“It’s not the strongest species that survives, nor the most intelligent, but the most responsive to change”, said Charles Darwin. Business leaders must understand that we are now living in an environment that is ever changing. Cultures are changing and the way of work is changing. The business world is in a never-ending cycle. The macro dynamic legal, technological, social environment are continuously changing. Organizations that are embracing corporate social responsibility have a bright future and those that are not doing anything to embrace noble initiative will be overcome by events or will be obsolete.
Corporate social responsibility (CSR) is a form of management that is defined by the ethical relationship and transparency of a company with its stakeholders. CSR informs establishment of corporate goals that are compatible with the sustainable development of society, preserving environmental and cultural resources for future generations, respecting diversity, and promoting the reduction of social problems. There are many factors that influence this association. This include organizational values, the relationship with stakeholders, the external environment, competitive context, internal resources, the ideologies of top management and community expectations. The competitive advantage that stems from social responsibility can be seen through the direct influence of its resources, creating an improvement in reputation and image, the retention of exceptional people, employee motivation, aggregate value, better economic performance provided by social responsibility aligned with corporate strategy, innovative and efficient projects and better environmental performance.
A business leader must recognize that when their firm is in operation, they produce pollutants that affect the external environment which will lead to negative conflict with the community members, so to avert this uncertainty the organization should engage all relevant stakeholders and discuss the project with them. Issues to consider include greenhouse gas emissions; discharge of effluent or pollutants into water bodies, loss of biodiversity; land degradation, poor business behaviour towards customers, waste management and depletion of natural resources due to its production processes.
PRINCIPLES OF CORPORATE OF CORPORATE SOCIAL RESPONSIBILITY (CSR)
There are three principles of corporate social responsibility and these are explained in detail below:
- Sustainability
- Accountability
- Transparency
Sustainability
Sustainability implies that society must use no more of a resource than can be regenerated. The organization is part of the ecosystem of a wider social and economic system implies that these effects must be considered, not just for the measurement of cost and values created in the present but also for the future of the business. Sustainability should consider the rate at which depletion of resources consumed by the organization in relation to the rate at which resources can regenerated. Business today should aim towards sustainability by increasing efficiency in the way in which resourced are utilized. Sustainability has three aspects of performance namely: economic, social and environmental.
Accountability
This implies a reporting to external stakeholder of the effects of actions taken by the organization and how they are affecting those stakeholders. This acceptance of responsibility is recognition that external stakeholders have the power to affect the way in which the organization runs its operations. They also have a role in deciding whether such actions can be justified. Accountability necessitates the development of appropriate measures of environmental performance and reporting of the actions of the firm. Characteristics of accountability reporting include, engaging all interested parties on their needs and expectations; interested parties’ issues of concern, consistency, reliability and accuracy.
Transparency
Transparency as a principle means that the external impact of the actions of the organization can be ascertained from the organization’s reporting and pertinent facts are not disguised within reporting. Transparency is of particular importance to external users of such information as these users lack the background details and knowledge available to internal users of such information.
Intangible Benefits for business (Corporate Social Responsibility)
- Improved relations with regulators and relevant stakeholders
- Improved morale among workers that can lead to higher productivity
- Enhanced business or brand image which will lead to increased sales
- Better community relations
- Health and safety benefits
- Ease of attracting investors
- General improved image and relationship with stakeholders
It has been seen that Corporate Social Responsibility (CSR) has gained prominence in recent years. It has also changed in nature as different issues have become more prominent. A stakeholder managed organization attempts to consider the diverse and conflicting interests of its stakeholders and balance these interests equitably. The motivation for an organization to engage in stakeholder management are that it improves financial performance, social and ethical performance. To be able to adequately manage stakeholder interests it is necessary to measure the organization’s performance. The main principle behind the concept of corporate social responsibility (CSR) is sustainability. Consequently, most of the activities that are covered by CSR are necessary for the survival of the business. Nowadays, there is an ‘unwritten’ rule that businesses must pass on their success to the world through CSR. Since the advent of CSR, businesses are forthwith judged in terms of their ability to be good corporate citizens. Businesses that find it hard to fulfil their social responsibilities as corporate citizens have trouble marketing themselves to the world. Furthermore, CSR is an essential agenda for both upcoming and existing businesses.
