The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu


Friday, January 30, 2015

Strategic CSR - Tipping

The article in the url below outlines what sounds like a great idea:
 
"Imagine there's no tipping. By getting rid of gratuities, a few restaurants believe they'll make life easier for customers, while providing a more stable income to servers."
 
The restaurant featured in the article is doing this to put its customers at ease. In return the new French-style restaurant in Philadelphia:
 
"… intends to offer its staff up to $13 an hour in salary, plus health benefits, but with no tips."
 
The result is that servers get more stable incomes, while customers at other restaurants that have tried this say service improves:
 
"Menu prices might read a bit higher, but diners will know what they'll end up paying at meal's end — probably no more than they would have at an equivalent place where they'd tip."
 
Now the market will tell us whether customers think this is a good idea in Philadelphia, or whether they prefer to pay lower prices and control to what extent they reward/value the service they receive.
 
Have a good weekend
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Customers Can Keep The Tip—Which Might Please Restaurant Workers
By Alan Greenblatt
October 9, 2014
National Public Radio
 

Wednesday, January 28, 2015

Strategic CSR - Cats and dogs

The expansion of legal rights in our courts continues—from corporations (see: Strategic CSR – March 4, 2011; Strategic CSR – January 27, 2010; and Strategic CSR – October 26, 2009), to the environment (see: Strategic CSR, August 26, 2009), and now to cats and dogs:
 
"Americans have long seen dogs and cats as family members, but the law hasn't always agreed. Until the early 1900s, both animals were deemed so legally worthless that they didn't even qualify as property—and could be stolen or killed without repercussion. But as Americans began to spend millions, then billions, on food, toys and veterinary care for their pets, the law changed. Today, cats and dogs aren't just property; they are the most legally protected animals in the country."
 
Some examples of how the law now accommodates these family pets:
 
"Felony anticruelty laws in all 50 states impose up to $125,000 in fines and 10 years in prison for anyone who abuses animals. The federal Pets Evacuation and Transportation Standards Act, passed after Hurricane Katrina, requires rescue agencies to save pets as well as people during natural disasters. Judges have been increasingly willing to treat cats and dogs like people in the courtroom, allowing custody disputes over pets and granting large awards … including so-called noneconomic damages typically reserved for the death of a spouse or a child. In a few recent court cases, judges even gave dogs their own lawyers."
 
The rising amounts courts are willing to award owners against workers (dog walkers, home cleaning services, pet groomers, etc.) for any negligence that causes the loss of these animals has been steadily rising. In particular, vets are increasingly being exposed to the same malpractice lawsuits that many medical doctors face today:
 
"In 2004, a Los Angeles man won a $39,000 veterinary malpractice verdict for the death of his Labrador mix. The American Veterinary Medical Association warned that 'personhood' for pets could flood the courts, drive vets out of business and ultimately harm dogs and cats by making veterinary services prohibitively expensive."
 
Ironically, although a possible threat today, the article notes that vets were originally the cause of the rising legal status of cats and dogs:
 
"In the 19th century, [vets] would have shared the law's view that pets were worthless animals. Their work focused almost exclusively on economically valuable creatures such as horses and cows. But as these animals began to disappear from U.S. cities in the early 20th century, veterinarians often found themselves out of work. They turned to cats and dogs for the survival of their profession."
 
Where does all this lead? In addition to growing concern among vets:
 
"Firms involved in agriculture and biomedical research fear that personhood for pets could spill over to livestock and lab rats, stymying cures for human diseases and shutting down meat production."
 
A related story about an Argentinian court freeing an orangutan who was recognized as a "non-human person" that had been "unlawfully deprived of its freedom" by being held in captivity at Buenos Aires Zoo, is detailed in this Reuters article:
 
"In a landmark ruling that could pave the way for more lawsuits, the Association of Officials and Lawyers for Animal Rights (AFADA) argued the ape had sufficient cognitive functions and should not be treated as an object."
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Should pets be people too?
By David Grimm
April 12-13, 2014
The Wall Street Journal
Late Edition – Final
C3
 

Monday, January 26, 2015

Strategic CSR - Hippocratic Oath

Building on the idea of an oath for graduating MBA students (http://mbaoath.org/) and a general oath for executives (see: Strategic CSR – Executive oath), the article in the url below proposes a Hippocratic oath for the financial sector. The stated need for such an oath is that:
 
"… despite five years of reform the public retains its distrust for bankers and the services provided fail to meet the diverse financial needs of society."
 
