D.

SOCIAL RESPONSIBILITY
Many companies are interested in, and put efforts into, CSR, but all too often these are
informal and unpublicised. By advertising what they are doing, those companies involved
can be very helpful in encouraging others to follow their lead. In addition, putting resources
into CSR and building a strong reputation for CSR can bring distinct business benefits to an
organisation as follows:
more positive customer perceptions;
differentiation from competitors;
easier recruitment;
positive press and media coverage;
more favourable treatment from governments.
We can see then that CSR can be a powerful way of adding value to a company and
improving its competitive edge.
It is now recognised, however, that CSR involves much more than simply donating to good
causes and/or encouraging others to do, laudable though both these activities may be.
So, what sorts of issues and activities does contemporary CSR encompass, in addition to
making cash donations to good causes? An indication of the range of CSR issues, together
with examples of best practice, are outlined below. You will note that they have been
categorised into internal and external aspects of CSR.

Internal Aspects of CSR

First we examine some of the major internal aspects of CSR.
Employee Welfare
Rexam, one of the worlds largest packaging companies, based in London in the United
Kingdom, but with global operations spanning Europe, Asia and the Americas, has a
comprehensive policy of protecting employee welfare. For example, the company has
policies and procedures for dealing with employees personal issues and also operates
fitness and healthy eating schemes for employees
Working Conditions
Nokia, one of the worlds leading mobile phone suppliers, applies stringent requirements
throughout its global operations, regarding working conditions designed to protect
employees. These requirements encompass areas and practices such as, for example:
safety and safety training; factory working environment; and canteen and social facilities.
Job Design
CSR now often encompasses job design which would include aspects, such as, for example:
job satisfaction and motivation; working hours; and work/life balance.
Royal bank of Scotland (RBS) has had a system of flexible working for its employees since
2005. The system allows employees to find the right balance between work and life outside
of work. It is particularly suited to those employees who wish to spend more time with their
families or, for those, for example, who act as carers.
Employee Training and Development
Internal CSP also encompasses policies and practices with regard to employee training and
development. Companies with a strong commitment to CSP normally see employee training
and development as part of their social responsibilities.

External Aspects of CSR

The following are some of the more important external aspects of CSR.
Consumer Safety and Welfare
CSR often incorporates policies and practices to protect consumer safety and welfare. This
would include, for example, ensuring products are safe and do not harm consumers. So, for
example, product designs should be thoroughly checked for any inherent dangers.
Components and materials should be checked for toxicity or perhaps the danger of being
swallowed by small children and so on. Or perhaps, where there is a recognised element of
danger associated with using or perhaps abusing a product through careless or excessive
use, such as, alcohol or tobacco products, then CSR would suggest that these dangers are,
at the very least, clearly communicated to customers. Better still, the company might take
active steps to minimise these dangers
Many of the major brewing and drinks companies, such as, for example, Diageo, and
individual brands, such as Fosters, Kronenbourg and Carlsberg, have introduced, for
example, drink awareness campaigns, backed up by clear labelling, regarding the dangers
of excessive consumption. Recently Molson Coors Canada provided a free taxi service to
New Years Eve revellers to encourage them not to drive after drinking.
Markets and Marketing
In addition to the product element in this area, CSR also includes a variety of other areas of
marketing activity. For example, a strong CSR would imply not taking advantage of
vulnerable groups, such as children or sick people, by marketing to them. CSR would imply
fair pricing, nonrestrictive trading practices, nonoffensive advertising, and honesty in
dealing with customers. CSR would also encompass decisions about which markets to
select and operate in, such as. for example. decisions about not marketing to countries with
oppressive political regimes.
Suppliers
CSR should also extend to dealings and relationships with suppliers. One aspect of this
might be policies relating to the treatment of suppliers, specifically regarding treating
suppliers with fairness, and rewarding effective suppliers with trust and loyalty. A
commitment to CSR would imply operating fair terms of trade with suppliers and not
exploiting small or weaker suppliers. Another aspect of CSR in this area would be not to deal
with or abandon suppliers who, for example, are exploiting child labour or causing pollution.
Recently the UK retailer Primark stopped using three major suppliers, all based in Southern
India, for allegedly using child labour.
Respecting cultural differences and human rights
In the global company in particular, CSR would encompass taking account of, and
respecting, cultural differences and human rights issues in different parts of the world. This
might affect several areas of company policy and procedures including, for example:
company clothing and uniforms; company literature and language; the rights of women;
attitudes towards older workers; and methods of doing business.
China is one of the fastest growing economies in the world. This has attracted investment
from companies in the USA, who understandably want to be a part of this growth. However,
several companies have found to their cost that the Chinese way of doing things is very
different to the way things are done in their own countries. Failure to understand and
respond to even seemingly minor cultural and business practice differences can result in
serious business problems. Consider the following differences.

The Chinese lower their eyes as a sign of respect.

Business and negotiations are normally carried out over a meal.

Distribution is normally done through authorised government agencies.

Maintaining face is very important to Chinese people.

Employment
Finally, CSR normally encompasses employment policies and practices.
This would encompass policies relating to, for example; equal pay; non discrimination;
redundancy; and retirement policies.

Some of the Main Questions in CSR

Below are examples of the main questions faced by organisations in respect of CSR.

How far is CSR legitimate in terms of the money spent on it?

Will the organisation gain from investing in CSR?

What is the response of the stakeholders to CSR?

If you are an employee of Marks and Spencer, do you think the company should
spend money on community projects, employee welfare provision, or improvements to
working conditions?

If you were a shareholder of a company, would you be happy if the company was
spending some 100 million of its annual profits on CSR issues and activities?

Do you think the community at large has more respect for companies which are
heavily involved in community and charitable projects?

These are the kind of question that corporations need to address when making decisions
about CSR. Whatever they decide, CSR is here to stay, and many believe that public
pressure will cause it to become a necessity. It is already seen not as a constraint but as an
aim in itself.