Beruflich Dokumente
Kultur Dokumente
Corporate social responsibility (CSR) takes all this into account and can
help you create and maintain effective relationships with your stakeholders. It
isn’t about being “right on”, or mounting an expensive publicity exercise. It
means taking a responsible attitude, going beyond the minimum legal
requirements and following straight forward principles that apply whatever the
size of your business. This guide explains how you can exploit the benefits that
CSR can bring to your bottom line.
Definition
CSR:
‘Corporate’, ‘Social’ and ‘Responsibility’. In broad terms, CSR relates to
responsibilities corporations have towards society within which they are based
and operate, not denying the fact that the purview of CSR goes much beyond
this. CSR is comprehended differently by different people.
Phillip Kotler and Nancy Lee:
“A commitment to improve community well being through discretionary business
practices and contributions of corporate resources”
Mallen Baker:
“Corporate Social Responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the
quality of the workforce and their families as well as of the local community and
society at large.
HISTORY
The concept of CSR in India is not new, the term may be. The process
though scclaimed recently, has been followed since ancient times albeit
informally. Philosophers like Kautilya from India and pre-Christian era
philosophers in the West preached and promoted ethical principles while doing
business. The concept of helping the poor and disadvantaged was cited in much
of the ancient literature. The idea was also supported by several religions where
it has been intertwined with religious laws. “Zakaat”, followed by Muslims, is
donation from one’s earnings which is specifically given to the poor and
disadvantaged. Similarly Hindus follow the principle of “Dhramada” and Sikhs
the “Daashaant”. In the global context, the recent history goes back to the
seventeenth century when in 1790’s, England witnessed the first large scale
consumer boycott over the issue of slave harvested sugar which finally forced
importer to have free-labour sourcing. In India, in the pre independence era, the
business which pioneered industrialisation along with fighting for independence
also followed the idea. They put the idea into action by setting up charitable
foundations, educational and healthcare institutions and trusts for community
development. The donations either monetary or otherwise were sporadic
activities of charity or philanthropy that were taken out of personal savings
which neither belonged to the shareholders nor did it constitute as integral part
of business. The term CSR itself came in to common use in early 1970’s although
it was seldom abbreviated. By late 1990s, the concept was fully recognised;
people and institutions across all sections of society started supporting it. This
can be corroborated by the fact that while in 1977 less than half of the fortune
500 firms even mentioned CSR in their annual reports, by the end of 1990,
approximately 90 percent Fortune 500 firms embraced CSR as an essential
element in their organisational goals and actively promoted their CSR activities
in annual reports.
BACKGROUND OF CSR
CSR was a buzzword created in the early 1970’s although it was seldom
abbreviated back then. Corporate Social Responsibility (CSR, also called
corporate citizenship, corporate responsibility, responsible business and
sometimes corporate social opportunity) is a concept whereby a business
organisation considers the wider social and environmental effects that it has as a
trading entity outside of its direct trading environment. For example, a mining
company destroys the natural landscape when mining so part of its responsibility
to the community where they are mining could be to invest in reforestation
projects.
Japanese companies often have 100 year business plans. If you are
planning to be around in business for the long-run then making sure ALL
your stakeholders are looked after is wise. If you mess the environment
up, people notice. If you mess people around people remember. If you
mistreat people they never forget. And yet when you care for people you
are awarded. You are rarely forgotten when you genuinely care. A
business enterprise is no different to a human – people will have feelings
about it and that impacts business positively or negatively.
Many companies say they care and yet they may not take actions of
caring. Going beyond what is expected becomes exemplar and noted. An
enterprise’s actions are noted the most by its employees and staff. The
business tram that runs an organization knows what is going on. They
know all the high and low points of a company. These exact same people
interact each other every day with the businesses customers. How they
feel about the company will care for its customers making them feel better
and of course they are then more likely to return.
Many businesses make a loss the very first time a customer shopped with
them. This is an amazing little known fact outside of the business world. It
may cost thousands of dollars for some companies to gin new customers
because of long lead times or expensive advertising campaigns. If they
only sell to a customer once then they don’t ever recover their investment
in acquiring that new customer or make profit .customers these days are
spoilt for choice. Many customers choose a business on how they feel
about the company. Most purchasing decisions are subjective and hard to
measure components to a business such as solid CSR programmes and to
the perceived value added benefit a customer received when they shop
with the company.
2008’s Good purpose global study of consumer thinking showed that
almost seven out of 10 (68%) consumers say they would remain to a
brand during an economic downturn if it supports a good cause.
Surprising. And logic-defying.
