Revision Sheet

1. Environment and its A biome is an area classified according to the species that live in that
components location.
Ecotones are areas of steep transition between ecological communities,
ecosystems, and/or ecological regions along an environmental or another
gradient.
edge effects are changes in population or community structures that occur at
the boundary of two or more habitats.
Ecology is the study of organisms and how they interact with the
environment around them. An ecologist studies the relationship between
living things and their habitats
A food web consists of all the food chains in a single ecosystem. Each living
thing in an ecosystem is part of multiple food chains. Each food chain is one
possible path that energy and nutrients may take as they move through the
ecosystem
An ecosystem is a geographic area where plants, animals, and other
organisms, as well as weather and landscapes, work together to form a
bubble of life.
An ecological pyramid is a graphical representation of the relationship
between the different living organisms at different trophic levels.
2. Environmental “A Systematic approach to resource utilization, whereby more of renewable
Management energy sources are replenished for optimum utilization over non- renewable
resources in a sustainable manner, such that one complies with the laws and
legal procedures as laid down by the state, using an extensive
Environmental Management System (EMS) to achieve this goal”

“Environmental management seeks to steer the development process to take

advantage of opportunities, try to avoid hazards, mitigate problems, and
prepare people for unavoidable difficulties by improving adaptability and
resilience.”
3. Environmental Crisis environmental crises occur when changes to the environment of a species or
population destabilize its continued survival.
4. Climate Change Climate change is a change in the average temperature and cycles of weather
over a long period.
5. Climate Change : Burning fossil fuels, cutting down forests and farming livestock are
causes increasingly influencing the climate and the earth's temperature.

6. Climate Justice Climate justice means looking at the climate crisis from the perspective of
social justice. The impacts of climate change affect disadvantaged groups of
people the most. The effect of climate change on these groups needs to be
recognized and addressed.
Solutions need to not only curb climate change; they need to protect and
empower the most vulnerable groups of people too.
7. Carrying Capacity Carrying Capacity is the maximum population of a given species that can
survive indefinitely in a given environment. The max population of the earth
depends on several factors, many of which surround the use and exploitation
of limited non-renewable resources

8. Ecological Footprint Ecological Footprint is a method promoted by the Global Footprint Network
to measure human demand on natural capital, i.e. the quantity of nature it
takes to support people or an economy.

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9. Adaption & Mitigation
Measures

10.Environment Environmental degradation is the deterioration of the environment through

Degradation depletion of resources such as air, water and soil; the destruction of
ecosystems and the extinction of wildlife. It is defined as any change or
disturbance to the environment perceived to be deleterious or undesirable.

11. Environmental Impact Environmental Impact Assessment (EIA) is a tool used to assess the
Assessment (EIA) significant effects of a project or development proposal on the environment.

Three Core Values Integrity- it involves the process which must meet the internationally
Principles accepted practice,
Utility- involves providing the information which is sufficient and relevant
for decision-making and
Sustainability involves the process which results in the implementation

12.Process of EIA

13.Strategic Environment Strategic environment assessment (SEA) refers to systematic analysis of the
Assessment environmental effects of development policies, plans, programmes and other
proposed strategic actions. This process extends the aims and principles of
EIA upstream in the decision-making process, beyond the project level and
when major alternatives are still open.
14.Life Cycle Assessment A Life Cycle Assessment (LCA) is defined as the systematic analysis of the
potential environmental impacts of products or services during their entire
life cycle.
consist of four components
1. Goal and scope definition
2. Inventory analysis
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 3. Impact assessment
4. Interpretation
15.Social Degradation The degradation of society is a process of destruction of the individual, society,
and the state.
The sustainable business’s social impact would include business practices and
policies related to working conditions, diversity in hiring, opportunities for
advancement for women and minorities, lack of discrimination, and the
provision of affordable health care and other necessary benefits. In addition,
social impact includes wages, breaks, adherence to employment laws, safety,
training, and numerous other specific labor practices. Finally, social impact
includes the impact on the local public and social services sector as a result of
the business’s activities.
16.Sustainable Sustainable development is a development that meets the needs of the
Development present without compromising the ability of future generations to meet their
Goals (17 own needs.
SDGs)

17.Business Sustainability In business, sustainability refers to doing business without

negatively impacting the environment, community, or society as a
whole.

