Corporate Social Responsibility

Corporate Social Responsibility

By Taga Ibaan Ako

The term "CSR" came in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those on whom an organization's activities have an impact, was used to describe corporate owners beyond shareholders as a result of an influential book by R Freeman in 1984.

The basic premise is that business organizations have responsibility to various groups in society (the internal and external stakeholders) and not just the owners/ shareholders.

Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible businessSRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. (

Corporate social responsibility may come across as a highly idealistic endeavor but it actually produces highly favorable and observable results. Recent research studies reveal that companies that are perceived by the public to adopt more socially responsible business practices and ethics are more likely to perform financially better than those companies who don’t.

Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: people, planet, profit.

Corporations who are socially responsible benefit by increasing their business dealings and potential plus their good standing and the prestige that responsible brings. In the long haul they get their initial investments back plus earning capital, prestige in the marketplace, environmental advantages and not least, by becoming worldwide leaders.

From a small one or two person operation their business grew one by one into a giant conglomeration that benefit's the world. This does not happen carelessly; social responsibility must be there from the first and must continue throughout. When this is lost and the only valid reason for the business is to make money at all costs, then the company fails.

The belief that corporate responsibility "pays" is a seductive one: Who would not want to live in a world in which corporate virtue is rewarded and corporate irresponsibility punished? Unfortunately, the evidence for these rewards and punishment is rather weak. There is a "'market for virtue," but it is a very limited one. Nor is it growing.

One can certainly find examples of firms with superior CSR performance that have done well, as well as firms with poor CSR reputations that have performed poorly. But of course, there are still at least as many examples of firms with good CSR records that have not done well and firms with poor CSR reputations that rewarded their shareholders.

Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors), and communities in the areas where the corporation operates its facilities, regulators, academics, and the media.

Many companies realizing the importance of CSR activities are indulging in CSR activities, not just as a side function, but have tried to make it an integral part of their business strategy and marketing campaigns. The companies have already taken up CSR initiatives on a large scale and have scaled substantial heights.

(Sources: Gwendolyn Cuizon, , Effie Moore Salem, David Vogel, , http://images.search.yahoo.com)

.