ESSAY CORPORATE SOCIAL RESPONSIBILITY LECTURE DR vân TH h NG LOAN

Table of ContentsOverview...2 Voluntary Theory:...3 Mandatory Theory:...4 Examples for case study...4 Walmart light bulbs example.... 4 Case study description...4 Stakeholder...5 Group o

OPEN UNIVERSITY HO CHI MINH CITY

SCHOOL OF AVANCED STUDY

BUSINESS ADMINISTRATION

ESSAY CORPORATE SOCIAL RESPONSIBILITY LECTURE: DR VÂN THỊ HỒNG LOAN

STUDENT VĂN TÂM NHƯ NUMBER 1854010312

CLASS QT18DB02

Table of Contents

Overview 2

Voluntary Theory: 3

Mandatory Theory: 4

Examples for case study 4

Walmart light bulbs example 4

Case study description 4

Stakeholder 5

Group opinion 5

Plastic bag example 6

Case study description 6

Stakeholder 6

Group opinion 7

Vehicle tax example 8

Case study description 8

Stakeholder 8

Group opinion 8

Healthy foods vs snack example 8

Case study description 8

Stakeholder 9

Strategy and Tactics 9

Group opinion 10

Example in Vietnam: 11

Case study final question: 11

Question 1: 11

Question 2: 12

Question 3: 13

Question 4: 13

Question 5: 14

References: 14

1

-Richard Thaler, a professor at the University of Chicago (USA) has just won the 2017 Nobel Prize in economics, he is the father of behavioral economics and co-author of a book called Nudge

-His Nudge theory studies how deeply human psychology influences economic decisions His work showed us a new concept in economics called behavioral economics Behavioral economics is the insights from the psychology of judgment and decision

making combined with economics to create a more accurate understanding of human behavior His research helps people better control their behavior

-Nudge is a concept of behavioral science, political theory and economics that proposes

to enhance the positive effects of indirect suggestions to influence the decision-making behavior of groups or individuals Nudge has driven people's behavior by making subtle changes to the context in which they make decisions

“Economics is all about how people make choices; sociology is all about how they don’t have any choices to make.” —James Duesenberry

-Nudge can solve all kinds of problems that governments and businesses find important, some examples are given below:

+ A few years ago the leaders of General Electric wanted to solve smoking problem because it had a negative impact on company’s employees Kevin Volpp and his

colleagues conducted a field survey where employees are divided in to 2 group which peoples

in the treatment group each received $250 if they stopped smoking for 6 months and $400 if they stopped smoking for 12 months People in the control group will not receive any

incentives And the results showed that the success rate of the treatment group was three times higher than the control group, and this effect continue even after the incentives were discontinued after 12 months Based on that work, General Electronic has changed its policy and began using this method for their 152,000 employees

Theories on applying corporate social responsibility:

Voluntary Theory:

According to Garriga & Melé (2004), this theory shows that businesses must contribute

to the society by providing goods and services efficiently and respecting individual

rights Voluntary regimes require significant organizational strength, expertise, and

investment

Voluntary acts in CSR are acts in which businesses voluntarily create benefits in the communities in which their businesses operate The effectiveness of CSR implementation largely depends on potential participants who believe that doing this will bring business benefits, but without business benefits, doing this won’t be effective also shows the

weakness of voluntary CSR behavior (Raino and Outi)

Company need to know that if they can convert customers and transfer the cost burden to them, the business will be extremely beneficial because it will both gain trust and not be burdened with costs

Mandatory Theory:

Companies often tend to focus on their business results, leading to intense competition between companies to maximize individual market share As a result, companies tend to violate the law more to create monopolies that guarantee the highest profits in the long run In these cases, the government needs to intervene in the behavior of companies to ensure equal opportunities for all and restore equal use of natural resources

The law can regulate the behavior of all individuals and organizations in society, so it is easy to force businesses to implement CSR

For the businesses, social responsibility will become a “must” if it reduces corporate

profits It is natural for the behavior of businesses to seek not to fulfill the prescribed social responsibility as long as corporate profits increase

The phenomenon that many business knowing the law but still breaking the law or

circumventing the law is an inevitable consequence of the legal regulations that are not strict and strong enough has creating a compulsive mentality for businesses when

implementing

An example that demonstrates the failure of enterprises to implement CSR is Formosa Corporation, which ranked first in causing pollution in 2016 due to excessive discharge

of waste into the environment, causing heavy economic and social damage society and the environment, in which the most affected is the fisheries sector, followed by business activities, services, tourism and daily life of Hà Tĩnh fishermen

Examples for case study

In general, the nudge theory case study is a collection of many ways that companies and organizations do to encourage people to recycle This article will be divided it into

examples with each example being a description, stakeholders, as well as distinct points

of view The examples will be arranged according to the order in which they are

mentioned in the book "Strategic corporate social responsibility-3th edition-David