Sustainability in business generally addresses two main

categories:
The effect business has on the environment
The effect business has on society

The goal of a sustainable business strategy is to make a positive

impact on at least one of those areas. When companies fail to
assume responsibility, the opposite can happen, leading to issues
like environmental degradation, inequality, and social injustice.
Sustainable businesses consider a wide array of environmental,
economic, and social factors when making business decisions.
These organizations monitor the impact of their operations to
ensure that short-term profits don’t turn into long-term liabilities.

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18.ESG Framework Environmental, social and governance (ESG) is a framework used to assess an
organization's business practices and performance on various sustainability
and ethical issues. It also provides a way to measure business risks and
opportunities in the six capitals financial, manufactured, intellectual, human,
social and relationship, and natural.

19.ESG Measurement ESG metrics are performance indicators of a business's operations with
:ESG Metric environmental, social and governance issues to help determine its performance and
potential risks. Organizational leaders may integrate principles of these areas into
company policies, reports and operations through analyzing or benchmarking. It is
used to describe the transparency, sustainability, and performance of a company.
It measures business operations under the lens of the six capital. It was created to
evaluate the businesses’ impact on the planet, people, profit.
20. ESG Reporting The Global Reporting Initiative is an international independent standards
Framework atleast 3 organization that helps businesses, governments and other organizations understand
and communicate their impacts on issues such as climate change, human rights and
corruption.

Business Responsibility Sustainability Reporting (BRSR) is a voluntary

framework for companies to report their social, environmental, and economic
impacts on society. It enables companies to be transparent and accountable about
their sustainable practices and contributes to the sustainable development of the
economy.

Formerly the Carbon Disclosure Project, CDP is an international nonprofit

organization that provides the voluntary CDP reporting framework, through which
companies can file annual reports detailing their environmental impacts and efforts
to reduce emissions, pollution, and collateral damage to the environment and
climate.
21. ESG Investing ESG Investing (also known as “socially responsible investing,” “impact investing,”
and “sustainable investing”) refers to investing which prioritizes optimal
environmental, social, and governance (ESG) factors or outcomes.
ESG investing is widely seen as a way of investing “sustainably”—where
investments are made with consideration of the environment and human wellbeing,
as well as the economy.
It is based upon the growing assumption that the financial performance of
organizations is increasingly affected by environmental and social factors.
Module II: Ethics: Values & Moral- Definition, types and relevance
22. Environmental ethics Environmental ethics is a branch of applied philosophy that studies the
conceptual foundations of environmental values as well as more concrete
issues surrounding societal attitudes, actions, and policies to protect and
sustain biodiversity and ecological systems.

23. Anthropocentrism Anthropocentrism is the belief that human beings are the central or most
important entity in the universe.
24.Non- Non-anthropocentric ethics grant moral standing to such natural objects as
Anthropocentrism animals, plants, and landscapes. Any account of morality that has the effect of
removing humans from being the sole thing of concern is non-anthropocentric.
25. Teleological teleological ethics, (teleological from Greek telos, “end”; logos, “science”),
theory of morality that derives duty or moral obligation from what is good
or desirable as an end to be achieved.

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26.Deontology In deontological ethics an action is considered morally good because of
some characteristic of the action itself, not because the product of the
action is good. Deontological ethics holds that at least some acts are morally
obligatory regardless of their consequences for human welfare.

27.Utilitarianism, Utilitarianism is an ethical theory that determines right from wrong by

focusing on outcomes. It is a form of consequentialism. Utilitarianism holds
that the most ethical choice is the one that will produce the greatest good for
the greatest number.

