Corporate Social Responsibility: ” The kiss of death or a moral necessity for business survival ? “
CSR strategies have been exponentially evolving and becoming part of today’s business practices. It seem to be an integral process to engage harmoniously with the ” the big four. ” ( clients, shareholders, team members and community)
Some argue that they are an attempt to “sugar coat” the social and environmental damage created by the company. Others may argue that the programs are a waste of resources and they’re misdirecting managers’ attention from profit to social endeavors.
Are business ethics (standards) leading the way towards social improvements or is the ethical approach (behavior) leading to ethical business practices?
It is important to let you know that I was recently called by an executive as ” Madre Teresa in a suit” hence, clarifies which side of this debate I am positioning myself.
All the best
Edison Reis
www.QualityAssuranceManagement.com
Tags: business survival, corporate social responsibility, ethical approach, social improvements
November 29th, 2008 at 10:11 am
The CSR policies cannot harm the brand, the image or the marketshare of a company. It just launch the company into the new-age marketing that understand that our buyers ( not “targets” but buyers and human above all) expect more from businesses not just an average product. Our clients are hammered on a daily basis with advert messages and they are getting more sophisticated in choosing one products.
The CSR can make the difference. It will show that the company is responsible, that you are ready to give back and invest in the community and that you CARE.
Some two years ago I become Top Philanthropist of the Year in Romania ( http://blog.dotcommerce.ro/2006/11/22/dotcommerce-top-philanthropist-in-romania/ ) and nothing since than made me so happy and content as that award.
I still believe that as top managers we have a Responsibility in front of ourselves, our clients and we cannot ignore this very important subject.
The CSR is not a PR move or a gimmick ..should be strongly embedded into our company philosophy.
So.. keep up the good work and hopefully your actions will make a difference.
Madalin Matica
November 29th, 2008 at 10:13 am
I would like to enter in the discussion making a parallel between the present topic and a largely discussed social phenomenon: the religion which is frequently exposed to the same debate. From one hand as a set of instruments and from the other - as a culture. Briefly some examples.
The history shows us more that once that the choice of official religion is used as a powerful trump by the head of the state in the international political scene.
But certainly the philosophy of the religions is always the leading feature in this choice in the name of the state’s culture (people development) and (we should not forget) the vision that it would build in the eyes of the others.
Thus once the choice is done, the religion become a regulative method, so double-edged in the relation state - nation involving the political (always internal and external) and the pure human point of view.
Of course this is just a parallel and even without enter in details we can found a lot of generic differences. However, the human consciousness acts on his own and so uses the same “lows” (reflects, logic, beliefs..).
Apart from the fact that the levels of the society both company and state affect are different, the comparison seems not so abstract.
Ekaterina Kaleva
November 29th, 2008 at 11:25 am
Edison, I hope you consider it a compliment to be called Mother Theresa in a suit. Your side of the debate is clear. There are many facets to CSR. Why do organizations undertake it? Why not? Most of their spending on CSR is tax deductible, so they are not losing much. Secondly, they gain much good will and publicity. By donating laptops loaded with Windows OS to poor villagers in India, Microsoft is grooming future users of Windows and developers. What better way to create the next generation of developers and users of Windows, so that they do not gravitate towards Linux?
There are other benefits. I was only half-serious when I mentioned the example above. Bill Gates has donated large fortunes to fight disease in Africa and India. I rather think that this is true philanthropy. No need to double guess the intentions of Gates Foundation.
Such philanthropy has other benefits. Not only does it create a positive image of the donor, it can also attract top-level talent. Damage to society and environment will continue anyway, but every extra mosquito net to an African family, every laptop to a poor child can’t be so bad after all!!
Does this make sense?
Ranga
November 29th, 2008 at 11:28 am
Edison -
CSR is critical because it reinforces a key belief all employees (and customers) must hold - that they are connected to a creditable entity. If they do not value their employer then they are not likley to be engaged - draining morale and your payroll - and likely to have one foot out the door.
Leadership and policy determine culture. Leadership shapes it by defining objectives and by mentoring and serving as role-models. Policy supports leadership in these endeavours by defining, communicating, and enforcing performance standards. Unfortunately policy is only as effective as the belief system of the individual. The more compelled an individual is to hold themselves accountable the more closely policy will be followed.
Companies that have a formal program in place to promote the beliefs and behaviors that compel us to hold ourselves accountable can reasonably expect to have their policies (ehtics) followed. I believe this is the most effective way to achieve CSR. Individuals who consistently hold themselves to high performance standards have the greatest awareness for the impact of their actions and for opportunities to empower others.
Corporations that invest in these types of programming receive the added benefit of developing a more engaged workforce and reduced payroll costs. I can provide you with the programming to achieve such results. When participants hold themselves to higher performance standards they make more timely and informed decisions and become significantly more productive in their interactions with others. My program is measurable, achieveable, specific, time-tabled, energizing and especially relevant in this challenging economic environment. Behavior modification is supported and the risk of regression is controlled by an Internet based platform.
Would welcome the opportunity to discuss.
Ray Burchett
November 29th, 2008 at 11:29 am
Hi Edison,
I understand your dilemma. We in quality world continue to strive for improvements and betterment of the world. However, our code of “ethics” may be sometimes different from the one that is used by the people we serve. Thus, it is important to clarify if both sides are on the same page. Otherwisse, it’s an up-hill battle.
