II.

Summary of the Lessons

Anatomy of CSR

In the early years Corporate Social Responsibility (CSR) had been a trend in the corporate world.
In the mid 1900’s majority of large U.S company was observing CSR; they had CRS activities and
developed a CSR department focusing in its implementation. As time goes by, the world is changing.
Everyone including the business world changes courses of action, behavior, etc.; so as CSR as well, to
adapt the ever changing world. These changes are directly attributable to globalization of the economy
and the growing societal expectations/pressures from the stakeholders – the current global drivers of CSR.
Globalization is the process and effects of widening or stretching affairs of the people around the globe.
This also limits the power of the government to regulate and control these affairs. And this is where CSR
comes in. The companies should or expected to discipline and regulate their own affairs. Growing societal
expectations is also one of the things that drive companies to observe CSR. The pressure from the social
world is bothering the corporate world. They need to adopt CSR in order to answer the demands of the
society regarding to environmental and social interests. Aside from these, what drives company to do
CSR? In general, there are three motivations – instrumental, institutional, and emotional. Institutional
motives refer to the need of the company to do CSR because it is expected from them. Emotional motives
concern to the feeling of right thing to do. And lastly, Instrumental motives are all about the economic
benefit or the pay-off that a CSR can bring to the company.

Many of the companies are practicing CSR in our time. It is expected to them to develop
activities promoting their social responsibilities in the world. But actually many as well failed to
implement CSR in a good manner and some became flop. What are the factors affecting the
operationalization of CSR? These are Consciousness, Capacity, Commitment, and Consensus.
Consciousness is all about raising awareness among the members of the organization and other external
party related. It should be a talk of the company in order CSR to be successful. Capacity, on the other
hand, relates to the effectiveness and efficiency of the implementers to do CSR. It is all about the
resources and its availability to drive the CSR into a success. Commitment talks about the willingness of
the organization to adapt these CSR activities. The active commitment of the employees is important to
make a movement. Consensus, lastly, talks about the willingness of the external parties to be involved in
such activities. Conflicts, difficulties, and challenges may occur due to the conflict of interest from these
people. There is also a level of Corporate Social Responsibility. At the bottom level is the economic
responsibility, of course a CSR must be profitable for the company; next is the legal responsibilities, as an
artificial being, a company must respect the law of the land. The third level is ethical responsibilities; this
is close to the emotions of the members of the organization. They need to do what is right and avoid
harming others. Last is observing philanthropic responsibilities, a company need to improve the quality of
life of its people and the community.

CSR and Leadership

Moment ago, we have discussed what is CSR and its role in the corporate world. In this part, we
are going to relate CSR and leadership. Before anything else, what is leadership? The word has no
concrete definition. It is too subjective to be defined. It may refer different thing for different people. But
to have a single definition, the book define it as, “the word ‘leadership’ can be used to describe the
dynamic process of leadership that anyone , irrespective of who they are , can practice to affect change.”
It a process of changing. This mean leadership is not a formal position of authority but a process to do
change for a better result. Management and leadership are equally important in an organization. Without
an effective leadership and management, problems will emerge and grow without uprooting the source. It
will create more and more problems and eventually grow to become wicked problems.

It is believed that CSR are often wicked problems. CSR is a high demand activity. CSR issues
are often complicated, complex, uneasy, full of riddles, and think all the word synonymous with
problematic. These issues are related to the world’s problem. Some of these are child labor, human rights,
environmental security, health, discrimination, poverty, corruption, climate change, and etc. And of
course, the globalization negative effect should be accounted; the widespread of range and involvement of
the world makes CSR issues broader, bigger, and tougher to address. The complexity and high demand of
addressing these issues should not stop the management in performing CSR activities; this must help
them to be motivated more for the result will be more and better effect to the company. This is why
leadership is needed to uproot these CSR issues and address them correctly.