Chandler"

Walmart light bulbs example

Case study description

Walmart succeeds in encouraging users to switch to more energy-efficient light bulbs by swapping all incandescent bulbs on ceiling fans for compact fluorescent bulbs and

making them available, at all of their store As "the world's largest retailer" there is no doubt that Walmart can reach a large number of customers to change their behavior in using light bulbs Walmart reaped many benefits with this smart and bold move, such as reducing costs by $7 million per year, selling more than 100 million light bulbs (it is

estimated that each customer purchases more than one product) and thereby save enough energy to run a city the size of Philadelphia - 367 square kilometers and the 5th largest city in the United States

Stakeholder

Walmart

Customer

Gorverment

Strategy and Tactics

If the situation presents a need to reduce electricity consumption or help consumers

convert to more energy-efficient products, how should they act? Walmart has done it in a very practical and natural way As described in the example, Walmart made the switch customer behavior in a way that indirectly encourages their behavior, the behavior of changing the bulbs on the ceiling lights in the store may not be a particularly salient activity on the part of the retailer, but if they replace the entire light bulbs in their 5000+ stores and save millions of dollars every year from this action Also, selling a new product might not be too stimulating for customers, but if it's both new and trusted by the retailer

to the point of swapping out all of their ceiling fan lights for a brand new This is a real push, a very real boost to their purchase It is true that compact fluorescent lamps are more energy-efficient than incandescent bulbs, this is also beneficial for customers, so the spread is stronger

Group opinion

There is no doubt that this is another success for Walmart in transforming consumer behavior and can be considered a complete success as it helps Walmart save energy costs

in the long run, sell more products and at the same time promote and encourage

consumers to use electricity more economically and reasonably - both economically and environmentally

However, the group's view shows that this move is somewhat bolder and more suitable for large companies, because if we change Walmart - a retailer with great worldwide coverage - into a any other small business, it couldn’t certain that it could make such a big impact, and the author himself does not deny that this success is largely due to the size

of Walmart In addition, this stimulus can lead to action as well because this purchase has benefits for consumers - reducing electricity costs - otherwise, perhaps after

thinking logically, they wouldn’t so easy to convert if it wasn't beneficial

Plastic bag example

Case study description

- Only 5,2% on 380 billion of plastic bag was recycle a year

- Bags could last 1000 years in landfill

- Every year, there are 1,6 billion gallons’ oil use to make plastic bags

There is a misunderstanding that paper bags are more environmentally friendly, but the manufacturing process of paper bags causes more pollution to the environment and they are "easier to decompose" which doesn't really help because they are just easier to

decompose on the ground with the impact of sun and wind, not on the road as it is today First, IKEA charge for bags that customer use which decrease 50% bags consumption in

US and 95% in UK Then, they stop offer bags in store any more and set target to

decrease 50% bags consumption in US store in 1 year but it succeeds out of estimated when 92% of there customer response

Irish government taxed every bag for 33 cents then in one week 94% stop using and after

a year every one said no to it Moreover, pressure from global environmental challenges for plastic pollution and the multifaceted global trade environment affect the corporate sector’s operation Changing the behavior of using plastic bags to reusable cloth bags or easy to decompose is a matter of concern and top priority

Stakeholder

IKEA

Government (UK, US, Irish)

Ecologists

Consumer/Citizen

Strategy and Tactics

The recycling of plastic products and waste is essential for the benefit of both people and the environment This increases the importance of raising awareness among companies and promoting initiatives for acting by the principles of CSR Important factors are

regulations and industry-specific norms which can limit the use of recycled plastics, and papers This results in that recycled plastic may not be used in the same new products Instead, it is only used for the production of lower-standard products

Such campaigns inevitably involve a collaboration between government and not only supermarket chains (and the private sector more widely) but also the wider community While state and federal governments oversaw the launching of these initiatives, it was left

to corporate business chains with support from small- and medium-sized businesses also

associated with shopping centers and supermarkets to drive and change the customer’s behavior of using plastic bags

Plastic bags are used in supermarkets so that you can easily carry your groceries Plastic bags can be used for many different purposes They are versatile, which is one of the biggest benefits you get Whenever you go to a store or market, you get a plastic bag at

no cost whatsoever, and that is the reason why the number of plastic bags are racking up after going out shopping Once the items are out of these bags, you can use them in a multitude of ways, such as storing foods in the refrigerator or lining your trash cans, plastic bags can be very convenient for households If you don’t use it anymore, you just need to throw it in the trash

Plastic bags are generally used for a matter of minutes before being discarded, and then take hundreds of years to break down Most of us own reusable bags, but the challenge is remembering to have them with us when we need them One easy way to remember is to always keep a reusable bag (or bags) by your front door, in your handbag, or wherever works for you like going out shopping you, you just need to take them with you if they are

in good shape, can be reusable If you do forget, instead of accepting a plastic bag on auto pilot, see if you can manage without Often we can simply carry the items loose Once you have successfully adopted the habit to always bring your own reusable bag, consider going one step further and persuading your local town to go plastic bag-free

