?
Businesses that act responsibly are less likely to break rules designed to encourage good practice, which reduces the risk of future legal problems.
CSR can improve staff motivation, recruitment and _______, as employees increasingly want to work for a business with a genuine social conscience.
CSR can improve staff motivation, recruitment and retention, as employees increasingly want to work for a business with a genuine social conscience.
How can CSR improve relationships with local communities?
CSR can reduce conflict and build local support for a business's operations.
How can CSR create competitive advantage?
CSR differentiates a business from rivals that take a narrower, purely profit-focused approach.
Define public relations (PR).
Public relations (PR) is the management of a business's communication and reputation with the public, media and other stakeholders, focused on shaping how it is perceived.
True or False?
Good PR is proof that a business has genuine CSR.
False.
PR without real CSR substance behind it risks misleading stakeholders. Genuine CSR can support good PR, but the two are not the same.
Why is greenwashing described as a form of PR?
Greenwashing presents a business as more environmentally friendly without matching real action, which can mislead customers and investors.
Define bluewashing.
Bluewashing means a business associating itself with human rights and ethics to appear socially responsible without genuinely changing its practices.
True or False?
If a business's ethical claims are exposed as superficial, the damage to trust can be worse than if it had never made the claims.
True.
Superficial claims that are exposed can damage trust more severely than if the business had never made the claim at all.
According to the shareholder approach, what is a business's main responsibility?
The shareholder approach says a business's main responsibility is to maximise returns for its shareholders, within the law.
Which economist is most associated with the shareholder approach?
The shareholder approach is most associated with the economist Milton Friedman.
Why did Friedman argue that a focus on profit benefits society?
He argued that focusing on profit drives the efficient use of resources, wealth creation and employment.
True or False?
Under the shareholder approach, social and ethical issues are always ignored.
False.
Social and ethical issues are addressed only where they support the goal of maximising shareholder returns.
What does the stakeholder approach say about a business's responsibilities?
The stakeholder approach says a business has responsibilities to all groups affected by its activities, such as employees, customers, suppliers, the community and the environment, not just shareholders.
What is a drawback of the stakeholder approach?
Decision-making can become more complex and sometimes conflicting, because different stakeholder groups often have competing priorities.
Many modern businesses adopt elements of both approaches, recognising that shareholder returns and stakeholder wellbeing are _______ over the long term.
Many modern businesses adopt elements of both approaches, recognising that shareholder returns and stakeholder wellbeing are connected over the long term.
True or False?
In Carroll's CSR Pyramid, economic responsibility forms the base.
True.
Economic responsibility (being profitable) forms the base, because a business must be financially viable to survive and support all its other responsibilities.
What does legal responsibility require in Carroll's CSR Pyramid?
Legal responsibility means obeying the laws and regulations set by governments, such as employment, consumer protection, health and safety, and environmental laws.
What does ethical responsibility involve in Carroll's CSR Pyramid?
Ethical responsibility means doing what is right, just and fair, even when it is not required by law.
At the top of Carroll's pyramid, ___________ responsibility means being a good corporate citizen by giving back to society.
At the top of Carroll's pyramid, philanthropic responsibility means being a good corporate citizen by giving back to society.
How can Carroll's CSR Pyramid help managers?
It gives managers a clear structure for thinking about business duties, from making profits to helping society.
Why might Carroll's CSR Pyramid be criticised?
Real business actions often overlap the levels, but the pyramid separates them too neatly. It may also carry a cultural bias, as it was developed in the US.
Define ESG reporting.
Environmental, social and governance (ESG) reporting is the process by which a business discloses information about its environmental impact, social practices and governance structures, alongside its usual financial reporting.
What does the governance element of ESG cover?
Governance covers how a business is run, including executive pay and how decisions are made and monitored.
The social element of ESG covers how a business treats ____, including employees, customers, suppliers and communities.
The social element of ESG covers how a business treats people, including employees, customers, suppliers and communities.
How does ESG reporting help stakeholders identify risks?
It reveals risks that might not appear in traditional financial statements, such as environmental liabilities or poor governance practices.
True or False?
ESG reporting is a niche activity that regulators show little interest in.
False.
ESG reporting is increasingly required or expected by regulators and stock exchanges, so it is becoming a standard part of how larger businesses operate.
How does improving ESG performance reduce the risk of fines?
ESG standards are often ahead of future laws, so acting early helps a business avoid being caught out later.
How can ESG performance affect a business's borrowing costs?
Many banks and investors prefer or require good ESG performance, so it can improve access to finance and lower borrowing costs.
Why is a lack of standardised measures a difficulty for ESG?
There is no single agreed way to measure ESG performance, so it can be hard to know whether a business's figures are accurate or fair to compare with others.
True or False?
Improving ESG performance can conflict with shareholders who want profits straight away.
True.
ESG improvements often cost money now. This conflicts with many shareholders who want profits straight away.
If a business's ESG claims turn out to be exaggerated, it risks accusations of greenwashing or _________.
If a business's ESG claims turn out to be exaggerated, it risks accusations of greenwashing or bluewashing.
Which measures can a business use to track its environmental impact?
It can track emissions, such as total greenhouse gas emissions or carbon intensity per unit of output, and resource usage, such as water, energy or raw material consumption.
Which measures can a business use to track its social performance?
It can track health and safety, such as the number of workplace accidents, and community investment and philanthropy, such as charitable donations or staff volunteering hours.
How can a business measure the quality of its governance?
It can measure the composition of its directors, such as board diversity in terms of gender, ethnicity and background.
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