CSR and leadership are related in a sense that CSR is for the masses. And it should be controlled
and initiated through a leadership of the company. CSR leadership doesn’t need someone who will
impose authority or with good personality or maybe a CEO; but CSR need a human leader who feels
empathy to the current situation of the world and want to address it. He needs to be a vessel of change.
These are the steps in practicing leadership in CSR. One needs not to be a CEO or even a manager to
practice leadership. Practicing leadership should start with asking questions; and then raising awareness,
developing potential solutions, implementing the appropriate solutions, and never ceasing attention and
engagement with the issue.
CSR and Human Resource Management

The Human Resource Management plays a vital role in CSR. The manpower and the resources
the CSR needed are being provided through the HR. It is also important because CSR is more about the
society, the people, and the community more than anything else. It is right that the Human Resource will
take a leading role in the management or implementation of the CSR activities. There are spheres
involved in CSR and Human Resource Management. These are the external professional sphere, internal
cultural sphere, and internal professional sphere. In the internal professional sphere, the concern of the
Human Resource Management is the employees under the organization. Inside the sphere is the incentive
management. It involves the giving credit to the employees for their performance in the company. The
companies also prioritize the health, safety, and welfare of their workers. This is the expected thing of the
company. Of course, employment relations should be developed. This will help to create a good
atmosphere inside the organization and promote friendly environment. Equality among workers should
also be observed. Race, color, and religion should not matter in giving opportunities to the employees
rather loyalty, performance, and attitude must be accounted this will also promote good relations between
the management and its employees. Learning, training, and development are also under the internal
professional sphere of the Human Resource management. The employees must be flexible and ready for
unexpected circumstance. Through training and development this will be possible. It is also helpful in
giving way for the employees for improvement for their wellbeing. This will lead us to the career
progression and success planning. It will promote the employees into better area. The management must
also think for their employees’ career milestone. This will help them in reaching their full potential and
maximizing their efficiency in the company. Other sphere of the human resource management is the
internal cultural sphere. It involves making the core values of the company visible in the organization and
resolve and issues in work attitude. The human resource management must promote the organizational
values. This will set standards on work ethics in the company. What should be done and all. This will
help the company promote its name to the market and corporate world as well. One goal of the CSR is to
address the environmental issues. Helping this implementation, the Human resource management will
promote as well the greening of the business. It will promote environmental action in helping reducing
waste and carbon imprint of the company. This way, it will help the company’s CSR to be possible. Last
is the external professional sphere. The human resource management should not only focus on internal
affairs but also to its related external affairs. They will hold responsible as well in promoting human
rights outside the organization, or to the supply chain. They will also advertise the CSR into these
external bodies to hasten the success of the activities. It should reach out the community through fund
raising activities and outreach programs. The management should promote life of the community.
CSR and Innovation

In the ever changing world and globalization, CSR must improve as well to address these few
issues. This is where innovation will help CSR to be timely. It is said that innovation is a prerequisite for
growth and success in today’s business environment. Innovation is changing the norm. It is making a new
benchmark – improving the standards. Not only the business products, services, process, and model
should innovate but also the CSR. CSR and innovation are hand in hand to address these societal and
environmental issues.

CSR innovation involves complex process. CSR is a complex idea in itself, with the addition of
innovation, this will make it even more complex and difficult to achieve. It considers lots of factors and
issues to be addressed. It is not simply doing CSR but improving its model to meet the demand of the
world. CSR can be innovative to find a new way of solving the current social and environmental
problems. It is like doing something in a much cooler way. It is a more ambitious endeavor. One does not
simply combine CSR and innovation. It deals lots of activities and considerations. CSR innovation can be
done through product, process, and business model innovation. The products specifications and design
can be change to meet the preference of the new customers. These new customers concerns are not
limited only to the usability but also to the effects of it in the environment and society. As a manufacturer,
its job is to redesign and change the standards of its product into a more eco-friendly. Aside from the
product, the process should also be changed to implement a better CSR. The concern of the market is not
only in the product but also in the way of making it. Innovating it to reduced harm in the environment is a
great help in doing CSR. This will promote the program of the company to lessen the carbon imprint or
the negative effects of their production in the community and the environment. Lastly is changing the
business model. Through the social media and news, the company’s affair is not within the bounds of
themselves and the suppliers. It is now extended to the people and consumers. Changing business model
will attract more customers and promote CSR to the masses. Just reaching out to the unfortunate
communities, addressing environmental problem, and social problems by changing the business model is
a great help to the company. Innovation is needed in this changing world. The globalization and
increasing demand from the people are getting bigger and more difficult to handle. This must be seen as
an opportunity, not a threat. This is where the innovation in CSR occurs. The company should adapt,
improvise and cope. This will both benefit the company and the people it wants to be affected.
CSR and Standard Accounting

