Question

Read the passage carefully and answer the questions: Corporate Social Responsibility (CSR) in Saudi Arabia Corporate Social Responsibility (CSR) has recently assumed strategic significance in the industrial world for companies and government alike. In emerging countries that seek to build vital Economies, CSR has taken on an added value. Increasingly, there is the understanding that national development and CSR are characteristically intertwined. Indeed, it has become clear that nations will not be able to move forward without the purposeful engagement of corporations in societal affairs and their active contribution to capacity building. The underlying reasoning is that the competitive position and the national standing of a country and the well being of its citizens are inextricably linked to environmental, technological and competency challenges. These mounting challenges can only be managed through corporate initiatives in partnership with government. The United Nations Industrial Development Organization has reported that corporations in partnership with governments can make a vital contribution to developing innovative solutions to developmental challenges. Furthermore, in its study, “CSR and Developing Countries,” the UN’s Division for Sustainable Development has argued that governments across the globe have promoted CSR to enhance national competitiveness and to help deliver public-policy goals and priorities. The Arab countries are no exception. Governments in the Arab world have in recent decades espoused certain tenets of CSR. In particular, there has been increasing emphasis on environmental sustainability, water conservation and healthy living. The Arab Forum for Environment and Development (AFED) has underscored the major challenges that Arab countries face. In 2011 report, it concluded that, given mounting challenges, “transitioning to the Green Economy is not only an option for the Arab region; rather it is an obligation to secure a proper path to sustainable development.” The report identified Saudi Arabia as one of the pioneering countries on issues related to urban planning, organic agriculture and water conservation, among others. Saudi Arabia is one of the world’s rapidly rising economic powers. Endowed with natural resources and having strong military and political ties to the West, the kingdom has sought to be responsive to western nations’ economic priorities and prescriptions, while aiming at maintaining traditional political and social systems. Since the early 1970s, the government has espoused comprehensive economic plans aimed at achieving economic and technological progress for its citizens, while integrating its economy into the global market. Earlier plans had sought to increase the rate of growth in its gross domestic product (GDP), develop human resources, and diversify the economy. The most recent plans have focused on encouraging research, development and technological assimilation; promoting scientific activities; strengthening Saudi Arabia’s role in the global economy; enhancing private-sector participation in the development process; expanding basic services offered to citizens; protecting the environment, natural resources and wildlife; and developing and conserving water resources, among other things. These recent plans give priority not only to building capacity (e.g., enhancing the skills of citizens and enabling them to seize economic opportunities and engage in productive activities), but also to strengthening the competitive position of the kingdom, allowing it to gain the flexibility needed for dealing with a changing global economic environment. The kingdom is in a race against time to achieve social cohesion and sound economic development, while trying to tilt regional upheavals to its advantage. CSR is an instrument appropriate to these projects. There are, however, certain challenges that have to be confronted. Some are embedded in the entitlement mentality, which has hardened over the years; others are structural in nature. In its study, The Evolution of CSR in Saudi Arabia, Tamkeen Sustainability Advisors found that corporations in the kingdom have begun to appreciate the value of engaging in responsible business practices rather than just charity. These companies recognize three areas for contributions: employees, community and environment. Most important, the study found that “systematic government incentives and initiatives for social and environmental performance are generally missing. Due to the cultural heritage, there is a general perception, however, both in the business community and the public at large, that social responsibility and welfare is the primary role of government.” In addition to these challenges, there are structural obstacles to integrating CSR into the strategic planning of corporations in the kingdom. These stem primarily from the fact that the majority of Saudi corporations are small and medium-sized firms (SMFs), which neither generate high employment nor include development goals as part of their CSR. In the absence of powerful NGOs, SMFs are not expected to take initiatives to partner with government agencies or institutionalize CSR processes. This may make it difficult, if not impossible, for the government to channel private-sector energy and capacity into fruitful CSR. In a study commissioned by Saudi Arabian General Investment Authority (SAGIA) and the Harvard Kennedy School, it was observed that there are eight global trends in CSR: competitiveness; strategic, competence-led philanthropy; accountability and transparency; new types of public-private partnerships to tackle complex global and national problems; industry-led business coalitions; new models of leadership and cooperation from key emerging markets in Asia, Africa, Latin America and the Middle East; integrating CSR into business schools and university curricula; and the growing role of the media in promoting and articulating CSR. These trends are not only a challenge; they also constitute a blueprint for broader integration of CSR into business and societal affairs. Indeed, this broad perspective represents a departure from the earlier perception of CSR as narrow moral obligations, instituting broader thinking about CSR where strategic dimensions and the necessity to strengthen the corporate role in social affairs and capital formation are considered. Reference: Abbas J. Ali and Abdulrahman Al-Aali, “Corporate Social Responsibility in Saudi Arabia” Middle East Policy, Vol. XIX, No. 4, Winter 2012. Q. 1. Write down the significance of CSR in the Socio-Economic development of a nation. Q. 2. Discuss some challenges of CSR in K.S.A.

Answer 1

1. Answer:

CSR stands for corporate social responsibility. It refers to everything what a corporate/business entity does in order to fulfill its obligations/responsibilities towards the society.

A claim to fame unit is seen as internal fragment of an overall population which takes resources from the outside biological factors present in the general population field to meet its goals. It has appropriately a promise to respond back to the necessities and to fulfill moral commitments towards the more noteworthy bit of which it is itself a segment.

Well being of a nation/society majorly depends upon how well it’s economic and social infrastructure is developed and is functioning. Financial advancement alludes to the improvement of the monetary structure of the general public which involves improvement and well working of business sectors, property right frameworks, exchange and business foundation advancement, improvement of helps to exchange, business and trade, sound and focused market working, quality in money promote headway of capital market, etc. On other hand, social enhancement proposes making and strengthening social substance of the overall population which includes headway and progression of social welfare, esteem and value, sanitation, guidance, upliftment of poor and weaker zones of society, social welfare practices, legitimateness, etc.

It is significant that all the above improvement incorporate enormous speculations for long haul period with exceptional yield. Business substances and corporate are the units which obtain enormous advantages which can be placed assets into the progression employments of the previously mentioned. Next to, corporate have roads and procedures through which such advancement can occur effortlessly. For instance through advancement of social value, a notable competitor brand can test social disgrace identified with casteism and prejudice. All this can happen when corporate spend in CSR.

2) Major challenges of CSR in K.S.A include the following -

a) Systematic government incentives and initiatives for social and environmental performance are generally missing

b) Power of general perception, , both in the business arrange and the all inclusive community all over the place, that social commitment and welfare is the basic employment of government.

c) Auxiliary obstruction which make jumps in contribution of CSR into the key arranging of organizations in the kingdom. These stem in a general sense from the manner in which that the lion's offers of Saudi organizations are close to nothing and medium-sized firms (SMFs), which neither create high neither work nor fuse enhancement destinations as a component of their CSR.

d)  Without amazing NGOs, SMFs are not anticipated that would take activities to band together with government offices or regulate CSR forms. This may make it troublesome, if certainly feasible, for the legislature to channel private-part vitality and limit into productive CSR.