I have been asked recently if CSR is no longer a focus for business. In recent times GREEN issues for business have been relabeled at PROCESS IMPROVEMENT or efficiency initiatives.
However the fundamentals still remain. CSR and being green is still good for business.
To follow is a recap. Let me know your thoughts!
Corporate Social Responsibility
The key to corporate social responsibility can be encompassed in a new social, governmental and corporate paradigm – Sustainability.
Corporate social responsibility [CSR] has many and varied definitions.
From the mushy
CSR is about how companies manage the business processes to produce an overall positive impact on society
to the hard edged
There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits
We suggest that CSR can be defined as a company’s commitment to operating in an ethical and environmentally, economically, and socially sustainable manner whilst balancing the interests of diverse stakeholders including improving the quality of life of the workforce and their families as well as of the local community and society at large
Ethics
Corporate ethics in the age of Enron seem to some to be an oxymoron, and many New Zealand companies have missed the mark in the way they have treated customers. This is largely because transactional managers have laid down and stringently enforced rules without providing an ethical and social context in which the organisation is to operate.
It is clear that some form of the ‘golden rule’ should govern corporate ethics. Recent research suggests that treating others well and in a way that you would want to be treated has positive social outcomes.
Organisations need to be completely clear about their ethical position, put in place systems and processes to monitor compliance, engage the hearts and minds of the people with exemplary leadership, and communicate this commitment throughout all the stakeholder communities.
Environmental Sustainability
Organisations need to be completely clear about their position on environmental sustainability, put in place systems and processes to ensure easy compliance, engage the hearts and minds of the people with exemplary leadership, and communicate this commitment throughout all the stakeholder communities.
Economic Sustainability
In the long run, an organisation will only be economically sustainable when it earns enough profit to pay for the total cost of capital.
The concept of economic sustainability is well understood and has been promoted by Peter Drucker since the 1960’s. In more recent times, Economic Value Added concepts, such as those promoted by Stern Stewart, have come to the fore.
It is clear that such concepts must be embedded into the organisation’s business model and clearly communicated to the stakeholder community.
Social Sustainability
It is in the area of social sustainability that CSR is usually played out.
Government, seeing itself as the representative of society at large, regulates and legislates to control an organisation’s social impact as well as its economic and ethical impact. In an increasing regulated environment, the position that the Government will take needs to be understood and factored into any consideration of CSR. The position government takes is conditioned by ideology as well as political pressure from the public and from other political groups.
Local government see themselves as the representatives of the local communities and thereby can have a similar position as central government. The overtly political approach of central government is conditioned somewhat at the local level by a more common sense approach in local government to getting things done.
Local communities interrelate to organisations as customers and partners, customers when consuming the organisation’s products or services and partners when consuming sponsorship resources.
The way an organisation treats its workforce and their families has many aspects. When an organisation lays off members of the workforce it is likely to receive attention in all areas of social sustainability – the ethics of outsourcing jobs to Asia – the economics of exporting jobs – the impact of government attitudes to free trade – local attitudes to sweeteners to keep jobs in a region, and so forth. Witness the comments made when Fisher & Paykel re-jigged its global supply chain at the cost of 430 jobs in Dunedin.
With an increasing competition for talent, the consideration of an organisation’s impact on the workforce and their families goes beyond social sustainability and affects the organisation’s economic sustainability. Without enough people to get the job done, organisational initiatives are choked off.
The organisation’s position on social sustainability needs to be viewed as a core value of the organisation. Therefore it needs to be lead, sustained, and managed by the CEO and the leadership team.
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