The CSR is becoming a thing to the corporate world. More and more institutions are adapting it,
from private to government and NGO’s. The problem is that it is not fully integrated into the reporting
system of daily business processes. If the companies are really serious in doing CSR, they need to make it
part of their system. They need to find a way to reflect and show the effects and results of their activities.
There is no really a standard in reporting for CSR followed. There are initiatives to build a standard.
Some are having many requirements which some of the companies make less committed and some with
less that is not considered a quality. Different companies have different CSR. Some CSR are intensive in
some regions because of their big name and more pressures received from the stakeholders; and some are
just mild because of their capacity and the region where it belongs. These different circumstances needs
for different standards. There are different standards in accounting and reporting had been developed.
Every type of CSR has their own standards. CSR evolves so as the social reporting and accounting. Many
companies practicing in making reports on CSR; but some are unaware of the effects (harmful/beneficial)
to the environment because it is hidden in other accounts which are not specified. The use of social
accounting and reporting will help in recognizing and understanding the costs and their impact in society
and in the environment. This will also help to address these costs and later on learn to minimize these to
promote both life and increase of income. Today, national regulations on CSR are becoming a thing, and
many countries make laws in requiring the company in disclosing information regarding to the
environmental and social effects of their activities. This will help the community and the government in
addressing the issues more.

Different tools and manner of reporting CSR activities progresses of the company are being
developed and use by other companies. These will help the both the government and the company. It will
help the government to pinpoint the problems of the costs incurred by the companies that harms the
environment and the society. This will also help the company to promote their CSR to the stakeholders by
disclosing reports as a result of their actions to address these issues. But the challenge here is to set a
standard in reporting and accounting which will make the integration of CSR in company successful.

CSR and Suppliers

Suppliers are the ones who provide the materials an entity needs. Suppliers must follow the
specifications of the entity they are supplying materials. If for example, Company A practices CSR and it
produces notebooks. The supplier of Company A which is Company B must follow and practice the CSR
activities of A. If A wants B to plant a forest to protect the environment then B must follow. The suppliers
of the company must practice CSR as well. They must be in line with the activities of the company. The
way the suppliers obtain there materials must be legal, just and does not harm the environment and the
society as a whole. By outsourcing the production, distribution of the products, it means that moving tasks
to an autonomous organizations in the company’s environment. It would also mean that the company is
in-sourcing some of the corporate social and environmental responsibilities. It is difficult to implement
CSR among the suppliers. But if the small company supplies a bigger company that gives them most of
their income and that bigger company practices CSR, the small company will also practice CSR. It is
because if the small company will not then it may lose income. If the management of CSR among
suppliers failed, then the image of the company might be destroyed from the shareholders point of view
and of the society as a whole. The social and environmental responsibility in the supply chain can
generate benefits and become a key driver for innovation. It has become a common way to manage CSR
in the supply chain, the Codes of Conduct. The suppliers must comply with the Code of Conduct.

CSR and the Consumer

Consumers in CSR’s settings are shareholders. It is because they also hold the company’s life. If
there are no consumers then the company will close. And if there are no sales then shareholders will
eventually pull out their investments. They have two rights which are Unconscionable Conduct and
Consumer Vulnerability. Unconscionable Conduct is unfair contracts wherein it favors the superior
person. Consumer Vulnerability is described by class. A market research must be made about the
responsibility to clients and society for they are the main driver for the success of CSR. The promotion
and advertising must be relevant to the aimed audience. The ethical consumers are not just concerned
about their own purchase decisions but they also aim to purchase products that are in line with their moral
frameworks. They are the ones who put attention about ethics and corporate citizenship. Pricing strategies
are used induce sale. There are six (6) pricing strategies namely Predatory Pricing, Price Discrimination,
Collusion, Price Deception, Bait-and-Switch, and Mark-Up Pricing. Predatory Pricing is a short term
strategy wherein the price of a product is sold below cost to gain consumers. Price Discrimination is
offering different prices for same products. Collusion is having consensus with its competitor for the
prices of the product. Price deception is deceiving the consumer about the price. Bait-and-switch is about
offering them products that are cheap but forcing them to buy the expensive ones. Mark-Up Pricing is
about increasing the price but later on decreasing it by having a sale.