28.Consequentialism, Consequentialism is an ethical theory that judges whether or not something

is right by what its consequences are. For instance, most people would agree
that lying is wrong. But if telling a lie would help save a person's life,
consequentialism says it's the right thing to do.
29.Ethical Egoism ethical egoism, in philosophy, is an ethical theory according to which moral
decision-making should be guided entirely by self-interest. Ethical egoism is
often contrasted with psychological egoism, the empirical claim that
advancing one's self-interest is the underlying motive of all human activities.
30.Virtue ethics; Virtue ethics mainly deals with the honesty and morality of a person. It states
that practicing good habits such as honesty, and generosity makes a moral and
virtuous person. It guides a person without specific rules for resolving ethical
complexity.
31.Communitarianism; Communitarianism is a philosophy that emphasizes the connection between
the individual and the community. Its overriding philosophy is based upon the
belief that a person's social identity and personality are largely molded by
community relationships, with a smaller degree of development being placed
on individualism.
32.Environmental An ethical dilemma (moral dilemma) is a problem in the decision-making
Ethical Dilemmas process between two possible options, neither of which is absolutely
acceptable from an ethical perspective
33.Behavioral ethics behavioral ethics as the study of systematic and predictable ways in which
individuals make ethical decisions and judge the ethical decisions of others
that are at odds with intuition and the benefits of the broader society.
34.Altruism; altruism is an ethical doctrine that holds that the moral value of an individual's
actions depends solely on the impact on other individuals, regardless of the
consequences on the individual themselves.
35. Bounded ethicality Bounded ethicality is the idea that our ability to make ethical choices is often
limited or restricted because of internal and external pressures.
36.Conflict of Interest A conflict of interest arises when what is in a person’s best interest is not in
the best interest of another person or organization to which that individual
owes loyalty.

37.Behavioral Biases Behavioral biases may be categorized as either cognitive errors or emotional
biases. A single bias may have aspects of both, however, with one type of bias
dominating. Cognitive errors stem from basic statistical, information-
processing, or memory errors; cognitive errors typically result from faulty
reasoning.
38.Framing Framing bias refers to the observation that the manner in which data is
presented can affect decision making.
39.Moral Muteness; Moral muteness occurs when people witness unethical behavior and
choose not to say anything. It can also occur when people communicate in
ways that obscure their moral beliefs and commitments. When we see
others acting unethically, often the easiest thing to do is look the other
way.
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40.Conformity Bias; Conformity bias is the tendency of people to behave like those around them
rather than using their own personal judgment. People seem to be more
comfortable mimicking others, even regarding ethical matters.
41. Moral myopia Moral myopia refers to the inability to see ethical issues clearly.
42. Self-serving Bias, The self-serving bias is the tendency people have to seek out information and
use it in ways that advance their self-interest. In other words, people often
unconsciously make decisions that serve themselves in ways that other people
might view as indefensible or unethical.
43. Moral equilibrium; Moral equilibrium is the idea that most people keep a running mental
scoreboard where they compare their self-image as a good person with what
they actually do.
44. Stakeholder Analysis Stakeholder mapping and the Mendelow matrix are useful in determining
(Mendelow’s Matrix) stakeholder interest and power in potential marketing strategies.
the Mendelow framework is often used to attempt to understand the influence
that each stakeholder has over an organisation's objectives and/or strategy.
Each stakeholder will be classified as one of the following; high power/high
interest, high power/low interest, low power/high interest or low power/low
interest. These classifications are obtained by automating the Mendelow's
power-interest model. A stakeholder matrix is a tool used in project
management to help review the different project stakeholders to decide how
best to coordinate what they value with the project. Each stakeholder or group
may need a different strategy, and the matrix will help the project manager
identify the best strategy for each group

45. Technology • Technology assessment (TA) refers to the early identification and
Assessment assessment of eventual impacts of technological change and
applications, as a service to policy making and decision making more
generally.
• Technology assessment has been defined as a form of policy research
that examines short- and long-term consequences (for example,
societal, economic, ethical, legal) of the application of technology. The
goal of technology assessment was said to be to provide policy makers
with information on policy alternatives.

