Exam 2013, questions and answers PDF

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MGT357

MANAGEMENT SCHOOL

Autumn Semester 2013-2014

CORPORATE SOCIAL RESPONSIBILITY

2 Hours

You are required to answer TWO questions. All questions carry equal marks

1.

Milton Friedman contends that ‘there is one and only one responsibility of Business – to use its resources and engage in activities designed to increase its profits...' Examine this perspective drawing upon the debates around the challenges of modern capitalism for more responsible business practice and the ways in which businesses have sought to respond to this issue.

2.

While contemporary business has adapted to an increasingly globalised environment, the democratic structures and regulatory frameworks through which to contain business activity have not. As a consequence, governments and civil society have virtually no power to enforce ethical and responsible values upon businesses. Discuss.

3.

Evaluate the claim that as we have no universal definition of CSR, the term effectively becomes meaningless as organisations can pick and choose which aspects they apply to their existing business activities.

4.

Utilising examples from at least two companies that you have researched, examine the methods that contemporary organisations have utilised to engage their stakeholders and demonstrate a commitment to responsible business practice.

MGT357

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5.

Critically examine the key features of the business case for CSR. To what extent are Corucz, Colbert and Wheeler (2008) correct in their critical assertion that ‘a firm that dedicates resources to fulfilling what are perceived to be its social responsibilities will financially perform either better, worse, or the same as it might have done otherwise, depending on which studies we line up and consult’ (Corucz, Colbert and Wheeler 2008; 84).

6.

‘The insititutional forces propelling business, the corporate form and the ideological matrix of economic rationality forward, immediately transposes most gestures of responsibility –including sustainability and stakeholder dialogue – into something of a farce’ (Fleming and Jones 2013; 2). Evaluate this critique of CSR. Why do authors such as Fleming and Jones view CSR as inherently incapable of achieving significant change?

END OF QUESTION PAPER

MGT357 2

MGT357 exam marking Students are required to answer 2 questions in 2 hours. The questions are designed to allow the students to pull material from across the whole of the module. When marking it is important to remember that they have relatively little previous teaching on CSR related material in the first two years so this is quite a new area for them. During revision sessions students were told that key issues for them to focus on in terms of framing answers to get good marks included: 1) Well structured answers that set out what they understood by the question and then constructed an answer based around key points and concepts supported with theoretical and case study evidence/examples and answered the question based upon the material they presented. 2) Ability to demonstrate a strong understanding of core theoretical concepts and theorists (detailed referencing not necessarily that important). 3) Use of good examples from businesses and NGOs to show differing positions and debates. 4) Focus upon an analytical approach to the material and avoid being overly descriptive. While key concepts and issues need to be described the most important aspect is to critically assess, examine and reflect on the concepts rather than to just be able to describe and outline the central features. 5) I have really emphasised the importance of the conclusions in their answers and explained that first class students need to look beyond basic factual description and discussion to actually thinking about the broader implications of the issues and material they discuss. We discussed this regularly throughout the course so we should look for this in the students answers. 6) I have encouraged the students to try and actually give an informed opinion/perspective in answering the question rather than sitting on the fence, but not based around a random ‘I believe…’ statement. They should give an answer that reflects the evidence and arguments that they have put forward in their answer. If they succeed in doing this you should mark this aspect positively. This year they have done additional work during the semester with Peerwise so hopefully there should be evidence of broader reading and they will have had a chance to test their understanding and knowledge before tackling the exam. For each question that you mark can you put a couple of brief lines of comment at the end of the answer to provide a brief explanation of your mark. This is helpful in case someone questions the mark and for when the students have the ‘view your exam papers’ session this term. Below are the 6 questions on this years exam paper with a brief summary of the key issues/ themes that we are looking for for each question.

1.Milton Friedman contends that ‘there is one and only one responsibility of Business – to use its resources and engage in activities designed to increase

its profits...' Examine this perspective drawing upon the debates around the challenges of modern capitalism for more responsible business practice and the ways in which businesses have sought to respond to this issue. This is a relative catch-all question designed to allow students to bring in material from across the module. Students need to demonstrate an understanding of Friedman’s position and its role as a critique of CSR practices. They should link this to concepts of shareholder theory vs stakeholder theory, arguments around CSR going against core fiduciary duty etc. Students can also demonstrate how CSR could be seen to actually be the best way to ensure that a company increases its profits and the theoretical arguments that suggest that only companies who engage in ethical practice will survive in the long term. They could look at the role of ethical consumers in driving business practice and the emerging ‘business case’ for CSR and its relative merits. Strong students will identify broader theoretical links surrounding exactly what the role of business in society should be and whether businesses should be engaged in societal issues beyond conventional ‘business’ boundaries. 2. While contemporary business has adapted to an increasingly globalised environment, the democratic structures and regulatory frameworks through which to contain business activity have not. As a consequence, governments and civil society have virtually no power to enforce ethical and responsible values upon businesses. Discuss. The central focus within this answer should be the changing relationships between business, the state and civil society. Students should be looking to theoretical debates connecting the rise of globalisation to a changing balance of power between businesses and governments, highlighting examples for these power shifts. Should look at notions of a ‘hollowing out’ of the nation state and the increasing role of multinationals. Students should also connect these events to the challenges of sustainability and the threat that global industry is placing on the environment. Within these debates, students should consider whether or not there needs to be tighter regulation of international business and whether frameworks exist to enable this. Can bring in the debate between regulation and voluntarism within CSR. Strong students will also look at the ability of civil society groups to function as ‘watchdogs’ on business activity and the power of consumers to change business practice. They should also seek to question whether the power of multinationals has been overemphasised. 3. Evaluate the claim that as we have no universal definition of CSR, the term effectively becomes meaningless as organisations can pick and choose which aspects they apply to their existing business activities. Students should focus upon highlighting, explaining and evaluating the different conceptualisations that surround CSR, i.e. defintions of CSR, Corporate Citizenship, Corporate Accountability, Sustainable Business etc. They need to highlight the differences across the concepts and the key theorists accompanying these ideas. They also need to explain why the issue of definition is important and compare those who argue that an open definition allows companies to apply the concept to different