That same very recent study highlighted some other interesting things
too. Like this: half(52%) of global consumers are more likely to tell others
about a brand that supports a good cause over one that does not, with
54% saying they would help a brand promote a product if there was a
good cause behind it. And going even further....around the world,
consumers have voiced a strong desire for business marketers to link their
brands to social action. Forty-two percent say that if two products are
identical, in price and quality then the one that has the commitment to a
social purpose trumps key factors like design, innovation and brand loyalty
when selecting one brand over the other. Stunning isn’t it?
The citizen brand emerges. And this comment from this key report just
says it all: It means that putting meaning into marketing is more important
than ever. One of the reporter puts it this way: “These findings present
brands with an opportunity to engage in ‘mutual social responsibility’-
brands and consumers working together to effect positive social change
for mutual benefit and to realize a ‘return on investment’, a new metric
that looks at participation and involvement as true builders of brand
loyalty. When a brand acts as a ‘citizen brand’ contributing to community
and society beyond its functional benefits, ‘doing good’ can translate to
‘doing well’ and the brand can forge a stronger emotional bond with its
consumers.
Gandhiji was a person who in several respects was ahead of his time. His
view of the ownership of capital was one of trusteeship, motivated by the belief
that essentially society was providing capitalists with an opportunity to manage
resources that should really be seen as a form of trusteeship on behalf of society
in general. Today, we are perhaps coming round full circle in emphasizing this
concept through an articulation of the principle of social responsibility of
business and industry. While the interests of shareholders and the actions of
managers of any business enterprise have to be governed by the laws of
economics, requiring an adequate financial return on investments made, in
reality the operations of an enterprise need to be driven by a much larger set of
objectives that are today being defined under the term Corporate Social
Responsibility (CSR).
The broad rationale for a new set of ethics for corporate decision making,
which clearly constructs and upholds a company’s social responsibility, arises
from the fact that a business enterprise derives several benefits from society,
which must, therefore, require the enterprise to provide returns to society that
have now become even more important than traditional relationship between
government and business. These go far beyond what was the case a few
decades ago.
Business firms have to obey the law- this has always been a precondition
and has been accepted as a minimum social responsibility of businesses, even
by the hardest critics of CSR. However, as the system of law and the
enforcement apparatus of the state are incomplete there is a likely possibility of
regulation gaps and implementation deficits which have to be filled and balanced
by diligent managers with prosocial behaviour and an aspiration to the common
good. In as much as the state apparatus does not work perfectly there is a
demand for social responsibilities of business, i.e. corporations are asked to
comply to the law when the enforcement body is weak and to even go beyond
what is required by law, when the legal system is imperfect or legal rules
incomplete.
What is Globalisation?
Globalization is one of the most cited catchwords of our time and is used
to describe a process of social change on the macro level of societies. Today,
many social and economic phenomena such as peace, crime, migration,
production, employment, technological developments, environmental risks,
distribution of income and welfare, and social cohesion and identity are
considered to be affected by the process of globalization. We define globalization
as the process of intensification of cross-area and cross-border social relations
between actors from very distant locations, and growing transnational
interdependence of economic and social activities holds that with globalization
“the modes of connection between different social contexts or regions become
networked across the earth’s surface as a whole”. During this process the nation
state loses much of its political steering capacity. The state’s enforcement power
is bound to its territory while the subjects of state regulation, especially the
business firms, have massively expanded their activities beyond national
borders. At the same time, new social and environmental challenges emerge
which are transnational in scope and cannot be regulated or governed
unilaterally. Also, new actors and institutions, such as international
organizations, transnational corporations, nongovernmental organisations, and
civil society groups gain political influence. Their activities are not limited to a
certain territory. Their influence stems from the political power they can exert
inside and outside the traditional institutions of nation-state politics, e.g. by
lobbying public relations, campaigning, knowledge and competence, offering
material or symbolic support, or threatening with disinvestments or the retreat of
resources.
One could suggest that the globalization process was started to some
extent deliberately by political decisions. However, it was also caused and/or
supported by technological, social, and economic developments. The intensified
cross border transfer of resources, such as assets, capital, and knowledge, is in
part result of the liberalization policy of many nation state governments after
WWII. The growing cross-area and cross-country social exchange was also made
possible through technological inventions and achievements (e.g.
telecommunications, mass media, the Interne, transportation, etc.) The
exchange processes are accompanied by a growing independence between
citizens from different communities through the emergence of global risks (e.g.
nuclear weapons, global warming, global diseases, etc.) which connect the
destinies of peoples with each other. In the following we will describe some
dimensions of globalization.
