What is corporate social responsibility?

The ongoing revolution in communication technology and the effectiveness of knowledge-based economies has created a new model of business and corporate governance. A growing awareness about the need for ecological sustainability and the New Economy framework, with an unprecedented stress on communication and image merchandising, have paved the way for a new generation of business leaders concerned about the responses of the community and the sustainability of the environment.

Seen thus, corporate social responsibility is basically a new business strategy to reduce investment risks and maximise profits by taking all the key stakeholders into confidence. The proponents of this perspective often include corporate social responsibility (CSR) in their advertising and social marketing initiatives.

It acknowledges the debt that the corporation owes to the community within which it operates, as a stakeholder in corporate activity. It also defines the business corporation's partnership with social action groups in providing financial and other resources to support development plans, especially among disadvantaged communities.

What are the three bottomlines on which CSR is based?

People, Planet and Profit. The triple-bottomline stresses the following:

i. The stakeholders in a business are not just the company's shareholders
ii. Sustainable development and economic sustainability
iii. Corporate profits to be analysed in conjunction with social prosperity

What is the importance of CSR for your business?

• The Internet has rapidly become the tool of choice for spreading information about companies around the world.

• The thing every company fears most is becoming the target of a powerful single-issue campaign group. So, rather than wait for it to happen, it is better to take pre-emptive action in the form of environmental product development and labelling, or engaging in such ideas as codes of conduct and social audits.

• We have to take cognisance of the new forces in the consumer market, where the consumer-citizen is metamorphosing (gradually in countries like India) into a citizen-consumer.

• Cause marketing, development partnerships and environmental concerns make good business sense - particularly in terms of recycling materials, employee satisfaction and morale, building up reputational capital and as a distinctive brand marketing tool.

• Due to pressure from multiple social forces, the States has formulated new consumer rights and environment conservation legislation. In India, for instance, we have the Consumer Protection Act, 1986.

• Full one-quarter of the world’s total financial wealth is tied up in intangible assets such as reputation, brand equity, strategic positioning, alliances, knowledge and the like.

How does Cause Branding help your business?

• Competition: marketers today need innovative and compelling ways to build brand character

• Women’s and teens’ buying power: More than other consumer groups, women and teens want to build relationships with the companies they shop at and the brands they buy

• Consumers demand responsibility

• Internet: Companies are now more visible and more transparent

• Protection: During rocky times

Why are CSR practices and possibilities urgently needed in the country?

There is a need to develop a more coherent and ethically-driven discourse on corporate social responsibility. Because:

• Corporate social responsibility offers a two-way street to companies: on the one hand stimulating innovative business and technological initiatives which would open up new avenues for company operations and focus on the prospect of touching new market zones.

• It would give a cleaner societal reputation and socially responsible identity to companies, involving the companies and their employees in the long-term process of positive social transition.

• We can no longer be blinkered about the earth’s resources, or ignore the fact that the economy is constructed on the foundation of natural resources.

• Green-washing should go beyond tokenism to an imperative priority in industrial and technological futures.

• The human rights perspective should be integrated in the very core of corporate social responsibility. The emerging role of civil society in governance cannot be wished away. Corporations are meant to derive profits out of services they provide to consumer-citizens and they must see themselves as private institutions for public good.

• All public institutions need to be accountable to the people at large, especially in the context of health hazards, radiation, genetically-modified food, the chemicalisation of the food processing industry and of agriculture.

How you can develop good standards of corporate responsibility for your business

You can establish a number of policies which reflect your company’s ethos and attitude towards your employees, customers, other stakeholders and the community in general.

Your employees

Every member of your staff has a part to play in creating customer satisfaction and employees are expected and encouraged to contribute to organisational advancement.

Your company’s core principles towards your employess can be based on:

• openness, communication and involvement

• equality, fairness, integrity and meritocracy

• professionalism and quality

• personal development and loyalty

• success – for your customers, employees and shareholders.

Share ownership

You can support employee share ownership as a way of encouraging employees to participate in the progress and profitability of the group.

Fulfilling potential

You should recognise that everything you expect to achieve in business is dependent on the personal performance of your staff. It is important that your people have the skills and knowledge required to successfully perform within markets and that it is vital you have strong, effective managers to lead the company productively and profitably. To help develop the talent required, the company can operate a performance development programme for all staff and, amongst management, the company can run a leadership and succession planning programme. These development programmes can help employees expand on their skills and competencies with the aim of, where appropriate, developing their careers within your company.

Your company’s performance management system for employees should be annually reviewed and developed. It should embrace, amongst others, the following principles:

• clear and agreed personal objectives

• career pathways that identify key capabilities and behaviours at different competency levels across core career paths

• personal development and succession planning to support training and personal growth

• annual appraisals to review progress and determine pay and promotion.

These programmes are an important foundation for growing the business and meeting its global ambitions.

Health and safety

Ensure a safe and healthy working environment for all your employees, outside contractors and visitors, not only on your company premises but also for those staff and contractors working on client sites. The company should comply with all relevant local legislation or regulations, and best practice guidelines recommended by health and safety authorities. You should also liaise with staff regarding your policies and practices so that you can continue to develop work surroundings into a healthy, safe and overall enjoyable environment.

Your business

Ethical conduct

You should recognise the obligations you have towards your staff, shareholders, customers, suppliers, competitors and the community as a whole. You should believe that your reputation, together with the trust and confidence of those with whom you deal, to be one of your most valuable assets. In order to keep this reputation, trust and demand you should maintain the highest ethical standards in carrying out your business activities.

• All employees are required to abide by your ethical policy which prohibits all forms of illegal or immoral behaviour.

• It should be found on the company’s website and intranet. The policy helps to uphold the reputation of your company and staff, and maintains public confidence.

• Staff should be encouraged to promptly report any potentially illegal, improper and/or unethical conduct that they become aware of at their workplace or in connection with their work.

• You should have an environment that enables staff to raise genuine and legitimate concerns internally. However, in the event that staff believe their reporting to line management may result in harassment, victimisation or undue distress, they may contact a confidential help-line to report matters. The help-line provides an opportunity for concerns to be investigated and for appropriate action to be taken to ensure that the matter is resolved effectively.

Customers

The integrity in dealings with customers is a prerequisite for a successful and sustained business relationship. You should operate a highly effective and efficient organisation, focused on meeting customer objectives. Provide products and services which give fair value and consistent quality, reliability and safety in return for fair reward. Operate policies of continual improvement, of both processes and the skills of yur staff, to take best advantage of advances in technology.

This safeguards your operations for the future, ensuring that we continue to add value to our customers’ businesses.

Business partners and suppliers

Aim to develop relationships and improve networking with business partners and suppliers based on mutual trust. Believe one of our major strengths is your approach to alliances and partnerships with customers. Many of your new contracts come through these alliances.

Community

Contribution to local communities can be direct or through your staff. The company can encourage staff to support local neighbourhoods through appropriate activities.

Environment

Consider the development and implementation of environmental standards to be of great importance. As such, strongly encourage the 3 R’s:

• Reduce

• Re-use

• Recycle

Charity

Encourage staff to support charities and participate in local charitable events and, where possible, donate your surplus computers to local good causes.

• make charitable donations.

• develop partnerships with national charities and non-gvernmental organisations in countries in which you operate.

• create a mutually supportive network which helps to add value to the various charitable organisations in which you are involved.

Political contributions

These include seminars and other functions to which politicians are invited, the cost of taking part in industry forums and the cost to the company of giving staff time off to take part in municipal political activities.

Vinod Kuriakose

(The writer Vinod Kuriakose can be contacted at feedback2vinod@yahoo.co.uk)