The reason, it is argued, is that the focus of reform was misplaced—falling more heavily on the symptoms of the problem, rather than the cause:
 
"A focus on financial stability alone fails to address the root cause of the crisis, which we believe lies in the inherent lack of virtue among our banking institutions and subsequent ethos. This led to a self-serving culture that influenced the behaviour of bankers."
 
It therefore follows, the authors argue, that a more effective response targets the underlying culture of the finance/investor industry. Rather than trying to impose a "rigid moral regime" to all, however, the authors instead apply what they refer to as the "theory of virtue":
 
"Applying this theory to banking reform means that our banks should, to the best of their abilities, attempt to meet people's diverse financial needs, and should not simply focus on self-enrichment or basic transactional services."
 
In essence, an ethical responsibility that is larger than the individual – a professional responsibility. More specifically:
 
"One way this can be achieved is by requiring all members of the banking profession to affirm a Hippocratic-style oath, where employees publicly voice their commitment to behave in a manner that prioritises customers and recognises that the abuse of their position can have dramatic consequences for society."
 
It is argued that such an oath would reform the culture of the profession, as a whole, as a result of focusing more on the social value banking adds, rather than a personal route to financial success. It would also reposition the image of bankers in the eyes of the wider public:
 
"Lawyers, doctors and architects all hold a professional motive to not only do the best for their client but also adhere to the well established principles of that profession. In medicine, the Hippocratic oath provides a centre-piece for personal responsibility in the profession and their overarching principles. Banking is no different and in the post-crash era, should strive towards professionalism."
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Bankers should take a Hippocratic oath to restore virtue to the financial sector
By David Fagleman
July 28, 2014
The Guardian
 

Friday, January 23, 2015

Strategic CSR - Free flow of information

The article in the url below offers an interesting meditation on the loss of control by companies of the debate over their products online (what we discuss in Strategic CSR as "the free flow of information," Chapter 4, Figure 4.5, p161):
 
"The digital revolution has dramatically shifted the balance of power from companies to their critics. Although big firms deploy armies of PR flacks, anyone with a smartphone and a social media account now has the same power to reach a global audience. Whistleblowers once had to photocopy documents and smuggle them out in their underpants. Now they can be shared with the world in a trice, by e-mail or instant messaging."
 
What caught my eye, however, was a statistic demonstrating the devastating operational effects this phenomenon can have for firms today:
 
"In the two weeks after the 1989 Exxon Valdez oil spill in Prince William Sound, in Alaska, Exxon's shares dropped 3.9% but quickly rebounded. In the two months after the Gulf of Mexico spill in 2010 BP's shares fell by half (and have still to recover fully)."
 
Social media increasingly allows small, motivated activists to control the message, spreading bad news ever faster and to greater effect. Whether this shift in power is resulting in better social outcomes is unclear to me at the moment. Either way, companies had better adapt.
 
Have a good weekend.
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Beware the angry birds
By Schumpeter
October 11, 2014
The Economist
76
 

Wednesday, January 21, 2015

Strategic CSR - Welcome back!

 
 
Welcome back to the Strategic CSR Newsletter!
The first CSR Newsletter of the Spring semester is below.
As always, your comments and ideas are welcome.
 
 
I hope you all had a good winter break.
 
As I mentioned in the autumn, I have been doing a lot of thinking recently about the core principles that underpin the concept of strategic CSR. The main stimulus for this thinking is a new book that I was invited to write for the UN PRME initiative collection (http://www.unprme.org/). The book has just been published by Business Expert Press (http://www.businessexpertpress.com/books/corporate-social-responsibility-strategic-perspective):
 
 
 
 
The title for the book is Corporate Social Responsibility: A Strategic Perspective. The book details a series of ten principles that I believe provide an intellectual foundation for strategic CSR that better fits with what we know about economic theory and human behavior. As a preview, here are the ten principles that I am arguing define strategic CSR:
  1. Business equals social progress.
  2. Shareholders do not own the firm.
  3. Identifying stakeholders is easy; prioritizing among stakeholder interests is difficult.
  4. CSR is not solely a corporate responsibility.
  5. Market-based solutions are optimal.
  6. Profit = economic value + social value.
  7. The free market is an illusion.
  8. Scale matters; only business can save the planet.
  9. Strategic CSR is not an option; it is business.
  10. Milton Friedman was right, the social responsibility of business is business.
 
In particular, I am attempting to redefine CSR as "sustainable value creation." By defining CSR in this way, I believe it moves from being something that is peripheral to strategy and operations (and, as such, something the CEO/executive team can ignore, if they so choose), to being central to the value creating function of the business (something that cannot be ignored). As a result, I think this framework has radical consequences for both business practice and business education.
 
If you have any questions about the book, please let me know.
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/