So, why some organizations or supermarkets are still using plastic bags in business? Packaging items in plastic, including for e-commerce shipping, is often the cheapest option for brands Some brands make the excuse that they use plastic packaging that can

be recycled But just because some plastic packaging can be reused or recycled doesn’t

mean it actually is At the supermarkets, recycled bags are just placed on small shelves

nearly the counter but it’s hard for buyers to see and take it In addition, the buyers prefer

free and convenient things, and a part of buyers are familiar with using plastics bags and feel inconvenient when having to take recycled or reused bags to go shopping Companies need to do a better job cutting down on plastic They owe it to their customers and the environments

Group opinion

We have already known about the disadvantages of using plastic bags and how long does it take for a plastic bag to decompose? If the government set the law they plastic bags must be banned immediately, it can’t happen at all Firstly, In order to protect our planet from plastic pollution, it is essential to create social awareness about the harmful effects of plastic And awareness starts by informing and educating our children It is important to teach

children about the importance of saying ‘No’ to plastics The supermarkets can reduce the number of giving plastic bag for consumers, and replace by recycled bags, introduce or

advertise clearly about the disadvantage of plastic bags and the advantages

of recycled/reusable bags And the most important is the government, they can set some campaigns and gradually “Ban The Bag” campaign mobilizing citizens in the fight against single-use plastic bags The objective is to encourage communities to get engaged and take action against the use and distribution of plastic bags in their areas

Nudge aims to influence the choices we make, but without taking away the power to

choose Nudges are beneficial as we don’t always think and decide logically and

consciously, weighing up all of the costs and benefits The majority of our decisions are made instinctively and unconsciously Therefore, in order to drive a positive change in people’s behavior, we need to tap into that instinctive way of thinking

Vehicle tax example

Case study description

For person who not pay for vehicle tax, the agency has simply added the sentence " pay your tax or lose your car" to the letter sent to them, in some cases including a picture of the car with a question mark And so the people who paid for the letter with the sentence doubled and tripled it for the picture

Stakeholder

Government / tax agency

Citizen didn’t pay for vehicle tax

Strategy and Tactics

It can be seen that this is a very simple and to the point stimulation method They either give those people a direct message about the performance of their obligations or suffer the consequences as a result Showing consequences clearly and visually, even with vivid illustrations, makes it easy for them to feel threatened and forced to take responsibility so they don't suffer the consequences

Group opinion

Increasing awareness visually like this is also a good and interesting way, letting those responsible see the consequences of their actions will stimulate them to take

responsibility, but with illegal behaviors, perhaps the best way is still to use the law as a deterrent, because there is no guarantee that these stimulation will work for those who want to avoid it in the first place

Healthy foods vs snack example

Case study description

Children are regularly averse to healthy foods and have a tendency to reject “nutrition policies.” They will prefer a meal full of greasy foods, consisting of burgers and

sandwiches For example, for school lunches, researchers have analysis food choice

behavior at school cafeterias through placing as few nutritious foods as possible in hard-to-reach places (e.g putting milk on the front of the counter and chocolate milk in the back), they are able to dramatically extrude the selections the kids have made Put

broccoli on the top of the meals line Expanded the variety of students buying through 10% to 15%, those are consumer approaches to make them pay more interest to their health by replacing it with healthy foods and reduce the impact of unhealthy foods

Nowadays, healthier options often cost more due to the fact that consumers' health comes first

The opposite mentality is used by supermarkets, they are placing chocolates and candies close to the checkout counter in order that children can disturb their parents buying for them at the time their parents most confused time (juggling purses while packing their bags) All are customer-dealing with behaviors of businesses

The health of consumers and ensuring food safety are very important In addition,

promoting nutrition is also very popular nowadays As society develops, people

additionally pay more attention to health issues At the same time, we can also see the ingenuity of entrepreneurs affecting consumer psychology through the above example Approaching customers to increase product sales, actively influencing the psychology of parents through children

Stakeholder

Nutritionists

Ministry of Heath

School canteen and catering staffs and managers

Supermarket staffs and managers

Parents

Students/Kids

Strategy and Tactics

The basic psychology of consumers is that they often tend to take the things closest to them while choosing food which are placed on the frontline within reach or in their line of sight Usually, unhealthy foods, fast foods have eye-catching "appearance", which

stimulates consumers Although those aren't good for health, but we can't deny that

unhealthy foods look delicious Schools have targeted their kid's nutritional needs and health priorities through placing green ingredients in places that student can access easily This is a good signal due to the fact that the school places the importance of student health

as a top priority