Maybe getting some of these people converted to your way of thinking would need to be the first step. I am afraid, though, that this may be a very, very long process (but not impossible!). That’s why (which is good and bad news at the same time) quality professionals have their work cut out for infinity.
Kind regards,
Grazyna
November 30th, 2008 at 8:17 pm
Thanks a lot for your kind comments !
Yes ………I took as a compliment to be called as Mother Tesesa
Interesting you you made a point saying “why not”.(see below) I always believed in being proactive and promoting social efforts but unfortunately my past employers never shared the same vision.
I felt powerless for several years until I launched my own company. Our vision was clear from the get go. ” People before profits and consciousness before growth ”
I would like to share with you what we call the ” why not challenge”
http://www.qualityassurancemanagement.com/charity-challenge.php
Thanks again for your insightful comments and please keep in touch
Cheers,
Edison Reis
http://www.QualityAssuranceManagement.com
November 30th, 2008 at 8:20 pm
Now, this is so interesting.
When I asked the question “why not?” when I was talking about corp responsibility, I had not seen the website of your company. Now that I have seen it, the coincidence amuses me. I have just seen “take the why not charity challenge” on your page. Very interesting. Yes, I am talking it.
Do never feel powerless, especially to do the right thing. I do not depend on Siemens to help the charity organization that I support. But occasionally I do run into a senior manager who is willing and able to help the poor mentally challenged that I support, and offers to help out. And that does it for me. We are not powerless. Let us do our bit and the rest follows. I have motivated lots of friends to donate to the same charity that I support.
At times I think of doing something for Manasa (that is the school in India that I support - yes, I am from India) and keep looking for ways to gather the funds for the project. Almost always, either a donor comes along or some extra money comes my way, and lo and behold, the project is funded. So we are never ever powerless.
I used to be the Quality Manager for Siemens India, mostly driving the processes based on ISO9001 for software. I have since moved on, to Siemens Germany, and now I consult purely on CMMI.
Regards
Ranga
December 5th, 2008 at 5:18 pm
As I get asked this question at every single client, let me offer a very pragmatic (and somewhat cynical) view on this question:
There are only two reasons for a company to engage in CSR:
1. It changes brand recognition among the targeted customer base and is part of a revenue top-line growth strategy
2. It is part of the talent retention program - “we need to do CSR because our top performers will leave if we don’t do it”
Short of those two business reasons, anything else (e.g., “We all have an ethical responsibility to do something”) is at odds with the fundamental purpose of a company which is to generate profits in order to provide income/wealth to its shareholders.
Once you decide to do CSR for one of the two business reasons, then be specific about what makes the most sense for the company in the topic of its CSR commitment.
The major categories of CSR efforts typically are P, E, or F issues:
-Planet / Climate change
-Patriotism
-Poverty alleviation locally or globally
-Public policies or support for specific legislative referendums
-Economic development in the community (local jobs)
-”Feel good” topics like charities for children, animals, arts, healthcare
Whatever category you pick, be clear and exact about how the CSR affects either business reason 1 or 2 above.
Hope that helps.
Ravi,
http://www.raoleadership.com
December 8th, 2008 at 12:26 pm
Follow your heart. If you have the feeling of doing more them capital, don´t let others destroy your motivation.
Rosana Tramontina Zuanetti
December 8th, 2008 at 1:17 pm
Awesome to see this discussion progressing well and allowing everyone to share their point of views.
Thanks for participating and please keep coming back
Edison Reis
http://www.QualityAssuranceManagement.com
December 14th, 2008 at 9:34 am
That would be a case by case basis, I doubt you could generalize on it that one is distinctly dominant over the other. I would be interested to see any hard data on it based on corporate surveys ( I’m sure they’d have to be anonymous, and I’d hate to have to come up with either the survey, or the sample).
I’d also be willing to bet that many programs created out of the former turning into the latter.
I’d say if we even had all businesses utilizing programs that effected social improvements I’d be happy enough, regardless of which came first, the proverbial chicken or egg.
Good question!
Bill
December 31st, 2008 at 2:56 pm
In my experience, a large number CSR strategies emerge in the wake of some apparent lapse in ethical business practices by a company. These strategies tend to emphasize restoring a company’s public image with its target markets and audiences, moreso than advancing any social improvements. Whatever social changes emerge from the CSR strategies tend to be incidental.
Then, there is also a school that sees a strategic business advantage to pursuing high profile CSR strategies (e.g. “green” business practices, targeted philanthropy, etc.) that intersect with niche markets it is interested in penetrating. These initiatives seek to build a positive affinity between the company’s (brand) and the new markets.
I guess there is a third category of businesses pursuing genuine, mission-based CSR strategies without an overarching financial interest. These cases are rare, particularly in challenging economic times when even the first two classes of CSR strategies experience some decline. In this third case, the CSR may be executed under a non-profit subsidiary of the parent company that is operated by its own executive leadership and governed by an independent board of directors. Company CEOs can be very instrumental in the development of this CSR category.
In sum, and more to the point, CSR is emerging as a broad array of strategies that range from self-policing to true altruism. Where any one company falls at any given time depends upon many forces acting both within and upon its core business.
Ernest Perry