46. Module III:- Behavioral Economics and Decision Making

47. Behavioral Economics Behavioral economics studies the effects of psychological, cognitive,
emotional, cultural and social factors on the decisions of individuals or
institutions, such as how those decisions vary from those implied by classical
economic theory.

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48. Nudge Nudge theory is a concept in behavioral economics, decision-making,
behavioral policy, social psychology, consumer behavior, and related
behavioral sciences that proposes adaptive designs of the decision
environment as ways to influence the behavior and decision-making of groups
or individuals.
Nudge is a concept rooted in behavioral science that describes how minor
changes in product design can markedly affect individual behavior.

49. Types of Nudge 1. Default Rules

2. Simplification
3. Use of Social Norm
4. Increase in ease & convenience
5. Disclosure
6. Warning but creative, graphic
7. Pre-commitment strategies
8. Reminders
9. Eliciting Implementation intention
10. Informing people about nature & consequence
https://effectiviology.com/nudge/
50. Choice Architecture Choice architecture is the design of different ways in which choices can be
presented to decision makers, and the impact of that presentation on decision-
making.
Thaler coined the term choice architecture to describe how insights from
behavioral economics could be used to influence choices, without changing
their objective values. In the context of Nudges, choice architecture was said
to minimize biases that result from bounded rationality.
51. Automatic Thinking Automatic Thinking: An instinctive, unconscious, highly efficient mental
process that we have no control over or awareness of. It helps us automate our
thought patterns and behavior.
52. Reflective Thinking Reflective thinking is a form of critical thinking that reflects on experiences
and learnings. This thinking process requires intense introspection and can
improve decision-making and problem-solving processes.
53. Steps of Nudge

54. Green Nudge Green nudges are behavioral interventions aimed at reducing negative
externalities. This means that the reason for such interventions is
conventional but that the type of intervention is behavioral.
Features of green Nudge : GO EAST
Easy, Attractive, Social, and Timely
55. Module IV: Module IV:- Role of Business in Society- Social Entrepreneurship & millennials (New
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 age solution for new age social and environmental issues)
56. Social Entrepreneurship applied to social problem solving whereas traditional,
Entrepreneurship private-sector entrepreneurship focuses on innovation, risk-taking, and large-
scale transformation.
57. Social Entrepreneurs A person or small group of individuals who founds and/or leads an
organization or initiative engaged in social entrepreneurship.
They are creative thinkers continuously striving for innovation in
technologies, supply sources, distribution outlets, or methods of production.
They are change agents who create large-scale change using pattern-breaking
ideas to address the root causes of social problems.
They are empathetic, compassionate and understanding, and they gain
reward from benefiting others. Emotions and empathy play a significant role
in the entrepreneurial process, especially in maintaining the momentum of an
enterprise
58. social enterprise A social enterprise or social business is defined as a business with specific
social objectives that serve its primary purpose.
Social enterprises seek to maximize profits while maximizing benefits to
society and the environment, and the profits are principally used to fund social
programs.
Social enterprises can be both non-profit or for-profit organizations and may
take the forms of many different types of organizations.
59. Social innovation Social innovation refers to the design and implementation of new solutions
that imply conceptual, process, product, or organizational change, which
ultimately aim to improve the welfare and wellbeing of individuals and
communities.
Social innovation is meant to have long term impact at large scale. Social
innovation is traditionally advanced through non-profit endeavours, but the
business community is also open to address society’s challenges too.
60. Social impact Social impact means any significant or positive changes that solve or at least
address social injustice and challenges. Businesses or organizations achieve
these goals through conscious and deliberate efforts or activities in their
operations and administrations.
Businesses or organizations provide impacts to their consumers and the
public all the time, though in different capacities. Social impact, however,
concentrates on the direct positive consequences these parties offer to society.
Social impact can derive from many different sectors and industries. The
public, private, plural, and fourth sectors all play different roles in providing
to society.
61. Social Return on Social Return on Investment (SROI) is a prominent tool used in the
Investment (SROI) development sector that accords a monetary value to the social, economic and
environmental benefits and costs created by an organization or initiative.
SROI borrows from techniques of economic analysis as well as social
accounting to provide a valuation that can be used to better understand the
task, outcomes and impacts of an organization.
It is a framework for measuring and accounting for the broader concept of
value; it seeks to reduce inequality and environmental degradation and
improve wellbeing by incorporating social, environmental and economic costs
and benefits.

