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Corporate Social Responsibility
Corporate social responsibility is known by different names. These include corporate responsibility, corporate accountability, corporate ethics, corporate citizenship or stewardship, responsible entrepreneurship, and “triple bottom line,” to name just a few. CSR has become increasingly integrated into modern business practices, there is a trend towards referring to it as “responsible competitiveness” or “corporate sustainability” (Hohnen, 2007).
Definition of CSR
Corporate social responsibility is exercised by organizations when they conduct their business in an ethical way, taking account of the social, environmental and economic impact of how they operate and going beyond compliance (Armstrong & Taylor, 2014).
CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner. ‘Ethically or responsible’ means treating stakeholders in a manner deemed acceptable in civilized societies. Social includes economic responsibility. Stakeholders exist both within a firm and outside. The natural environment is a stakeholder. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for peoples both within and outside the corporation (Hopkins, 2004).
Most of the companies practice CSR and now it has become important like any other vital policies in organisations. According to Rionda (2002) 1400 companies which were generating more than US$1.5 trillion in San Francisco were engaging in CSR and in London, more than 60 major global companies were engaged in CSR. In developing countries such as India, Indonesia, Brazil were having a strong CSR presence in their organisations.
Source: Study.com
Areas of corporate responsibility
CSR initiatives fall into four main areas:
1. Workplace – focusing on the rights and well-being of employees and other workers in the value chain
2. Marketplace – including areas such as the impact of its products or services, supply chain issues, as well as fair trading, corporate taxes, and anti-bribery.
3. Environment – concerned with the organisation’s environmental impact
4. Community – focusing on how the organisation’s activities positively or negatively affect the societies in which they operate
(CIPD, 2017).
Introducing a corporate social responsibility strategy
The following guidelines may be helpful for the HR function and/or the business to consider when introducing a CR strategy:
* Identify all the stakeholder relationships that are necessary for ethical and sustainable business success.
* Clarify the areas of CR that are relevant to the organisation, from environmental impacts to remuneration policy, to labour conditions in subcontractors and supply chains.
* Understand how the CR strategy is aligned with business strategy and HR practices.
* Get the top team on board, and know how to argue the case for CR, including the business benefits, to different stakeholders.
* Ensure CR is properly reflected throughout the suite of training provided.
* Effectively measure and evaluate CR performance so that the results of CR activity can be seen clearly and improved upon.
* Publicise and promote successes.
(CIPD, 2017)
According to Hohnen (2007) Business can only flourish when the communities and ecosystems in which they operate are healthy. CSR is not a luxury that can be avoided but a necessity that has grown in importance through the global recession. And in ‘doing the right thing’ by their stakeholders, organisations will also realise a range of benefits from brand enhancement and reputation, to building employee retention and satisfaction (CIPD, 2017).
“We believe that the leading global companies of 2020 will be those that provide goods and services and reach new customers in ways that address the world’s major challenges—including poverty, climate change, resource depletion, globalisation, and demographic shifts.” Niall Fitzgerald, former CEO & Chairman, Unilever (cited in Hohnen, 2007).
CSR brings a range of benefits to organisations. It will create a positive name for the organisation and in return, companies will be able to reap the benefits out of the good name. Companies will benefit in many ways It will work as a good marketing tool and people will buy these products because it will give the consumers a positive feeling about the company and the products. CSR will help the company to recruit and retain the staffs. This will create a feeling of belongingness among employees. Everybody will want to associate with these organisations as it will make the stakeholders to be proud of being part of such organisations. CSR has become the unofficial face of the companies.
References:
Armstrong, M. & Taylor, S., 2014. ARMSTRONG’S HANDBOOK OF HUMAN RESOURCE MANAGEMENT PRACTICE. 13th ed. London: koganpage.
CIPD, 2017. CIPD. [Online] Available at: https://www.cipd.co.uk/knowledge/strategy/corporate-responsibility/factsheet [Accessed 28 September 2018].
Hohnen, P., 2007. Corporate Social Responsibility: An Implementation Guide for Business. Manitoba: International Institute for Sustainable Development.
Hopkins, M., 2004. Corporate social responsibility: an issues paper. Geneva: International Labour Office International Labour Office.
Rionda, Z.L., 2002. WHAT IS CORPORATE SOCIAL RESPONSIBILITY? Washington: U.S. Agency for International Development.
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Article accepted.
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