Corporate social responsibility
CSR Report
Definition
Corporate social responsibility may be defined as the values of a company without belief, the tree withers and dies. A company must define these themselves and must be top to bottom. It cannot work if this is delegated outside.
In a wider context, CSR also includes issues such as employee reports, ethical reporting, green reporting and other matters that may be considered of interest to readers of the annual accounts of a company in addition to information that caters for the financial interests of the firm. Firms with a complete CSR strategy have also taken the responsibility to report the costs and benefits of social accounting issues by a business. This may be included in a separate report or as part of the annual accounts. The costs are the costs to the business for example: equipment donated, sponsorship of green project or a local community project.
Corporate social responsibility concerns areas such as:
* Environmental protection (e.g. reduction of emissions, waste and recycling of materials)
* Philanthropy (donating to charities)
* Involvement in social causes (involving anything from human rights to AIDs education)
* Urban investment (working with local government to regenerate small businesses and the inner city environment generally) and
* Employee schemes (higher standards of occupational health and safety, good standard of staff treatment, job sharing, flexi-time etc)
Importance of CSR
For many firms, creating and maintaining corporate social responsibility is being seen as a good and trustworthy operation as a source of competitive advantage. Carmell McConnell sites four reasons why CSR has become increasingly important in the corporate governance:
(1) Mobility: Both suppliers and consumers have greater mobility to move to other firms due to the level of competition in the market for products and services. Businesses needs to win hearts as well as minds;
(2) The war for talent: Employees are increasingly seeking to be employed with companies that can offer packages fit for the individual rather than the other way round. Graduates are coming out of the university saying they want to work for a company that puts something back into the community and into the environment;
(3) Global interdependency: Due to the ...
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(1) Mobility: Both suppliers and consumers have greater mobility to move to other firms due to the level of competition in the market for products and services. Businesses needs to win hearts as well as minds;
(2) The war for talent: Employees are increasingly seeking to be employed with companies that can offer packages fit for the individual rather than the other way round. Graduates are coming out of the university saying they want to work for a company that puts something back into the community and into the environment;
(3) Global interdependency: Due to the global role of investments, firms have become brokers of cultures, as well as products and services. Firms are being required to understand the culture of the country they operate in, bringing such slogans as
(4) The anti-globalisation lobby: This lobby has become so organised and effective that companies cannot just ignore it. Cases are known where anti-globalisation activists have been able to block internationally renowned brands as well as cause physical havoc to certain operations deemed as anti-environmental.
Social responsibility of a business refers to what the business does over and above the statutory requirement for the benefit of the society. The word responsibility emphasizes that the business has more moral obligations towards the society.
The term corporate citizenship is also commonly used to refer to the moral obligations of the business towards the society. It implies that like individuals, corporate are also the part of the society and their behaviour shall be guided by the social norms.
Social responsibilities refer to businessman's decision and actions taken to reason at least partially beyond the firm's direct economic or technical interest.
It also mean the intelligent and objective concern for the welfare of the society that restrains individual and corporate behaviour from ultimately destructive activities, no matter how immediately profitable and leads in the direction of positive contributions to human betterment.
There has been a growing acceptance of the plea that business should be socially responsible i.e. it should discharge its duties and responsibilities in enhancing the welfare of the society of which it is an integral part.
The idea of corporate social responsibility (CSR) is neither new nor radical. The core belief is that the corporation incurs responsibilities to society beyond profit maximisation. Huge corporations possess the power to control and influence the quality of life of employees, customers, shareholders, and residents of local communities in which they operate. A single corporate decision can irrevocably change the lives of thousands of people. Power necessarily entails responsibility. Managers, in pursuing their primary goal of increasing shareholder value, have social responsibilities beyond meeting the minimal requirements of the law.
Although some may argue that business can best serve society only by the pursuit of profits, "the idea that corporations have an obligation to be socially responsible is so widely held, even among business leaders themselves, that it may seem pointless to bring it into question." But what does it mean to be "socially responsible"? Scholars studying this question have found that the idea of social responsibility can be understood best if divided into two distinct concepts: corporate social responsibility and corporate social responsiveness (Mitnick, 1995, 5). An understanding of these concepts is vital to an understanding of what the reflexive law approach advocated here is trying to achieve.
Corporate social responsibility is the idea that "corporations have an obligation to work for social betterment." Archie Carroll divided corporate obligations into categories of economic, legal, ethical, and discretionary responsibilities, based on society's various expectations of business. A corporation has an economic responsibility to produce goods and services, provide well-paying jobs, and earn a profit to ensure its survival. By fulfilling these obligations, the corporation is improving the economic well-being of society. Corporations also have legal responsibilities. These responsibilities come from legislatures, regulatory agencies, and the courts. Such responsibilities can take many forms and can go to shareholders, customers, suppliers, employees, and others.
Corporate social responsibility also means meeting society's expectations of proper business conduct that is not necessarily codified (i.e., ethical responsibilities). For example, although corporations are not legally required to make charitable donations, many members of society expect such behaviour from profitable corporations. In addition, as the law may lag behind social norms, there are responsibilities that society expects corporations to fulfil that may soon be legal requirements. Finally, corporations have purely discretionary responsibilities "about which society has no clear-cut message for business." For example, society may expect corporations to help with major social problems, such as urban blight, due to their "considerable resources and skills," but society does not have any clear expectations of how corporations should go about doing this.
References:
Farnsworth, Kevin. (2004). Corporate Power and Social Policy in a Global Economy: British Welfare Under the Influence, The Policy Press
Grayson, David., Hodges, Adrian. (2004). Corporate Social Opportunity!: 7 Steps To Make Corporate Social Responsibility Work For Your Business, Greenleaf Publishing
Hancock, John (2004). Investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning & the UK's Leading Companies, Kogan Page Publishers.
Ifp. (2007). acca p3 business analysis study text: ACCA Key Study Text, International Financial Publishing
Perrini, Francesco., Pogutz, Stefano., Tencati, Antonio. (2006). Developing Corporate Social Responsibility: A European Perspective, Edward Elgar Publishing
Thomson, Stuart., John, Steve (2007). Public Affairs in Practice: A Practical Guide to Lobbying, Kogan Page Publishers
Vogel, David (2005). The Market for Virtue: The Potential and Limits of Corporate Social Responsibility, Brookings Institution Press
Mitnick, B. (1995) Systematics and CSR: The Theory and Process of Normative
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