Corporate Social Responsibility

Definition:
A responsible business is achieving commercial success in ways that honour ethical values and respect people, communities and the natural environment. These businesses minimise any negative environmental and social impacts and maximise the positive ones.

Approaches
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There are several approaches to Corporate Social Responsibility (CSR) The Three-P Approach to CSR: o Level 1: Principles of social responsibility o Level 2: Processes of social responsiveness o Level 3: Products (or Outcomes) as they relate to the firm's societal relationships

3 Steps To Become a Socially Responsible Company

All companies, big and small, are realizing that being socially responsible is not optional; instead, it must be part of their way of doing business. Why? Consumers are no longer passive purchasers of a company s good or services. Instead, they are becoming an informed, and sometimes vociferous, group of buyers who can act en masse, spread information, and have a significant impact on a company s brand and reputation.

So, the question is no longer whether social responsibility is important, but rather how does a company become socially responsible or better at it. There are three steps that companies can follow to start down the path of becoming socially responsible.

1. Know What It Is First, a company must understand the parameters of social responsibility. Companies with good intentions sometimes disappear in definitional quicksand. The terms social responsibility may have a record number of synonyms: corporate responsibility, corporate citizenship, social

enterprise, sustainability, triple-bottom line (financial, environmental and social) and corporate governance. An additional layer of complexity is that the burgeoning field of business ethics overlaps with the domain of social responsibility.

A definitional starting point is that a company should view social responsibility as the way in which they manage the whole range of impacts their organization has on their circles of influence. Thus, social responsibility is a critical component of how a company conducts its business and is embedded in their overall strategy. Circles of influence is somewhat broader than stakeholders; the intent is that the company manages its influences, which can be farreaching.

2. Find an Approach That Works With the basis of understanding the scope of social responsibility, a company must next consider how to approach the matter effectively. Social responsibility must be part of the overall strategy of a firm. Rather than being grafted in response to one-off request, it needs to be part of the strategic planning process. The strategy process begins with careful formulation as to the essence of the company. What does the company aspire to become (its vision)? How will it conduct its business (mission)? With that starting point the company then sets out its short, medium and long-term objectives. Thus, clearly the importance of social responsibility must be embedded in the DNA of the firm.

3. Get People Involved (hint: start with your employees) & Implement To implement a social responsibility program effectively a company must engage employees in the planning process. As with any aspect of effective corporate strategy, it cannot be imposed

from above, but must be an outgrowth of consultation and group collaboration in order to be effective. A company must recognize that employees may have different interests. There are many benefits to properly engaging employees: increased commitment, increased trust, motivation, new ideas, reduced turnover, reduced absenteeism, greater productivity. When conducted properly, and embedded in the culture of the organization, there will be a sense of ownership.

Thought leaders are in agreement that social responsibility must be embedded in the strategy of the firm. Michael Porter, one of the world s leading strategists, views corporate social responsibility (CSR) (he uses this term rather than simply social responsibility ) as a potential competitive advantage. His view is that businesses must shift from a fragmented approach and integrate CSR into the way the company operates. Porter and co-author, Mark Kramer, wrote a seminal article in the Harvard Business Review (December 2006) in which they point out that, CSR can be much more than a cost, a constraint, or a charitable deed it can be a source of opportunity, innovation, and competitive advantage. (80) Porter and Kramer argue that companies need to look for areas of shared value, where they have points of intersection, where there interests align, rather than becoming embroiled in areas of friction. (81) Social responsibility should be viewed as a process of building shared value, rather than an exercise in damage control or a superficial PR exercise.

Building on the parameters of social responsibility and an understanding of its value, a company needs to start implementing a social responsibility program. There are a number of aspects of social responsibility. There is an internal dimension of social responsibility that includes issues such as how staff is treated, such as written policies on non-discrimination and respect for

human rights. There is the dimension of external relations such as restrictions on child labour and engaging in fair trade practices. Another aspect is corporate citizenship such as support for sustainable development initiatives. Social responsibility also involves accountability and reporting to relevant stakeholders in a transparent manner.

With the three steps outlined a company can begin the process of becoming socially responsible. In some instances, the company may have an opportunity to include the dimension of social responsibility in the planning process from the outset. In other instances, companies will have a pre-existing strategy in which some elements of social responsibility will be tested. Either way, companies who put in the effort are realizing that they are not only doing something positive which is valuable in its own right but that they are also building a better company that generally fares better in the marketplace.