CSR and Shareholders

The shareholders play important role in CSR activities’ success. They have vital roles in
the society especially in economies and business world. Shareholders have the ability to promote
CSR effectively towards to its success. They made CSR possible through giving capital, for an
example. The capital contributions done by these people affect how the company will run.
Shareholders hold responsibilities to manage and to decide on important matters that the
company should address; one of these is doing CSR. Shareholders are provider of capital and
financial need. This will help the CSR funded and move. They are also information providers. As
investors, they must monitor the market standings and activities. They are taking risks and the
more information they had the more chances of better decision making. The company can use
this to stimulate discussion related to CSR. Shareholder as influencers can pressure companies to
engage and adapt CSR into the business. They play major role in decision making and
implementation of policies.

The world is changing and so as the characters of the people. More shareholders or
investors, nowadays, practices responsible investment. They make sure that the capital they gave
will be used in a safe and legal way. This means some of them require the company where they
are involved to engage in social responsibility activities. According to statistics and studies, there
is an increase each year of these people recognizing responsible investment. Aside from
generation return of investment, they want to have a good impact in the environment and in the
society, they want to promote life.

To address the issue between shareholders and social responsibility, two questions are
being answered. (1) Does CSR impact positively the financial performance of the firm and; (2)
Do investments applying responsible principles to perform better than conventional investments?
There are researches and studies tell that CSR and financial performance are directly related. The
increase of the CSR impact leads to an increase of the latter as well. Applying responsible
investment might not be better than conventional investment in terms of return of capital, but for
the principles and doing well promotes the conscience of the shareholders that they are able to
help the environment and promote life as well.
IV. Insight

Corporate Social Responsibility is gaining name in the world of trade and business. At
early times, it was just an option for the company to observe. Now, it becomes a necessity and
every company is expected to adapt CSR in their business.

The globalization of the economy and the growing societal expectations pressures
organizations into doing CSR. This might be a problem for them; but having a business mind, the
companies should not see these as hindrances to their success or threat rather they must see this
as an opportunity to do more and to reach the consumer market, customers, and their
stockholders better. Everyone is updated to what is happening in the world. People can see and
hear news in many ways no like before. People around the globe are concern on the world’s
problem and waiting for someone to do the right thing. This is where CSR comes in. Company
need to do their social responsibility in order to promote their name and as well help the
environment to secure its future.

Globalization increases the trade network and widens the scope of the business of these
companies. Globalization is not only focusing on the world but rather to people as well. The
invention of social media sites and advancement of technology, everyone is connected to one
another just in a snap of the fingers. There is less privacy. This privacy thing doesn’t only
concern the private lives of the ordinary people but the business affairs of the company as well.
Their actions are being monitored. How they perform. How they process. How they
manufacture. How to do anything are being watched. This leads to a more pressure environment
for them. In order to secure their healthy name, they must perform CSR activities.

But the thing, CSR is a complex idea to deal with. It is not just you do charitable act for
one time then your name will be secured for a thousand of years, no. Doing CSR is a lifetime. An
organization doesn’t just observe CSR for a year, they are still being observed by the consumers
and stockholders every time. It is a safe measure that CSR should be practiced as long as the
company does have customers and stockholders.

Many companies observe CSR as part of their concern to tackle. But not everyone is
doing it right. I learned that there are things to keep in mind while doing corporate social
responsibilities. These are Consciousness, Capacity, Commitment, and Consensus. Consciousness is all
about raising awareness among the members of the organization and other external party related. It should
be a talk of the company in order CSR to be successful. Capacity, on the other hand, relates to the
effectiveness and efficiency of the implementers to do CSR. It is all about the resources and its
availability to drive the CSR into a success. Commitment talks about the willingness of the organization
to adapt these CSR activities. The active commitment of the employees is important to make a movement.
Consensus, lastly, talks about the willingness of the external parties to be involved in such activities.

Even the things mentioned above is being observe, a ship will not move without its
captain. CSR needs leadership in order to be successful, in order to move. Good management is
required in implementing CSR. A leader in CSR not needed to be someone with authority or
knowledgeable