BUSINESS111 Chap.5 Stakeholders, Sustainability and CSR
Stakeholders, Sustainability and CSR
To whom, for what and how
Week 5 asks three questions about corporate responsibility.
The chapter distinguishes shareholders from primary, secondary and voiceless stakeholders, contrasts shareholder primacy with stakeholder primacy and the triple bottom line, and sets out the economic, legal, ethical and discretionary levels of responsibility.
Motive and strategy
It then explains compliance-focused and impact-focused CSR, the obstructionist, defensive, accommodative and proactive strategies, and the risks attached to each, showing how to infer motive from what a firm actually does.
Reading motive from behaviour
The most demanding skill this week is judging motive.
Canvas warns that the same action, such as publishing a sustainability report, can come from compliance or from genuine impact, so the chapter teaches you to look for evidence of what a firm does when responsibility becomes costly. That habit carries forward into the ethics questions of Week 8.
What this chapter covers
- 01
Defining stakeholders and shareholders
- 02
Primary, secondary and voiceless stakeholders
- 03
Shareholder primacy and stakeholder primacy
- 04
Four levels of responsibility
- 05
Compliance focus and impact focus
- 06
Four CSR strategies and their risks
Worked example · free
Classify a CSR strategy from evidence
- 2Name the strategy and its focus.
- 2Support the classification with two facts.
- 2Contrast with the strategy it is not.
Key terms
- Stakeholder
- An individual, group or organisation that can affect or be affected by a company's actions.
- Shareholder Primacy
- The view that a business should put the interests of its shareholders first.
- Triple Bottom Line
- Judging business success by its effects on people, planet and profit together.
- Impact-Focused CSR
- Responsibility built into core strategy to solve social and environmental problems, treating the law as a floor.
- Voiceless Stakeholders
- Stakeholders such as the natural environment and future generations who cannot speak for themselves.
- Compliance-Focused CSR
- Responsibility driven by rules and risk, aimed at staying out of trouble and treating the law as a ceiling.
Stakeholders, Sustainability and CSR FAQ
What makes a stakeholder primary rather than secondary?
Primary stakeholders such as employees, customers and suppliers have a direct contractual or economic relationship with the firm. Secondary stakeholders such as the media, government and community groups have no direct exchange but can still influence the firm through opinion, lobbying or law.
Why is the natural environment called a stakeholder?
Canvas lists the natural environment and future generations as voiceless stakeholders. They are affected by business decisions but cannot speak for themselves, which is why regulators and advocacy groups often act on their behalf.
Can one action be compliance-focused or impact-focused?
Yes. Canvas places firms on a continuum and warns that one action rarely proves a motive. A sustainability report might be a legal requirement or a genuine commitment, so look for further evidence of how the firm behaves when responsibility becomes costly.
What are the four levels of responsibility?
The Week 5 slides list economic responsibility to make a profit, legal responsibility to obey the law, ethical responsibility to respect accepted principles of right and wrong, and discretionary or philanthropic responsibility to serve a wider social role voluntarily. Economic and legal duties are close to mandatory for survival.
What are the four CSR strategies?
Canvas lists obstructionist, also called reactive, which fights social demands; defensive, which does the legal minimum; accommodative, which does the ethical minimum; and proactive, which takes leadership in social initiatives. The first three share a compliance focus and the last an impact focus.
Exam move
Draw the stakeholder rings for a company in the news and place at least eight stakeholders, marking how each can influence the firm. Then write one sentence for each level of responsibility describing what the company does. Finally, place the company on the compliance-to-impact line and defend the placement with the evidence that would change your mind if it were different.
Then explain how a proactive version of the same company would behave differently. Note which level each of the company's actions belongs to. Practise naming one risk for each of the four CSR strategies.
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