Chapter 2: Corporate social responsibility
Chapter 2: Corporate social responsibility
Corporate social responsibility in a business context
CSR in practise means the business in a managed in a way that ensures its commercial sustainability( profitably while acting in a way that will meet society's expectations of the business by contributing to society and the environment
The King Code talks about the business being a good corporate citizen and that its actions should show that it cares about society and the environment
Some skeptics argue that the business will only pretend to be a responsible citizen as long as it improves the brand image of the business to gain customers and ultimately profits.
An ethical citizen will engage with all relevant stakeholders to ensure the sustainability of society and environment. These stakeholders include(but not limited) to:
CSR is viewed as an umbrella concept that helps the business to understand its stakeholders, and to react to counteract any negative effects on the stakeholders with proactive solutions
The following difficult issues would need to be considered when the business thinks about its stakeholders and how to contribute positively to them:
lack of education
poor health services
Some of the questions the business will need to answer include:
To whom will the business be responsible?
For how long will business be responsible- is it ongoing?
How will this responsibility affect business and its day-to-day running?
Important for businesses to monitor the supply chain/value chain so that the business will be actively aware of any possible negative effect or consequences that its suppliers may have on the environment and society
The business has to put pressure on suppliers to ensure their business activities are sustainable, otherwise the business should look for alternative suppliers
A business that is taking all the necessary precautions to endure sustainable business practices cannot be seen to be dealing with unethical suppliers who do not care about the consequences of their actions
Corporate social responsibility(CSR) is about the relationship between the:
Society(social) and the degree In which the business impacts on society
The business has two levels of responsibility:
Primary stakeholders who are directly affected by the success of the business
Secondary stakeholders who are indirectly affected by the business activities
community, government and environment
Making society sustainable
Important for business to focus on the impact that its activities may have on the community because businesses function better in a strong, happy and stable community.
Business should develop capacity by addressing social issues in the community through programmes aimed at quality education and health care.
CSR and sustainable business practice
CSR programmes should be sustainable where the focus and impact should be long-term for positive change to occur in people's lives.
The criteria to measure whether a business has a focus on sustainability is as follow:
Making operations environmentally sustainable
With greater global awareness and the concern regarding the impact of pollution, depletion of natural resources and destruction of ecosystems increasing, business has to ensure that it acts in a responsible manner.
Look at ways to cut back on wastage as well as ways to ensure non-renewable resources are treated with respect(e.g. Find and utilize alternative energy sources)
Businesses are being held accountable for their environmental practices e.g. introduction of CO2 tax and the use of harmful materials vs recycled materials for packaging
Ensuring ethically sound business decisions that will not have a negative impact on stakeholders and sustainable future of society and environment
Making its own operations socially sustainable
The business takes responsibility for ensuring that important issues in the workplace are addressed , such as BEE/BBBEE; HIV/AIDS and health issues; empowerment/skills development' occupational heath and safety; Trade Union involvement
Respecting the laws of the country in which it operates and in obeying the laws, the business is a responsible citizen in broader society
Most basic level, ensuring it is economically active -producing/ selling goods/services at a profit-so that employees and shareholders benefit
Considering how and what and to whom/what the business will give back;building a brand with values and ensuring these values are practiced internally and externally
the business should not focus on its own profits, but it has a responsibility towards the people and the environment as well.
For the business to create a common understanding of how it plans to meet this responsibility, it has to formulate policies and procedures dealing with the concept of CSR and how their good intentions will translate into practical projects.
Two pioneers in the field of CSR, namely Blowfield and Murray, suggest businesses use a pyramid to measure the level of responsibility
CSR can be described as an ongoing commitment by business to behave in an ethical manner by contributing to the economic and social development of employees and the community at large.