Week 11Q

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Apr 3, 2024

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Name: Nguyen Hong Lam Le Student number: 8072772 Tutorial Week 11 Lecture: Corporate Approaches to Responsible Business 1. If your employer implemented this scheme at your workplace and requested you to support it, from the corporate social responsibility pyramid discussed in the lecture, which type would you identify it with? Why? The CSR pyramid typically includes four levels: economic, legal, ethical, and philanthropic responsibilities (Fernando 2023) . If the employer implemented the Lendwithcare scheme at the workplace and requested support, it would likely fall under the philanthropic responsibility category of the CSR pyramid: - Economic Responsibility: This level of responsibility involves a company's fundamental duty to be profitable. While Lendwithcare may have some economic implications, such as potential tax deductions or positive publicity, its primary focus is not profit generation but rather social impact. - Legal Responsibility: This level concerns compliance with laws and regulations. Lendwithcare would need to operate within the legal framework, but its main purpose goes beyond mere compliance; it's aimed at making a positive social and ethical contribution. - Ethical Responsibility: Ethical responsibilities involve conducting business in a manner that is fair, just, and ethically sound. Lendwithcare does align with ethical principles as it seeks to empower individuals in need through microloans. However, it goes further by emphasizing the social good and charitable aspects of lending (Birla 2023). - Philanthropic Responsibility: This is the highest level of CSR, and it involves voluntarily giving back to society and engaging in activities that promote social and environmental well-being without expecting direct financial returns. Lendwithcare's core mission is to provide loans to disadvantaged individuals and communities, helping them improve their lives, which aligns with the philanthropic dimension of CSR (Wirba 2023). In summary, Lendwithcare's primary focus on social impact, community development, and charitable lending makes it most closely associated with the philanthropic responsibility level of the CSR pyramid. By implementing such a scheme, the employer would demonstrate a commitment to giving back to society and promoting positive social change beyond its core business activities. 2. Explain three ways this scheme would uphold the social contract of your employer organization. Implementing a scheme like Lendwithcare can uphold the social contract of your employer organization in several ways: - Enhanced Employee Engagement and Satisfaction: When employees see that their employer is actively involved in philanthropic efforts like Lendwithcare, it can boost their engagement and satisfaction. Knowing that their company cares about making a positive impact on society can strengthen the sense of purpose and commitment among employees. This, in turn, fosters a more positive and collaborative work environment, which aligns with the social contract of providing employees with a fulfilling and meaningful workplace. 1

- Positive Brand Image and Reputation: Engaging in socially responsible initiatives like Lendwithcare can significantly enhance your employer's brand image and reputation. Customers, partners, and the public often view organizations that contribute to the well- being of communities favorably. This positive perception can lead to increased customer loyalty, improved business relationships, and a stronger market position. Upholding the social contract involves not just meeting stakeholders' expectations but also contributing positively to the community, which can be achieved through such initiatives (Wang & Liao 2021) - Community Development and Social Responsibility: By participating in Lendwithcare or similar initiatives, your employer organization actively contributes to the betterment of society. This aligns with the social contract by fulfilling the ethical and philanthropic responsibilities of the corporate social responsibility pyramid (Khan 2021). Supporting disadvantaged individuals or communities through microloans not only helps them improve their lives but also demonstrates the organization's commitment to ethical conduct and social responsibility, which is a key aspect of the social contract with stakeholders. 3. Explain the concept of microfinance as proposed and implemented by Nobel Laureate Mohammed Yunus through Grameen Bank. Microfinance, as developed and executed by Nobel Laureate Muhammad Yunus through the Grameen Bank, is a revolutionary financial technique focused at pulling people with limited resources out of poverty. It entails making modest, no-collateral loans to individuals, particularly women, who do not have access to standard banking services. Grameen Bank's business strategy emphasizes community-based lending, in which borrowers organize local groups to guarantee each other's loans, building trust and responsibility. Borrowers can use this technique to create or develop small companies, better their economic situation, and finally escape the cycle of poverty. Yunus' microfinance idea goes beyond loan to include savings, insurance, and financial services, promoting financial inclusion and socioeconomic development in neglected areas worldwide. 4. Identify two similarities and differences between Yunus’ microfinance scheme and Lendwithcare if implemented by your employer. Similarities: - Focus on Poverty Alleviation: Both Yunus' microfinance scheme and Lendwithcare share a common focus on poverty alleviation. They aim to provide financial resources to impoverished individuals and communities to help them improve their economic well- being. Whether it's through microloans or support for income-generating activities, both approaches seek to empower people to escape the cycle of poverty. - Microcredit and Community-Based Models: Both schemes utilize microcredit and community-based lending models. In Yunus' microfinance model, borrowers form small groups and collectively guarantee each other's loans. Similarly, Lendwithcare encourages lending to entrepreneurs in developing countries through an online platform, where individuals can contribute small amounts of money to support borrowers. These community-based lending models promote trust, accountability, and social cohesion (Liberto 2020). 2

