CSR AND CSI CHAPTER 14 POST COVID

BUSINESS STUDIES

GRADE 12
TERM 3
CHAPTER 14
NOTES ON CSR AND CSI
2022
POST COVID-REVISED

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CSR AND CSI CHAPTER 14 POST COVID

TABLE OF CONTENTS

TOPICS PAGES
Exam guidelines for CSR and CSI 3
Terms and definitions 4
Meaning of CSR 4
Purpose of CSR 4
Components of Corporate Social 5
Responsibility
Impact of CSR/CSI on businesses 5-6
&communities
The meaning of CSI 7
Purpose of CSI 7
CSI Focus areas 7
Examples of CSI projects 7
Differences between CSR and CSI 8

This chapter consist of 8 pages

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CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES

Learners must be able to:

COOPERATE SOCIAL RESPONSIBILITY/CSR
● Define/Elaborate on the meaning of CSR
● Describe/Explain the purpose of CSR
● Identify/Name/Outline the components of CSR: environment, ethical corporate social
investment, health and safety.
● Identify CSR programmes from given scenarios/statements.
● Explain/Discuss/Evaluate/Analyse the impact
(positives/advantages and/or negatives
/disadvantages) of CSR on businesses and communities.
COOPERATE SOCIAL INVESTMENT/CSI
● Define/Elaborate on the meaning of CSI.
● Describe/Explain the purpose of CSI.
● Outline/Name CSI focus areas, e.g. community, rural development, employees,
environment
● Explain/Distinguish/Differentiate between CSR and CSI.
● Explain/Discuss/ Evaluate/Analyse the impact (advantages/positives and/or
disadvantages/negatives of CSI on business and communities.

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TERMS AND DEFINITIONS

TERMS DEFINITION
Corporate social A continuous commitment from a business to act ethically and
responsibility contribute to economic development.

Corporate social Projects that are not part of normal business activities and are
investment designed and aimed to benefit and aimed to benefit the community.
JSE SRI The Johannesburg Exchange Social Responsibility Index informs
investors about corporate sustainability policies and practices of
listed companies
Initiative Important new plans undertaken as solution to a problem
Stakeholders Include any individual/organisation that relate to the business in
some way or that are directly/indirectly affected by the activities of
the business.

1 COOPERATE SOCIAL RESPONSIBILITY/CSR

1.1 Meaning of CSR
● The way businesses manage their process to affect their stakeholders in a positive
way.
● The continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the local community and
society at large.
● Corporate Social Responsibility/CSR is the way a business conducts its operations
ethically and morally regarding the use of human, physical and their funds.
● A business voluntarily takes steps to improve the quality of life for employees and
their families and communities.
● Corporate Social Responsibility is an obligation required by law and benefits both
business and society.

1.2 Purpose of CSR

● CSR aims at creating a safe working environment for employees.
● CSR programmes are internal programmes that businesses use to comply with laws
and ethics.
● Businesses seek to promote public interest and do away with harmful practices
without the need for any formal legislation.
● Business operations address Triple bottom line through CSR programmes by
considering its impact on people, profit and planet
● Key areas of concern are protecting the environment, the wellbeing of employees
from the community and civil society in general.
● CSR programmes and activities the business undertakes to contribute positively to
the community in which the business operates.
● CSR may take the form of a monetary donation to support local organisations

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1.3 Components of Corporate Social Responsibility (CSR)

● Environment
● Ethical corporate social investment
● Health and safety
● Corporate governance
● Business ethics
● Employment equity
● Supply chain/Distribution channel
● Employees and customers
● Community

1.4 Impact of CSR/CSI on businesses

Advantages/Positives of CSR/CSI on businesses
● Promotes customer loyalty resulting in more sales.
● CSI projects promote teamwork within businesses.
● The business enjoys the goodwill/support of communities.
● CSI helps to attract investors because of increased profits/income.
● Improves the health of its employees through focused CSI projects.
● Assists in solving socio-economic issues like poverty/unemployment, etc.
● CSI projects may be used as a marketing strategy to promote their products.
● Gives businesses tax advantages such as tax reduction/rebates.
● Employees feel as if they are making a difference in working for the business.
● May attract experienced employees/increase the pool of skilled labour which could
increase productivity.
● Positive/Improved image as the business looks after employees/conducts itself in a
responsible way.
● A business may have a competitive advantage, resulting in good publicity/an
improved reputation.
● The government is less likely to enforce issues through legislation to
businesses that voluntarily participate in CSI projects.
● It helps to retain staff/lower staff turnover as employees' health and safety are
considered.
● Businesses become more community-based by working closely with the
community to roll out skills development projects.

