IA5: Corporate Social Responsibilty Lecture
As a policy studies major and someone who hopes to be an
Environmental Lawyer, Corporate Social Responsibility is very important to me.
One of my favorite guest presentations was by Dr. Tom Macagno, a professor and
an academic advisor here at Chatham’s Falk School of Sustainability who
specializes in sustainability and corporate social responsibility. Dr. Macagno obtained
his BA of International Relations at the University of Southern California and
his MBA from Erasmus University’s Rotterdam School of Management. After working
for many years, Dr. Macagno went back to school, obtaining his PhD in
Sustainable Business from University of East Anglia. Dr. Macagno has a long list of other accomplishments
and employers; he worked at GE, Golf Web, CBS Sports, Clipshot, E*Trade which
are all companies that use advanced software. Before becoming employed
at Chatham, Dr. Macagno served as the Head of Sustainability for an engineering
firm in Norwich, United Kingdom called May Gurney, where he applied his past experience in
software usage but also explored the principles Sustainable Business. At May Gurney, Dr. Macagno had many
major accomplishments including, but not limited to, saving the equivalent of 2.5 million dollars by reducing the company’s
CO2 emissions by 18 percent, and site waste by 21 percent. In addition, Dr.
Macagno worked at GE, Golf Web, CBS Sports, Clipshot, E*Trade which are all companies
that use advanced software. For more information on Dr. Macagno, visit http://blogs.chatham.edu/macagno/ or
his LinkedIn page, https://www.linkedin.com/in/tmacagno/.
Dr. Macagno’s lecture was primarily
focused on the importance of practicing Sustainable business, or as it is
discussed in our textbook, Corporate Social Responsibility. Corporate Social
Responsibility is defined by Karen Collins as the “approach that an organization takes in
balancing its responsibilities toward different stakeholders when making legal,
economic, ethical, and social decisions” (Collins, 2017). Dr. Macagno talked about his experience
at May Gurney, where he decreased his company’s overall waste and also explained
that CSR is very important because the customer and the company’s investors
should hold the company responsible for its wrongful actions (Macagno, 2018).
If a company can get away with anything, they will abuse that privilege by
becoming more and more powerful, therefore monopolizing the market. Dr. Macagno
also identified that there are four key reasons for why CSR is important in the
business sector, including abiding by ethics to do the right thing for the
largest amount of people, morals, or just simply doing what is right for the
better of society, rationalism, which is the action of partaking in CSR because
it maximizes utility, and economics, or following CSR guidelines because it
benefits stakeholders in the company’s assets (Macagno, 2018). Sustainability,
or “the principle of providing products today that don’t compromise the ability
of future generations to meet their needs” goes hand-in-hand with corporate
social responsibility (Collins, 2017). Dr. Macagno explained that there are two
types of Corporate Social Responsibility that enforce sustainability
principles; product level CSR and Individual CSR (Macagno, 2018). Product Level
CSR is when companies sustainably create products, which is usually reflected
by government regulated “stamps of approval” like Fairtrade and Rainforest
Alliance certified (Macagno, 2018). Individual Level CSR is based off of a firm’s
corporate decision-making process, including dilemmas, or the decision between
a right and right decision, an ethical decision, or choosing between the right
and wrong choice, and ethical lapse, which is choosing to make an unethical
decision (Macagno). Dr. Macagno stressed that though firms may be putting themselves
in a financially risky decision by focusing on Corporate Social Responsibility,
and that many times they make the unethical or irrational decision to not
practice sustainability, that in the long run CSR is about value creation or
looking at the world in a more compassionate and empathetic view.
Corporate social responsibility and
sustainability are two hotly debated topics in the business sector, and in
global news. Tesla, for example, has been in the news recently because of their
groundbreaking production of all-electric luxury cars. “Elon Musk, CEO of Tesla Inc. (TSLA) has bridged the gap between
the corporate world and his socially responsible vision by
offering electric-powered cars and environmentally friendly
automotive products” (Murphy, 2018). Tesla’s target market, or the “specific
group of customers who should be interested in your product, have access to it,
and have the means to buy it” has become increasingly larger and more diverse
because of the troubling rise in the earth’s temperature (Collins, 2017). Climate
change has caused more people who are more sustainably or environmentally
concerned to purchase products that could subsequently decrease overall
environmental damage, and Tesla has capitalized on this by creating a unique
product and selling it at high prices. Tesla’s market uses Corporate Social Responsibility
to make a high profit while also benefitting consumers. Hopefully, more
companies will follow Tesla’s lead on capitalizing on global trend that focuses
on purchasing sustainable products, as this could decrease CO2 emissions and subsequent
global warming.
An article by Investopedia
effectively analyzes the benefits of Corporate Social Responsibility in the
business sector and addresses similar topics to what Dr. Macagno spoke about in
his lecture. The article also relates closely to the example of Tesla’s CSR-aware
image; “By projecting a
positive image, a company can make a name for itself for not only being
financially profitable, but socially conscious as well” (Murphy, 2018). This
example also pertains to Dr. Macagno’s testimony that being socially responsible
may have risks, but if a firm’s name becomes universally recognizable for being
sustainable, they will become more financially profitable in the long run. Financial
benefits are not the only ones that come along with a firm being socially responsible;
“When social responsibility is recognized as part of a company's business
model, it can attract positive publicity, help attract and retain top talent,
and improve relationships with customers and their communities. The
benefits can be far and wide, including client retention, improved
sales, and financial success” (Murphy, 2018). Overall, Dr. Macagno left us with
an important take away; if a firm is an advocate of Corporate Social Responsibility,
they are an advocate both for others, and themselves.
References
Collins,
Karen (2017). Exploring Business. Boston, MA:
FlatWorld
Macagno, T.
(2018, September). Guest 2- CSR Presentation. Retrieved December 12, 2018, from
Murphy, C. B.
(2018, June 18). Why is social responsibility important to a business?
Retrieved
December 12, 2018, from https://www.investopedia.com/ask/answers/041015/why-
social-responsibility-important-business.asp
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