What does a sustainable and responsible company look like?

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It is run for and can be seen to be run for the benefit of profit, people and planet. It integrates responsible business practice so that it is built in to business purpose and strategy rather than being a bolt-on to business operations. Employees value it as a great place to work. Customers and suppliers value it as a good business to do business with. The community values it as a great neighbour. Investors and financiers value it as worth investing in. It has a good health and safety record. It has environmentally friendly premises.

Keeping it simple and adding value: 11 simple things you can do today to apply CSR principles to your business

1) Recycle printer and toner cartridges 2) 3) 4) 5) 6) 7) 8) 9) 10) 11)

or use continuous ink systems Buy and use fair trade products tea, coffee, etc Buy materials and from suppliers that use sustainable sources Look at how your staff travel to work walk, drive, bus, cycle etc Ensure Lights, computers and other equipment are switched off when not in use Pay staff, suppliers and creditors on time Turn the heating or air conditioning down a degree Replace lighting with low energy bulbs and turn off at night Print and photocopy only when necessary and double-sided only print the first page of emails Encourage support for local not-for-profit and community based organisations. Set up flexible working

Benefits for your business

The business benefits will vary depending on the business, the specific actions proposed and the effectiveness with which they are implemented. Often, the kinds of business benefits which other smaller companies have reported include:
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Attracting, retaining and developing motivated and committed employees. Winning and retaining consumers and business customers. Improving business reputation and positive publicity. Maintaining and improving their license to operate from the local community. Cost and efficiency savings. Networking and speaking opportunities. Anticipating future legislation and protecting yourself

Areas to focus on:

Policy: Business Principles, Defining your Purpose, Innovation, Know the law, Managing risks, Measuring success, Sharing good practice What are the theories and business principles which drive successful businesses? Here you can dip into information on the law and its implications for your business. There is also information about how to measure the intangibles e.g. how can you measure increased customer loyalty? Plus you'll find useful signposts and pointers as to where you can find more information on each topic. Practice: Better payment, Developing skills, Diversity, Equality, Health and safety, Managing resources, Marketing with a cause, Minimising waste, Volunteering If you want to save money through managing waste more effectively how do you go about it? What about health & safety? In a recent survey* 60% of small and medium sized business owners said that they had been asked about their practices in this area by a large corporate customer. Make sure you're one step ahead of the game and start by reading the guide to health and safety contained within this section.

Stakeholders: Employees, Customers, Suppliers, Communities Stakeholder is an umbrella term, which covers every group of individuals you deal with as a business. Here we focus on four stakeholders- your employees, the community, your customers and your suppliers. By listening and talking to these groups on a regular basis you can really improve your business's reputation and it doesn't cost a fortune.

Corporate Social Responsibility (CSR) or Corporate Responsibility is about managing your business to achieve both commercial and social benefit. In essence it's about managing your social, community and environmental impacts to help you improve results, reduce risks and enhance your reputation. It is also about growing your business in a way that has value for everyone connected to it.

Measuring Success For the majority of SME s and small businesses, it is not about copying what the big companies do, but to use these principles in the way we work. This means treating them as principles, not yet another administrative burden. So measure them no!

Case Studies
IBM IBM - Japan s e-elder initiative is a national program using training materials and other support from IBM Japan which will hire and train seniors as instructors for other seniors in an effort to help elder citizens (expected to make up one-fifth of Japan s population by 2008) more fully participate in a Web-based society. HP In Singapore, HP staff raised nearly $295,000 for charity in 2003 and received a SHARE Gold Award from the Community Chest of Singapore for employee participation exceeding 50%. One event was Gladiathon, a fundraiser in support of the President's Challenge 2003. Leading by example was the Managing Director from HP Asia Pacific, who wore a gladiator costume and competed with other IT industry leaders in the battle for charity. HP was the largest corporate donor of this event, raising a total of $121,000. Microsoft Microsoft works closely with international organizations such as the World Food Programme, Save the Children, and Mercy Corps to provide technology-based development assistance through the HEART (Humanitarian Empowerment and Response through Technology) program. More and more, global organizations rely on technology to improve the effectiveness of their humanitarian efforts around the world.