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62. scaling of social Scaling is defined as the most effective and efficient way to increase a social
entrepreneurship enterprise's social impact, based on its operational model, to satisfy the
demand for relevant products and/or services.
Social Venture Strategies for Growth:
 Dissemination - social venture’s model an intellectual property (IP)
E.g.: PadMan.
 Branching- Creating multiple offices in locations E.g.: Spice Money
 Affiliation- On boarding similar /relation businesses E.g.: Animall.com
 Social franchising- A hybrid of branching and affiliation that permits
scaling at a faster rate and a lower cost while maintaining control over
quality and the brand E.g.: Aravind Eye Care
63. Challenges faced by • Lack of funding support.
Social Enterprises • Ability to scale-up.
• Duality of mission.
• Lack of proper business strategy.
• Managing Finances.
• Inadequate Market Experience.
• Non-strategic Planning.
• Lack of Capacity.
• Political Barriers.
• Lack of Practical knowledge.
• Not Having the Right Team.
64. Design Thinking The design thinking process is best thought of as a system of overlapping spaces
rather than a sequence of orderly steps.
 There are three spaces to keep in mind: inspiration,
ideation, and implementation.
 Think of inspiration as the problem or opportunity that motivates the
search for solutions;
 ideation as the process of generating, developing, and testing ideas; and
 implementation as the path that leads from the project stage into people’s
lives.

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65. Steps in Design
Thinking

66. Divergent Thinking Divergent thinking is a thought process or method used to generate creative
ideas by exploring many possible solutions. It typically occurs in a spontaneous,
free-flowing, "non-linear" manner, such that many ideas are generated in an
emergent cognitive fashion.

67. Convergent Thinking Convergent thinking is a term coined by Joy Paul Guilford as the opposite of
divergent thinking. It generally means the ability to give the "correct" answer
to standard questions that do not require significant creativity, for instance in
most tasks in school and on standardized multiple-choice tests for intelligence.

68. Divergent Vs Convergent thinking focuses on finding one well-defined solution to a problem.
Convergent Thinking Divergent thinking is the opposite of convergent thinking and involves more
creativity.
69. intrapreneurship Intrapreneurship is the act of behaving like an entrepreneur while working
within a large organization.

According to Skinner SJ & Ivancevich JM, Intrapreneurship is defined as

“An entrepreneurial person employed by a corporation and encouraged to

be innovative and creative”
“a person with entrepreneurial characteristics who is employed within a
large corporation.”
“are usually found in enterprises that encourage experimentation, tolerate
failure, recognize success and share the wealth”.