Differences Grameen Bank Lendwithcare Organizational Structure Grameen Bank is a formal financial institution with a specific focus on microfinance. It operates as a bank, offering a range of financial services, including savings accounts and insurance, alongside microcredit. Lendwithcare is a crowdfunding platform that connects individual lenders with entrepreneurs in developing countries. It does not function as a traditional bank and primarily focuses on microloans. The organizational structure and regulatory framework are different from that of a formal financial institution like Grameen Bank. Geographical Scope Grameen Bank is based in Bangladesh and primarily serves borrowers in that country. While its model has inspired similar initiatives worldwide, its primary geographical focus is Bangladesh. Lendwithcare is a global platform that connects lenders from around the world with entrepreneurs in various developing countries. It has a broader geographical reach, enabling lenders to support businesses in different regions. In summary, both Yunus' microfinance scheme and Lendwithcare share the goal of poverty alleviation and utilize community-based lending models. However, they differ in terms of their organizational structure and geographical scope, with Grameen Bank being a formal financial institution primarily serving Bangladesh, while Lendwithcare is a global crowdfunding platform connecting lenders with entrepreneurs worldwide (Levell 2015). 5. Using Kantianism, justify the benefits from the adoption of schemes like Lendwithcare by for-profit organisations for their employees to contribute . Using Kantian ethics, we can justify the benefits of for-profit organizations adopting schemes like Lendwithcare, where employees can contribute to social causes, based on the moral principles and duties advocated by Immanuel Kant. Kantian ethics emphasize the importance of moral duty and treating individuals as ends in themselves rather than as means to an end (CFI 2022). - Respect for Employees as Ends in Themselves: Kantian ethics emphasize that individuals should be treated with respect and dignity, recognizing their intrinsic worth. When for-profit organizations provide employees with opportunities to contribute to social causes like Lendwithcare, they are acknowledging the employees' moral agency and their capacity to make ethical decisions. This allows employees to act on their own moral principles and values, treating them as ends in themselves. - Enhancement of Workplace Morale: When for-profit firms encourage social responsibility and allow workers to engage in meaningful activities, employee morale and job satisfaction can increase. Kantian ethics would support this since it recognizes the significance of building a workplace atmosphere that prioritizes employees' well-being 3

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and moral development. Employees that are happier and more fulfilled are more likely to be productive and devoted to the business. References Birla, N 2023, ‘ The Role of Ethics and corporate social responsibility in business operations’ , https://www.linkedin.com/pulse/role-ethics-corporate-social-responsibility-business- operations/ Bureau, GB 2022, ‘ The CSR Pyramid: Economic, Legal, Ethical, And Philanthropic Responsibility’ , Green Business Bureau. https://greenbusinessbureau.com/business-function/executive/the-csr-pyramid-economic- legal-ethical-and-philanthropic-responsibility/ CFI 2022, ‘ Kantian ethics’ , Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/esg/kantian-ethics/ Fernando, J 2023, ‘ Corporate Social Responsibility (CSR)’ , Investopedia. https://www.investopedia.com/terms/c/corp-social-responsibility.asp Khan, MSM 2021, Philanthropy and the Socioeconomic Development of Pakistan . Levell, C 2015, Microfinance and the Grameen Bank | Learning to Give , Learningtogive.org. https://www.learningtogive.org/resources/microfinance-and-grameen-bank Liberto, D 2020, Muhammad Yunus Definition , Investopedia. Wang, S & Liao, Y-K 2021, The Role of Corporate Social Responsibility Perceptions in Brand Equity, Brand Credibility, Brand Reputation, and Purchase Intentions , Sustainability . https://www.investopedia.com/terms/m/muhammad-yunus.asp Wirba, AV 2023, ‘Corporate Social Responsibility (CSR): The Role of Government in promoting CSR’, Corporate Social Responsibility (CSR): the Role of Government in Promoting CSR . https://link.springer.com/article/10.1007/s13132-023-01185-0 4

Week 11Q

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