Corporate Social Responsibility
Introduction
We are observing a battle for power in modern organizations that has enormous implications for management. It has nothing to do with the battle between unions and management –that is just a minor skirmish left over from the past wars. The real battle is the one taking place between the individual and the organization itself.
The modern organizations today have become important components of our society, if not of any society, regardless of ideology, culture, and tradition. Indeed capitalist and even socialist countries rely on the establishment of these institutions supporting its varying political economies. It is a given fact that these organizations become the means for economic growth and stability. To a large degree, the wealth of the society, evident in the level and richness of economic, social, and cultural resources is a function of the sophistication and complexity of its organizations and institutions. Economic or productive value is nonetheless derivative from its worth and its extension of organization’s profundity for wealth-profit index which by way serves as the competitive measure to sustain its existence. Although these radical lines of thought-analysis presented a truly preposterous consideration or thinking about a businessman’s hypocritical denial for profit and more profit at the expense of labor.
Moreover, no matter how noble and promising to the sensuous pleasures of man, the befitting ideology or organizations and its treatment of labor, technological pervasion, cultural manipulation, class-power relations, and other demeaning factors have to be resurfaced out from a pseudo construct. Yet, though organizations and business enterprises implicitly admit such ideological exploitation and labor oppression to human value of labor, nowadays, business entities tried to minimize its distance from the society by keeping itself aware of its social responsibility. Corporations now can be said to be at the forefront to promote social betterment and development by sharing its resources for the projects and programs that have a social cause.
Corporate Social Responsibility
One of the challenges which the society and its inhabitants are trying to make is to ensure sustainable and balanced development. The needs of current and future generations cannot be met unless there is respect for natural systems and international standards protecting core social and environmental values. In this context, it is increasingly recognized that the role of the business sector is significant. As a part of society, it is in business’ interest to contribute to addressing common problems. Purposefully speaking, the success of flourishing business is when the communities and ecological units in whom it operates are healthy.
Using the working definition of ISO 26000 Working Group on Social Responsibility, social responsibility then is a responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour and is integrated throughout the organization.
Gordon Brown, Chancellor of the Exchequer, articulated that “today, corporate social responsibility goes far beyond the old philanthropy of the past – donating money to good causes at the end of the financial year- and is instead an all year round responsibility that companies accept for the environment around them, for the best working practices, for their engagement in their local communities and for their recognition that brand names depend not only on quality, price and uniqueness but on how, cumulatively, they interact with companies’ workforce, community and environment. Now we need to move towards a challenging measure of corporate responsibility, where we judge results not just by the input by its outcomes: the difference we make to the world in which we live, and the contribution we make to poverty reduction (www.csr.gov.uk, 2004, p.2).” Undoubtedly, private sectors accorded significant contribution of employees, customers, communities, environment, competitors, business partners, investors, government and others in the development of business and prosperity of profit and income.
Business opinion polls and corporate behaviour both show increased levels of understanding of the link between responsible business and good business. As the CEO of Storebrand, Idar Kreutzer puts it: “We are committed to creating economic value, but we are not indifferent to how we do it...Progressive businesses are gaining competitive advantage by responding to societal signals…We prosper by helping society to prosper (2007).” Moreover, CSR is understood to be the way firms integrate social, environmental and financial concerns into their values, decision making, strategy and operations in a transparent and accountable manner, and thereby establish better practices within the firm, create resources and improve society.
Since businesses play a vital role both in job and wealth creation in society and in the efficient use of natural capital, CSR is a central management concern. It positions companies to both proactively manage risks and take advantage of opportunities, especially with respect to their corporate reputation and the broad engagement of stakeholder. In this case, CSR encourages companies and firms to look at a wider range of stakeholder interests, which can widen understanding of the potential risks and opportunities for the business while offering wider social or environmental gains. More transparency on the issues they are facing and how these are being managed can help improve key relationships with employees, consumers, and other stakeholders.
Now since CSR is gaining positive feedback and make businesses productive in society’s programs and initiatives, the business case for CSR will differ to firm, depending on a number of factors. These include the firm’s size, products, activities, location, suppliers, leadership and reputation. It revolves around the fact that firms that fail to engage parties affected by their activities can jeopardize their ability to create wealth for themselves and society, and increase the risk of legal or other responses. There are significant potential benefits for firms implementing CSR. These benefits are gears towards a better anticipation and management of an ever-widening spectrum of risk, improve reputation management, enhanced ability to recruit, develop, and retain staff, improved innovation, competitiveness and market positioning, enhanced operational efficiencies and cost savings, improved ability to attract and build effective and efficient supply chain relationships, ability to address change, robust social license to operate in the community and catalyst for responsible consumption. These benefits are gained after taking CSR within the firms’ structures and management.
There are several firms that witnessed the real benefits it gain from adhering and implementing CSR. The Indian TATA group is engaged in a wide variety of activities directed at helping community development; Edelman Trust Barometer suggested that there had been an improvement in public perception of business. This may have been due to the increased attention businesses are giving to CSR issues and Standard Chartered Bank’s campaign “seeing is believing” help cataract sufferers resulted in a number of awards for the company.
Moreover, Jean Frijns, Chief Investment Officer, ABP commented, “there is a growing body of evidence that companies which manage environmental, social and governance risks most effectively tend to deliver better risk-adjusted financial performance than their industry peers (2004).” Firms typically put CSR approach in place for more than just economic reasons. In many cases, it is due to moral principles, belief that it is the moral thing to do and concern for the welfare of present and future generations that spur a firm to consider its responsibilities.
Again some individual companies in the UK like BT and the Cooperative Bank already quantify the impact of their CSR activities on their competitiveness. This significant impact of CSR is brought about by the fact the governments forerunning such approach to be integrated in various business organizations. As Howes, the director of Sustainable Economy Programs, Forum for the Future put it government has a crucial role to play in enabling companies to contribute to sustainable development and there is a whole mosaic of different ways in which government can intervene.
Indeed, the role of CSR in the society’s betterment and development cannot be reduced to superficial contention rather a noble work dedicated by several number of companies which are not only thinking of profitability and productivity but for the social causes helping marginalized and oppressed to alleviate their suffering.
In this case, looking into the role of CSR, government as well as private sectors of business organizations is not only spending their resources and wealth for higher production rather is gaining support from the consumers, in turn, helps raise their profitability and low production costs. Organizations with humanitarian heart are notably socially aware of the society’s primal concerns. Moreover, the need for integration within the organization of the CSR approach can help people inside to gain knowledge about this social approach for social programs.
Hence, CSR becomes the new trend gaining support from multinational companies and organizations which have a great concern with the condition of the global society.
References
Hohnen, P (2007). Corporate Social Responsibility: An Implementation Guide for Business. International Institute for Sustainable Development. Canada
Corporate Social Responsibility: A Government Update. www.csr.gov.uk
www.seeingisbelieving.or.uk/fundraise/new.asp
http://tata.com/0_our_commitment/community_initiatives/index.html
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