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70. Distinguish Between

71. Social Social intrapreneurship occurs when employees engage in social

intrapreneurship innovation while employed by an organization. It sits at the intersection of
social entrepreneurship, where entrepreneurs start an organization to address
social issues, and business intrapreneurship, where employees innovate new
products and services

72. Social impact Social impact investing provides finance to organizations addressing social
investing and/or environmental needs with the explicit expectation of a measurable
social, as well as financial, return. It thus aims to foster economic development
while achieving social outcomes.
Social impact investments can also be used to finance social services and
social infrastructure. In these types of arrangements, payments are normally
made based on achieving agreed social outcomes rather than on inputs or
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 activities. Where investors are involved, they will usually expect their
investment to be repaid and, potentially, to earn a return. This return is likely
to depend on the level of social outcomes achieved.
Investment professionals often consider SRI through Environmental, social,
and governance lens as factors for investing. This approach also focuses on the
management practices of the company. In addition, on whether they tend
towards community improvement and sustainability.

73.

74. Socially responsible Socially responsible investing, also known as SRI, refers to an investment
investing, (SRI) strategy that will provide financial return while staying consistent with
positive social impact and moral values. SRI is as straightforward as an
investor who doesn’t want to invest in an industry, they find questionable
morally.
Many investors are choosing to align their portfolios with their personal
values, using their investments to make a positive impact.
75. Sustainable investors Sustainable investors comprise individuals, including average retail investors
to very high net worth individuals and family offices, as well as institutions,
such as universities, foundations, pension funds, nonprofit organizations and
religious institutions. There are hundreds of investment management firms
that offer sustainable investment funds and vehicles for these investors.
Practitioners of sustainable investing. Examples include:
Individuals who invest—as part of their savings or retirement plans—in
mutual funds that specialize in seeking companies with good labor and
environmental practices.
Credit unions and community development banks that have a specific
mission of serving low- and middle-income communities.
Hospitals and medical schools that refuse to invest in tobacco companies.
Foundations that support community development loan funds and other
high social impact investments in line with their missions.
Religious institutions that file shareholder resolutions to urge companies
in their portfolios to meet strong ethical and governance standards.
Venture capitalists that identify and develop companies that produce
environmental services, create jobs in low-income communities or provide

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 other societal benefits.
Responsible property funds that help develop or retrofit residential and
commercial buildings to high energy efficiency standards.
Public pension plan officials who have encouraged companies in which
they invest to reduce their greenhouse gas emissions and to factor climate
change into their strategic planning.

76. Socially Responsible Socially Responsible Index is designed to measure the performance of
Index securities that meet environmental and social sustainability criteria.
E.g.; ESG Leaders Index is a capitalization weighted index that provides
exposure to companies with high Environmental, Social and Governance (ESG)
performance relative to their sector peers.
77. Triple Bottom Line The triple bottom line is a business concept that posits firms should commit to
measuring their social and environmental impact—in addition to their
financial performance—rather than solely focusing on generating profit, or the
standard “bottom line.” It can be broken down into “three Ps”: profit, people,
and the planet
78. Sharing Economy The sharing economy is a socio-economic system whereby consumers share in
the creation, production, distribution, trade and consumption of goods, and
services.
E.g Samso
79. Gift Economy The concept of the gift economy emerged from anthropology and sociology
and has been taken up by political science and economics, and an
understanding of what defines acts of gifting seems to transcend the
disciplines: the obligation to give, the obligation to receive and the
obligation to reciprocate
80. (Paid forward Paid forward model is a social exchange behavior in which individuals such as
model) concept employees and business partners give something of value to a third party
because they have previously received something of value themselves.
In the business environment, engaging in this behavior means that an
individual goes above and beyond what is expected of them in their formal
roles in a way that not only generates individual rewards but also creates
business benefits.
People are more willing to pay for something when told it benefits another—
even if that person is a stranger
While a person may not always recognize that such behavior is an act of
paying it forward, there is an ascertainable tendency to do so.

E.g.: Uber, Airbnb

https://www.sciencedirect.com/science/article/pii/S0007681322000015#se
c2
81. Shared Value-Creating An approach to creating economic value that also creates value for society by
Shared Value addressing its needs and challenges—company success causes social progress
when overcoming societal problems reduces costs for firms, increases
productivity, and opens new markets.

