a) Corporate Social Responsibility refers to the obligation of
organisational management to make decisions and take actions that
will enhance the welfare and interests of society as well as the
organisation.I.e. responsibility is no longer limited to economic
and legal domains.
Firms engage in socially attractive activities because:
- A commercial benefit of having CSR related strategies that the
company will often have broader discretion and may get control over
markets, resources and individuals at lower costs.
- A corporation's brand and reputation improves by having, which
is essential for maintaining customers', investors', and generally
society's trust and confidence in the entity.
- CSR improves public image and good will
- CSR prevents criticisms.
- CSR prevents government regulation.
- CSR is good for profits and shareholders.
- CSR results in self enlightenment as the organization feels
that it has done something good and valuable for the society and it
should continue to undertake such initiatives in future.
b) Corporate Social Responsibility (CSR) is defined in ISO 26000
as the responsibility of an organization for the impacts of its
decisions and activities caused in society and the environment
through transparent and ethical behaviour.
Some Important Standards are:
- Global Reporting Initiative (GRI) is an independent institution
established in 1999 with the mission to provide a reliable and
credible framework for preparing sustainability reports that can be
used by organizations regardless of size, sector or location. The
guidelines issued are the international standards that are to be
followed to prepare sustainable reports.
- ISO 26000 is developed by ISO and guides the organization's on
how to implement CSR.
- Standard SA 8000 is a voluntary management standard developed
by SAI (Social Accountability International) of the United Nations,
published in 1997 on working conditions and an independent control
system for the ethical production of goods and services as well as
suitable working conditions.
- AA1000 standard focusses on Accountability with the goal of
integrating management, auditing and communication CSR
aspects.
c) The Business Case for CSR
It does not claim that CSR is the right thing to do, but that it
is to the company's advantage to adopt CSR "being socially
responsible is good business"
The Market for Virtue (business case)
If CSR is profitable, then the profit opportunities in CSR
should be sufficient to induce managers to lead socially
responsible companies. The demand for CSR comes from customers,
employees, investors, and other groups that are willing to express
their desire for CSR in the market place (pay more for products
made responsibly).
Socially Responsible Investment "SRI" (Business case)
Through their actions, investors are registering their concerns
about the social impact of business by engaging in SRI (screening
their investments and removing objectionable ones)
Investor Advocacy (business case)
It refers to where SRI funds use their position as shareholders
to pressure companies' management and seek change through
shareholder resolutions.
d) Criticism of CSR
Some people criticizes CSR on following ground :
- Business is responsible to shareholders, not society
- Social programs are the responsibility of governments.
- Business lacks training in social issues.
- Involvement in social matters can lead to increased cost and
failure of the business..
- It becomes costly for small business to implement CSR as
compared to big organizations.
- Due to lack of skill and competence: professionally qualified
managers may not have the aptitude to solve the social
problems.
- Sometimes the organization's adjusts the cost of CSR activities
in the form of high price to consumers and low wages to
workers.