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contexts across industries and in different locations and those who argue that without a tight definition it is impossible to set clear targets for business and to hold them to account. They should examine the claims that companies currently ‘cherry pick’ aspects of CSR that fit them and that this can result in nothing more than a ‘business as usual’ approach. Thet need to identify key theorists and also to utilise case studies to support their arguments. Strong students will also consider the critical management arguments that CSR is actually completely misleading as it suggests that solutions can be found within the existing capitalist framework and that a more radical repositioning of business is required. 4. Utilising examples from at least two companies that you have researched, examine the methods that contemporary organisations have utilised to engage their stakeholders and demonstrate a commitment to responsible business practice. For this question the primary focus for the students is to demonstrate knowledge of case study company activities which they can apply to this question. Issues that will form the centre of the discussion could include reporting processes as an attempt to increase transparency with stakeholders, the application of codes of conduct and key frameworks such as the UN Global Compact and GRI. The role of direct engagement in stakeholder dialogue and the impact that this can have on company practice. Students should examine these issues and concepts and then apply the practical activities of their case study companies to such themes and issues. They should not simply describe the CSR activities of their chosen case studies. Strong students will also not simply utilise material garnered from their chosen company but will look to present critiques of those companies from alternative sources. As well as discussing these processes, strong students should be able to present an evaluation of whether they think the actions are evidence of a real attempt to engage stakeholders or whether they represent more of a PR exercise which still ignores many of the key impacts of the companies activities. 5. Critically examine the key features of the business case for CSR. To what extent are Corucz, Colbert and Wheeler (2008) correct in their critical assertion that ‘a firm that dedicates resources to fulfilling what are perceived to be its social responsibilities will financially perform either better, worse, or the same as it might have done otherwise, depending on which studies we line up and consult’ (Corucz, Colbert and Wheeler 2008; 84). You will probably find that most students will cover this question as it is always one of the most popular areas for revision as it is relatively straightforward. Students need to outline the key aspects of the business case for CSR, showing examples to support the different concepts. Having outlined the key features, students then need to examine the differing studies that have been conducted to try and evaluate whether or not there is a direct correlation between ethical practice and financial performance. Strong students will question whether it is actually possible to provide quantitative evidence for this given that it is almost impossible to isolate ethical practices from other influences on business performance and that one can only largely prove that ethical practice doesn’t harm business performance. They might also argue that it is the qualitative arguments that hold more weight in the debate. Good students should also seek to question whether or not we have over-

emphasised the role of the business case and examine whether the business case plays down the moral dimension of responsible practice allowing companies to choose to only be ethical when there is a profit motive behind it. 6. ‘The insititutional forces propelling business, the corporate form and the ideological matrix of economic rationality forward, immediately transposes most gestures of responsibility –including sustainability and stakeholder dialogue – into something of a farce’ (Fleming and Jones 2013; 2). Evaluate this critique of CSR. Why do authors such as Fleming and Jones view CSR as inherently incapable of achieving significant change? This question focuses upon allowing students to demonstrate their understanding of the divergent theoretical approaches underpinning work within the CSR sphere. IN particular they have to understand and explain the critical management perspectives of theorist such as Bannerjee, Hanlon, Fleming and Jones etc. and show why they see CSR as merely a tool to perpetuate long-running underlying problems with contemporary industrial capitalism. They should then seek to compare this with theoretical perspectives which highlight a more positive role for CSR and identify its development as evidence of a significant shift in the nature of contemporary business. They might link this to theorists such as Zadek’s notion of the Civil Corporation, or Matten, Moon and Crane amongst others. Strong students will also identify an alternative perspective which suggests that companies should not engage with CSR as they have no need to tackle social and environmental issues in this way, theorists such as Henderson and Crook could be included here. Underlying this, the strong students should be able to put together an answer that utilises these theoretical perspectives with case study examples to present their own evaluation of the role and value of CSR. Students should be given good marks if they have been able to present an informed argument that supports a particular perspective which they adopt for this question (we want to encourage opinion based upon informed evidence and argument more than just sitting on the fence and describing the different perspectives.)...