CSR Corporate Social Responsibility Lifecycle
Interesting topic to start a Tuesday right? Well, it can certainly be controversial as well as gratifying, depending of course if you and your company are doing your part
in respects to Corporate Social Responsibility. So what does it exactly mean, well, according to investopedia.com it means: a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare. The term generally applies to company efforts that go beyond what may be required by regulators or environmental protection groups. Corporate social responsibility may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change.
So now I ask you what are you doing? Or are you telling yourself, we do nothing for corporate social responsibility. Well while I may not be an expert on the subject matter, I do think I know some initial steps you can take in identifying whether or not your company is doing the right thing.
The first step in figuring out how your company is exhibiting Corporate Social Responsibility is taking a look at your materials and or supplies. Examine and identify where these items are coming from. This can apply to a manufacturer and even a contractor. An easy example would be do you have wood coming from the Amazon rain forest where workers are paid one US dollar a day? I know bad example, but you catch my drift. In that example you are certainly not being compliant with what corporate social responsibility stands for. I seemed to have jumped a bit ahead here in my example. Another important aspect to remember is if your raw materials are being sourced in let’s say South Africa is it socially responsible to have them processed in China or Vietnam? The answer is no! As part of Corporate Social Responsibility you should technically have them processed in the land of its origin. Consider the economic impact of that statement, I know business is business but you’d be doing the ethical, social right thing by keeping that work there. Consider that this could possibly change the social class disparity that the world sees. Also, by keeping the processing of the raw material in that country of origin you are also doing the environment a favor.
In summary your homework over the weekend is to really think about how your company is being socially responsible. Is it included in your mission statement or in your corporate objectives? Do you have an actual Corporate Social Responsibility Report that the general public can access? Well, if you don’t take a look at Tiffany, yes the jewelry company, they are one of the best at being corporate socially responsible and they have a comprehensive report as well. Wouldn’t you rather do business with a company like that?
 

One Comment

  1. Whilst I don’t necessarily disagree with the sentiment, I wonder where your ethical perspective is based. The meaning of Corporate Social Responsibility (CSR) that you present is very broad in some respects and specific in others. I think most people would agree that CSR includes respect and preservation of the environment but how is the impact on social welfare qualified? The Open Polytechnic of New Zealand would take the view that CSR should be towards all stakeholders; that is, any being directly effected by the actions of the organisation.
    You mention that CSR should “promote positive social and environmental change” which leads me to believe you are saying that CSR is based in Utilitarianism, focussing on the greatest happiness for all stakeholders, or the consequences of the way in which organisations conduct their business. However, you go on to say that it is not socially responsible to source raw materials in South Africa and have them processed in China/Vietnam. Without completing the necessary analysis, reviewing the available actions, assessing likely consequences, evaluating outcomes to come to the action that produces the most good, I do not believe that the unconditional answer can be no. If the organisation states in its CSR policy that it will improve the standard of living in disadvantaged communities around the world, the choice may meet the policy criteria but cannot be morally right under Utilitarianism without further analysis. Furthermore, if by improving a disadvantaged community or processing raw materials where they are sourced, disadvantages the community in which they were traditionally processed, the benefits to other stakeholders, including the environment, would have to outweigh the disadvantage to the community to meet the greatest good criteria associated with Utilitarianism ethics.
    It would seem that you are not coming from a Kantian ethical perspective as the imperative appears to by hypothetical – “if you want to improve class disparity then you should process materials in their country of origin”. This is clearly not a motive of duty, Scholes (2015, pg. 58) states, “If a person’s action is motivated primarily by… a desire to produce better consequences, the person’s action is not morally praiseworthy. Therefore, is not motivated by Kantian theory.”
    Virtue theory provides an interesting dilemma, the moral goodness of an individual is learned therefore I do not believe this can be attributed to an organisation, regardless of whether the organisation is deemed to have corporate traits or not. You suggest organisations should aspire to demonstrate their CSR behaviour as other organisations do, in this instance Tiffany’s. This suggests that you think organisations can have corporate traits and should act in a manner that a virtuous person, or other virtuous organisations might. However, if the motivation is based in morally virtuous traits, perhaps then the responsibility for CSR sits with the individuals that manage the organisation rather than the organisation itself.
    Looking once more at the assertion that it is not socially responsible to have raw materials processed in a different country. From a utilitarian perspective, the suggestion is that there is greater good bought to the local economy where the raw materials have been sourced. However, this fails to take into account the negative impact on the local economy where the materials may have previously been processed. Furthermore, is there additional value if the processing is done in the local economy of the organisation? Freeman, R.E. (2004, pg. 56) asks the question, “For whose benefit and at whose expense should the firm be managed?” Many laws now exist for the CSR minimum requirements relating to the environment and employee rights; however there remains more individual choice when it comes to other potential stakeholders – suppliers, customers, the local community etc. Without a company policy on CSR identifying specific desired outcomes for these stakeholders the decision remains with the management who may or may not agree or even be qualified to make the decision.
    Where you state “…you’d be doing the ethical, social right thing by keeping that work there.” I do not see the justification of the statement. Friedman suggests that the managers’ social responsibility is to his employer to generate the maximum profit within the laws and social rules of his employment. While even Freeman suggests that social responsibility is to the primary stakeholders with all stakeholder groups being considered as important individually as well as a part of the wider stakeholder group. Whilst from a market failure approach there is no indication that organisations have any responsibility outside of ensuring goods or services are efficiently distributed between suppliers and customers. (Heath, 2006).
    This leads to further questions as to when corporate organisations became responsible for the wellbeing of local economies outside of contributing to their own community. Economic principles tell us that an organisation that is producing goods or service will find the natural price point at which they can be most profitable. If an organisation is operating efficiently and generating profits then they are contributing to the local economy – employment of local community members – and state and country economy – paying taxes. As an investor, my focus would be for the organisation to be achieving the best possible profitability within the constraints of the law. As a customer stakeholder, I would be most concerned with buying the best quality product at the lowest possible price, though I may be swayed by proven ethical policies. While as a vendor stakeholder, I am concerned with selling as much product as possible, at the highest possible price. The social class disparity is surely a concern of the government for any given country. I am not suggesting that the organisation should act immorally to achieve better outcomes for the stakeholders but rather that the class disparity seen worldwide is outside the scope of corporate social responsibility.
    Freeman, R. E. (2004). A stakeholder theory of the modern corporation. In T. L. Beauchamp & N. E. Bowie (Eds.), Ethical theory and business (7th ed., pp. 55–64). Upper Saddle River, NJ: Pearson Education.
    Heath, J. (2006), Business ethics without stakeholders. Business Ethics Quarterly, 16(4), 533–557.
    The Open Polytechnic of New Zealand. (2015). Module Two: Motive of duty. In 71203 Business ethics. Retrieved from https://openpolytechnic.iqualify.com/course/-K0YBLhfBMTzsnwqL783/p58

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