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CSR AND ITS

SIGNIFICANCE IN

BUSINESS

CORPORATE SOCIAL RESPONSIBILITY


Corporate

Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large

CORPORATE SOCIAL RESPONSIBILITY


CSR isnt about giving money to charity, or just asking people not to print emails for the sake of Mother Earth! First and foremost, businesses exist to make profit, and this isnt meant to change as a goal. The reality is that no organization operates in isolation; there is interaction with employees, customers, suppliers and stakeholders. CSR is about managing these relationships to produce an overall positive impact on society, whilst making money.

THE IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY IN BUSINESS


CSR isnt just good for the environment and communities its likely to significantly influence business success CSR as an add-on, rather than an integral part of how their business operates Enabling employees to participate in charitable initiatives could actually deliver returns to businesses by reducing training and development costs Giving employees a sense of pride by empowering them to make a difference to their communities can help with staff retention

TWO ASPECTS OF OPERATIONS


1.

The quality of their management both in terms of people and processes 2. The nature of, and quantity of their impact on society in the various areas.

Preliminary definitions of CSR


The

impact of a companys actions on society Requires a manager to consider his acts in terms of a whole social system, and holds him responsible for the effects of his acts anywhere in that system

CORPORATE CITIZENSHIP CONCEPTS


Corporate

social responsibility emphasizes obligation and accountability to society Corporate social responsiveness emphasizes action, activity Corporate social performance emphasizes outcomes, results

HISTORICAL PERSPECTIVE
Economic model the invisible hand of the marketplace protected societal interest Legal model laws protected societal interests

SOCIALAND FINANCIALPERFORMANCE
Perspective 1: CSP Drives the Relationship
Good Corporate Social Performance Good Corporate Financial Performance Good Corporate Reputation

Perspective 2: CFP Drives the Relationship


Good Corporate Financial Performance Good Corporate Social Performance

Good Corporate Reputation

Perspective 3: Interactive Relationship Among CSP, CFP, and CR


Good Corporate Social Performance Good Corporate Financial Performance Good Corporate Reputation

KEY ISSUES IN CSR

Labour rights: child labour forced labour right to organize safety and health Environmental conditions water & air emissions climate change Human rights cooperation with paramilitary forces complicity in extra-judicial killings Poverty Alleviation job creation public revenues skills and technology

CSR Management: Management structure


Board of Directors Audit Committee of Board

President & CEO

Group Presidents

Chief Financial Officer

VP of Human Resources

General Counsel

Corporate Responsibi lity Officer

Steering Committee

Corporate Social Responsibility


Do more than required; e.g. engage in philanthropic giving Integrate social objectives and business goals Balance profits and social objectives Comply; do what is legally required Lead the industry and other businesses with best practices

Fight social responsibility initiatives Maximize firms profits to the exclusion of all else Do what it takes to make a profit; law; fly below social radar

Articulate social value objectives

CSR Management: Plan, Do, Check, Act method


Plan Do

Consult stakeholders Establish code of conduct Set targets

Establish management systems and personnel Promote code compliance

Act

Check

Corrective action Reform of systems

Measure progress Audit Report

SPHERE OF INFLUENCE
Who is to be influenced?

SPHERE OF INFLUENCE
What issues are to be influenced?

Sphere of Influence
How are those issues to be influenced?

Compliance Management: Management by certification

ISO 26000: Social Responsibility

ISO 26000 ROADMAP


Principles of SR
1. Ethical behaviour 2. Respect for rule of law 3. Respect for international norms of behaviour 4. Respect for and considering of stakeholder interests 5. Accountability 6. Transparency 7. Precautionary approach 8. Respect for human rights

Core Subjects
Organizational Governance

Implementing SR
7.3 Working With Stakeholders

7.2 Defining scope Fair operating practises Community & society development Consumer issues Labour Practises Human Rights

7.4 Integrating into organization 7.5 Implementing in daily practise 7.7 Evaluating performance 7.8 Enhancing credibility

Environment

7.3 Communicating

Business Criticism / Social Response Cycle


Factors in the Societal Environment

Criticism of Business
Increased concern for the Social Environment A Changed Social Contract

Business Assumption of Corporate Social Responsibility


Social Responsiveness, Social Performance, Corporate Citizenship A More Satisfied Society Fewer Factors Leading to Business Criticism Increased Expectations Leading to More Criticism

CARROLLS FOUR PART DEFINITION

CSR encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time

CARROLLS FOUR PART DEFINITION UNDERSTANDING THE FOUR COMPONENTS


Responsibility
Economic

Legal
Ethical

Societal Examples Expectation Required Be profitable. Maximize sales, minimize costs, etc. Required Obey laws and regulations.
Expected Do what is right, fair and just. Be a good corporate citizen.

Discretionary Desired/ (Philanthropic) Expected

FOUR CHALLENGES TO A GLOBAL ETHIC


Global rules emerge from negotiations and will reflect values of the strong Global rules may be viewed as an end rather than a beginning Rules can depress innovation and creativity Rules are static but globalization is dynamic