82. Module V:- Definition of CSR and its drivers

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83. CSR “CSR is the commitment of business to contribute to sustainable economic
development-working with employees, their families, the local community and
society at large to improve the quality of life in ways that are both good for
business and good for development”

84. Company Implement The CSR law or more popularly known as the CSR mandate, which came into
CSR effect from April 2014, applies to every company registered under the
Companies Act, 2013, and any other previous companies law qualifying
following conditions.
• – Having a net worth of rupees five hundred crores or more, or
• – Having a turnover of rupees one thousand crores or more, or
• – Having a net profit of rupees five crores or more, during a
financial year
85.True meaning of CSR Ethical Responsibility
Philanthropic Responsibility
Legal Responsibility
Economic Responsibility
86.Drivers of CSR

87.Concscious Capitalism Conscious capitalism is an economic system which builds on the foundations
of capitalism (free markets and private ownership of production) but also
follow a business strategy that aims to support both people and the
environment (environmental and social responsibility).

Components of CC  Accountability
 Integrity
 Trust
 Transparency
 Fairness

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  Egalitarianis

Metrics of CC

88.CC vs CSR

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89.Corporate Social • Corporate social performance (CSP) refers to the principles, practices,
Performance(CSP), and outcomes of businesses’ relationships with people, organizations,
institutions, communities, societies, and the earth, in terms of the
deliberate actions of businesses toward these stakeholders as well as
the unintended externalities of business activity.
•
90.CSP Theory • The corporate social performance model consists of three elements
(social responsibility categories, mode of social responsiveness, and
social issues of stakeholders), which are drawn into a three
dimensional model for easy interpretation by managers.
• Includes “why (principles), what and how (processes), and what
happened (outcomes)”
91.Strategic CSR • Strategic CSR is the incorporation of a holistic CSR perspective within a
firm's strategic planning and core operations so that the firm is
managed in the interest of a broad set of stakeholders to achieve
maximum economic and social value over the medium to long term.

• Strategic Corporate Social Responsibility is a more comprehensive and

intentional approach to CSR, where a company considers the social and
environmental impact of its operations as a key factor in making
business decisions.
92.CSR strategy • CSR strategy is the comprehensive plan companies and funders
use to design, execute, and analyze their corporate social
responsibility initiatives. It includes specific focus areas, program
design, promotion and communication approaches, and evaluation
procedures.
93.Employer branding • Employer branding is a communication strategy focused on a
company's employees and potential employees. It brings together
all the branding and communication elements intended to enhance the
value of belonging to a company, with the ultimate goal of retaining
and attracting talent.

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94.Signaling theory • Signaling theory is useful for describing behavior when two parties
(individuals or organizations) have access to different information.
• Firms that adopt CSR practices positively signal investors that their
firms have superior capabilities for filling institutional voids.
• The “Signaling Theory” is a theoretical framework that investigates the
content reported in sustainability reports, considering that through
signaling, companies can influence stakeholders' perceptions, create a
competitive advantage and positively impact their corporate image.
95.Social identity • Social identity theory was developed to explain how individuals create
and define their place in society. According to the theory, three
psychological processes are central in that regard: social
categorization, social comparison, and social identification. According
to social identity theory, positive CSR perceptions enhance
organizational identification. This leads to the desire to maintain this
positive identity and group membership, which translates into
commitment.
96.Social exchange theory • Social exchange theory is a model for interpreting society as a series of
interactions between people that are based on estimates of rewards
and punishments.
• Interactions are determined by the rewards or punishments that we
expect to receive from others, which we evaluate using a cost-benefit
analysis model (whether consciously or subconsciously).
• Behavior (profits) = Rewards of interaction – costs of interaction.
• Social exchange theory is applied to help explore the decision that
individual employees have towards their engagement with CSR
activities, and to consider the implications of an implicit social, rather
than explicit economic, contract between an organisation and its
employees in their engagement with CSR.

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