AND/OR
Negatives/Disadvantages
● It is difficult to accurately measure the effectiveness of social investment.
● Most managers are not trained/lack experience to handle social programmes.
● Businesses find it difficult to adhere to legislation governing CSI.
● Detailed reports must be drawn up, which can be time consuming.
● CSI activities distract business focus from its core business functions.
● Shareholders may receive less dividends, as some profits are spent on CSI.
● Business may not be supported/Customers may not buy their products/services
resulting in a decrease in sales.
● Small and medium enterprises find it difficult to implement CSI programmes.
● Social spending reduces business/economic efficiency which makes it less
competitive.

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● Social involvement is funded from business profits which could have been used to
the benefit of customers/reduce prices.
● It can increase financial risk, as programmes cost money and may impact negatively
on profits.
● It is not easy to determine the exact needs of the communities, which may result in
fruitless expenditure on CSI.
● Employees may spend more time working on CSI projects instead of focusing on
their core duties.
● Providing goods/services that meet the needs of consumers is, according to some
stakeholders, already socially responsible.
● Some shareholders/stakeholders might withdraw their support from the business as
they feel that social issues should be the government's responsibility.
NOTE: that the impact of CSR and CSI on business are the same

1.5 Impact of CSR/CSI on the communities

Positives/Advantages

● Community skills can be improved through the provision of bursaries.

● Better educational facilities are established in poor communities.
● The standard of living of the community is uplifted/quality of life of communities is
improved.
● Investing in the medical infrastructure, will improve the health of communities.
● Socio-economic issues are attended to which will improve the welfare of the
community.
● Training opportunities in the community increase the possibility of appointments of
members of the community.
● Implementing developmental programmes in the community improves
entrepreneurial skills of communities.

AND/OR
Negatives/Disadvantages
● Businesses are not always equipped to address social problems.
● Communities tend to be dependent on CSR programmes and struggle to take their
own initiatives.
● Businesses tend to focus on CSR programmes that does not directly benefit the
community.
● Some businesses only participate in CSR initiatives to raise profit and do not really
care for the community in which they operate.
● Businesses cannot meet the longer term needs of the society/Business cannot
deliver sustainable CSR programmes.
● Distribution of scarce resources to selected beneficiaries in the community may
cause problems such as discrimination.
● The benefits of the programmes may not filter to the intended persons within the
community.
● Spending money on CSR programmes means the business has to recover expenses
through higher prices which have a negative impact on the economy.
● Less money is available for community projects during unfavourable economic
conditions.

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● Consumers are not easily convinced that a business is acting in the best interest of
the community and the environment.

NOTE: that the impact of CSR and CSI on the community are the same

2 COOPERATE SOCIAL INVESTMENT /CSI

2.1 Meaning of CSI
● It is when a business commits money, resources and time to a specific project that
will improve the lives of people.
● The projects are not directly for purposes of increasing company profits.
● It is the money that the business spend on the community to improve the standard of
living of the community.
● These projects have a strong developmental approach and utilise company
resources to benefit and uplift communities.

2.2 Purpose of CSI

● CSI aims at contributing towards sustainable development of its immediate
communities.
● CSI is enforceable by law and government requires business to make CSI
contributions.
● CSI projects play a positive role in the development of communities.
● CSI reveals a business’s attitude towards the community in which it operates.
● CSI projects are long-term investment
● It is relevant to the South African context where socio-economic upliftment is such a
priority.

2.3 CSI focus areas

● Community
● Rural development
● Employees
● Environment

2.4 Examples of CSI projects

● Donation to support local organisations
● Being involved in conversation projects
● Delivering services that government is unable/slow to deliver/ Building infrastructure
● Investing in job creation projects
● Providing adult basic education
● Teaching entrepreneurial skills
● Sponsoring arts and culture programmes
● Establishing programmes to promote early childhood development

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2.5 Differences between Corporate Social Responsibility (CSR)

and Corporate Social Investment (CSI)
Corporate Social Responsibility Corporate Social Investment
- The intention is to change business
practices.
- Focus is on increasing image and profits.
- Ensure that all internal CSI policies/
practices include stakeholders'
interests/environmental issues.
- Often intended as a marketing initiative.
- Projects are usually linked to the business,
e.g. a manufacturing business offering to
train the unemployed.
- Actively committing money and resources to
uplift the community.
- Focus is on the upliftment of community
without return on investment.
- Ensure that CSI projects are relevant to the
needs of communities.
- Intended to benefit and uplift communities
through social development.
- Projects are external to the business and
have a strong developmental approach.

2.6 Impact of CSI on business and communities

NOTE: This is the same as the impact of CSR on businesses and communities
as mentioned on page 5 -7.