Dimensions of Globalization
• Economic Developments
On the macro level, the liberalization of trade, investments and financial
transactions has led to a huge increase both in foreign direct and
investments and in cross-border trade. Though some authors suggest that
with regard to certain macroeconomic measures the situation today is not
much different than it was one hundred years ago, we hold that with a
new situation without precedent in history.
First, economic measures show that for several decades the growth
rate in the volume of world merchandise exports as been much higher
than the growth rate of world GDP and that the intra-firm trade has
expanded dramatically. Second, the unprecedented interconnectedness of
the destiny of people from different social settings and distinct locations
has created new challenges. Also, on the firm level, one can observe an
entirely new situation. Business firms are able to split up their value chain
and to source where the production of goods and services is most
efficient. By means of technology they are able to collect information
about sources, qualities and prices, and to coordinate the various value
chain processes inside and outside the boundaries of the firm. Today, at
large multinational corporations have become very powerful economic and
social agents. The world’s biggest corporations have revenues that equal
or even exceed the gross domestic product of some developed states. The
power of MNCs is not just based on the enormous amount of resources
they control. Their power is further enhanced by their mobility and their
capacity to shift resources to locations where they can be used most
profitably and to choose among suppliers applying criteria of efficiency. In
effect this gives multinational firms the latitude to choose locations and
legal systems under which they will operate. However, the power of the
MNCs and their leaders is not unlimited. Rather, top managers more and
more feel the pressure of the global financial markets when they have to
respond to the profitability demands of investors and have to protect their
firms from hostile takeovers. Institutional investors direct their attention
and money to profitable firms and investments. Corporations that do not
earn high enough profit are sanctioned with disinvestment. Managers who
do not earn a high stock price may become the targets of takeovers. All in
all the global financial market pressures business firms to stress profit and
to engage only in such projects that will lead to satisfactory return.
Altruistic managers with pro-social attitudes may therefore be suspect in
the emerging shareholder society and may be forced to adapt their
behaviour to the expectations of profit seeking investors.
Globally companies are expected to do more than merely provide jobs and
contribute to the economy through taxes and employment. Consumers and
society in general expect more from the companies whose products they buy.
This is coherent with believing the idea that whatever profit is generated is
because of society, and hence mandates contributing a part of business to the
less privileged.
Corporate Brand
Further, CSR can help to boost the employee morale in the organisation
and create a positive brand-centric corporate culture in the organisation. By
developing and implementing CSR initiatives, corporate feel contented and
proud, and this pride trickles down to their employees. The sense of fulfilling the
social responsibility leaves them with a feeling of elation. Moreover it serves as a
soothing diversion from the mundane workplace routine and gives one a feeling
of satisfaction and a meaning to their lives.
Corporate branding is the process by which you impart a personality or public
image to an entire company, not just its products or services. It’s different from
“umbrella branding” because “umbrella” suggests that there are specific sub-
brands as identity.
May be this will help:
Procter and Gamble, a corporate entity, has a brand image or “corporate
brand”. It’s often referred to as “P&G”.
The company also has a number of brands, like Ivory – which is a bar soap,
a liquid dishwashing detergent, and a light duty laundry product.
None of the individual brands, or the umbrella brand, use the P&G brand
as part of their identity. P&G is strictly the corporate brand.
Of course, sometimes the corporate image is so important to the
individual brands that the corporate brand is also an umbrella brand, covering
many different products/services as well as the corporation. It can work, but
usually it’s difficult to suggest a single benefit for a diverse family of products
and services, so the corporate brand is better left intact for the corporation.
An excellent answer form good man, but one of the things I enjoy about
branding is it’s so imprecise – so hear another example of the same thing –
Corporate Brand is the brand that applies to corporate entity; the key
difference is its target market is shareholders, analysts, fund managers, i.e. the
investment community.
The last decade has seen a mad rush amongst multinational companies to
gain first mover advantages in emerging markets by establishing operations and
subsidiaries. However most of the firms have found out to their cost that local
completion was not as easy to overcome as they had thought with matters made
being worse by cutthroat competition amongst the multinationals themselves.
Most multinationals are beginning to realise that loss making operations cannot
be continued year after year under the pretext of investment for future
expectation of profits. It is high time that the local subsidiaries start to deliver
profits of their rather than continuing to act as sinks of the firm’s global
resources.
Graphical Representation:
Redesigning marketing paradigms for emerging markets
CSR trends that provide rewards for companies, communities and the
world...
