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Corporate Social Responsibility as part of strategy - Coggle Diagram
Corporate Social Responsibility as part of strategy
CSR is aligned with a range of differing aspects of the life of an organisation
The impact that organisational decisions have on the world and on people
The ethical norms and behaviour that can or cannot be expected from any organisation and then at a deeper level, the behaviours that can be rightly expected from any particular organisation within its own sector and context
The manner in which employees of the organisation are treated
The ethics and ethos that are expected throughout the organisation
Ethics being the behavioural traits that are visible
Ethos being the ethical stance being taken by those who structure and oversee the culture within an organisation
Recognition of CSR by an organisation, in its fundamental form, is a commitment to contribute to economic development from within an ethical framework while seeking to improve the quality of life for its employees and their families, the local community and society at large
This often means the ability of an organisation to link its decision making to a set of ethical values, which complying with legal requirements (health and safety considerations and requirements frequently being a key driver) while maintaining a respect for how, as an organisation it will or may affect the people within its wider stakeholder environment
Since CA2006, the directors of all UK limited companies are required, as a duty, to ensure that their decision-making encompasses this wider environment
Corporate reporting requirements, enhanced in early 2019, require the directors' report in all companies other than those deemed as small under the Act, to demonstrate to their members how they have fulfilled their duties under this section. Not only are directors required to behave with a wider stakeholder and CSR awareness but they are required to explain and illustrate how they have done so
CSR could be perceived as the obligation any organisation has to develop and implement its strategy with a positive awareness of how that strategy is likely to affect society
To achieve this, an organisation needs to have a wide and conscious awareness of the social issues and norms that are affecting society at any point in time. This does not mean that an organisation will only operate from an ethical or moral dimension if it has a heightened sense of CSR.
It is likely that there will also be a competitive advantage to be gained from a perception by stakeholders that the organisation is operating in an ethical manner
The organisation will be seen as a good corporate citizen choosing to do 'the right thing'
Caroll suggests that the following core attributes need to be associated with each responsibility
Economic responsibilities
If an organisation is enabled or allowed to exist, in a formalised manner, within a society, then it has a responsibility to that society in return
Society needs organisations that are profitable; within a democracy this then allows for the levying of taxation to generate funds to be used for the public good
Profits enable the direct reward of owners but also allow reinvestment in the organisation to drive forward both the organisation and the stakeholder society that it is serving
Organisations that are not successful within their projected field of operation will eventually fail and this will have a knock on cost to society
Legal responsibilities
Any organisation needs to operate within the legal framework of the society where it exists
The laws reflect the accumulated operational (and sometimes ethical) principles of society and are there for the greater good and protection of society as a whole
It is important for an organisation to produce products or services that meet at least the minimum legal standards required for the protection of consumers
Ethical responsibilities
An organisation needs to develop its own ethics code - the way in which it expects its employees to behave
There needs to be some concept within an organisation of the moral and ethical norms that are acceptable to society - both generic and specific
An organisation needs to encourage its employees to be good corporate citizens
Philanthropic responsibilities
This takes an organisation above the economic, legal and ethical and into a discretionary area where organisations may want to or may want to be seen to be 'giving back'
There is a fine line here between altruism (an unselfish concern for the welfare of others) and philanthropy (the performing of charitable or beneveolent actions)
There is a risk that the desire within an organisation; or within its leaders; to be seen to be going above and beyond for the greater good of others can both enhance and damage organisational reputation dependent on the views of others
Carroll uses the pyramidal structure to illustrate the gradual building of CSR within an organisation
The starting point is financial stability (going concern, viability) and the requirement is to operate within the law. This can then enable the evolution of ethical and philanthropic practices in the belief that they will enhance the economic good (either tangibly or intangiby) and thus complete the circle
Taking an ethical stance
Every organisation will naturally take a slightly different stance on its approach to CSR
This will be based upon its current and historic culture, the views of the current employees (not always just at the senior level) and the stakeholder expectations (sometimes an organisation needs to be seen to be doing something related to CSR to keep its stakeholders
Johnson et al. (2017)
produced a matrix identifying a range of different CSR approaches with the dynamics that were driving them
Laissez-faire
The organisation just gets on with 'life as normal', focused on driving profitability and shareholder value.
Its CSR approach will be to achieve the minimum required to comply with regulation and expectation
The mode is defensive because the organisation will find reasons to avoid additional expenditure on CSR activities
Enlightened self-interest
The organisation recognises the commercial benefit of taking a positive CSR stance and in building greater sustainability into the supply chain
The mode is reactive because the organisation will be perceived as responding to CSR opportunities
Stakeholder interaction
The organisation recognised the benefit of working closely with its wider stakeholder community and has developed the ability to account for its operation and output from a triple bottom line perspective or its equivalent
The mode is proactive because the organisation will be perceived as leading and opening CSR opportunities
Shaper of society
The organisation and/or its key leadership team are seen as visionaries who have the ability to influence societal change
Such organisations will have an empowered workforce with each member expected to play their part within CSR. The mode is defining because the organisation will establish benchmarks and best practice for others
The auditing of CSR
As will all aspects of organisational life, it is important for directors and others to be able to justify the approach taken to CSR with its inevitable use of stakeholder resources
Increasingly there is a move towards a more holistic approach with all aspects of an organisation's activities being seen as part of its integrated approach and therefore being scrutinised as part of the formal cyclical external and internal processes within the organisation
This attempts to capture the essence of sustainability by measuring the impact of an organisation's activities on the world, this approach predates that of integrated reporting but can be seen to be attempting to achieve the same end result
There is a recognition within the triple bottom line approach of the interdependence of people, the differing elements of society and a range of different aspects that are required for the maintenance and sustenance of human existence
Johnson et al (2017)
suggest that the areas within CSR that need to be reviewed and audited are differentiated into internal and external aspects
Internal
Employee welfare, working conditions, job design, IP
External
Environmental, products, markets and marketing, suppliers, employment, community activty, human rights