Companies today are increasingly sensitive about their social role. The
companies not only concentrate on how they will position their product or how
they will sell it but also they have a social strategy because they have started
feeling that brands are built not only around emotions and values that people
ascribe to those products
All of these trends mean that businesses need to manage their environmental
and social impacts much better: corporate responsibility has to cease being a
bolt-on to business operations; and instead be built-in to business purpose and
strategy. This involves a clear link to business values and culture; strong
leadership from the top; and the active engagement of stakeholders.
Enhanced ability to recruit, develop and retain staff. This can be the direct
result of pride in the company’s products and practices, or of introducing
improved human resources practices, such as “family-friendly” policies. It can
also be the indirect result of programs and activities that improve employee
morale and loyalty. Employees become champions of a company for which they
are proud to work.
Investors are changing the way they assess companies’ performed and
are making decisions based on criteria that include ethical concerns. The
Social Investment Forum reports that in the US in 1999, there was more
than $2 trillion worth of assets invested in portfolios that used screens
linked to the environment and social responsibility. A separate survey by
Envirnics Internationals revealed that more than a quarter of share-
owning. Americans took into account ethical considerations when buying
and selling stocks. (More on socially responsible investment can be found
in the ‘Banking and investment’ section of the site.)
Employees are increasingly looking beyond pay checks and benefits, and
seeking out employers whose philosophies and operating practices match
their own principles. In order to hire and retain skilled employees,
companies are being forced to improve working conditions.
6. Supplier relations
1. Company Benefits:
• Charitable contributions
• Better product durability and functionality
• Corporate involvement in community education, employment and
homelessness programmes;
• Product safety and quality
3. Environmental benefits:
A key challenge facing business is the need for more reliable indicators of
progress in the field of CSR, along with the dissemination of CSR strategies.
Transparency and dialogue can help to make business appear more trustworthy,
and push up the standards of other organizations at the same time.
Evaluation
What is an evaluation?
Why evaluate?
How to do an evaluation?
Finally, it is important that firms celebrate their successes. When goals are met
and progress is achieved all parties concerned need to give each other a pat on
the back for a job well done.
Reporting
Thematic Areas
Health
Education
Education too has been a primary focus area for the foundation, and a
number of initiatives have been designed to promoted non-formal education in
the community. Akansha, a non - governmental organization that focuses on
developing a strong educational foundation, deep sense of self esteem and
facilities fun activities for underprivileged children has been identified to
facilitate education and awareness. PMC schools have been computers to
promote IT education in the neighbouring area of Chandan Nagar.
Simultaneously, IT education programs have also been deployed to spread
computer literacy within Zensar’s support staff. The response to all these
initiatives has been overwhelming and the foundation is now taking up more
initiatives to address the requirements.
Environment
Livelihood
CSR Management
It has been observed that for 37% corporates, the CSR initiative is being
implemented through a well structured separated Foundation. Among 58%
corporate there is a separate CSR department that takes care of the activities to
be implemented.
Reporting Initiatives
Public disclosure and reporting was another metric used to compare the CSR
initiatives of corporate. It was observed that within the sample of 24 countries
used, 25% are reporting as per the GRI guidelines while 21% were signatories of
the UN Global Compact. An equal number of corporates (21%) came up with a
separate CSR report while there are only a few (8%) who have a mention of their
CSR activities in the annual report. Comparative numbers of reporting of CSR in
the annual report at global level are much higher. For instance in 1977 the
number was 50%, which rose to 90% in 1990.
CSR has now been discussed in the companies across the globe for more
than 15 years but a lot of people in and outside of business are very critical of
CSR. This argument is that CSR. Their argument is that CSR is a management
fashion that will go away at one point and be replaced by something else.
Corporate Social Responsibility (CSR) and its potential role as a force for change
in a globalised world:
A new terminology that has been gaining grounds in the community today
is Corporate Citizenship. So what is corporate citizenship and is this
fundamentally different from corporate responsibility? Corporate citizenship is
defined by the Boston College Centre for Corporate Citizenship. As the business
strategy that shapes the values underpinning a company’s mission and the
choices made by its executives, managers and employees as they engage with
society. According to this definition, the four key principles that define the
essence of corporate citizenship are: 1) Minimise harm 2) Maximise benefit 3) Be
accountable and responsive to key stakeholders 4) Support strong financial
results. Thus, corporate citizenship, similar to its CSR concept, is focusing on the
membership of the corporation in the political, social and cultural community,
with a focus on enhancing social capital. Notwithstanding the different
terminologies and nomenclature used, the focus for companies today should be
to focus on delivering to the basic essence and promise of the message that
embodies these key concepts – CSR and Corporate Citizenship.
Conclusion: