Types of Corporate Social Responsibility
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Transcript of Types of Corporate Social Responsibility
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Types of corporate social responsibility
CSR can encompass a wide variety of tactics, from giving nonprot organizations aportion of a company's proceeds, to giving away a product or service to a worthy recipient for
every sale made. Here are a few of the broad categories of social responsibility that businesses
are practicing:
Environment: One primary focus of corporate social responsibility is the environment.usinesses, both large and small, have a large carbon footprint. !ny steps they can ta"e to
reduce those footprints are considered both good for the company and society as a whole.
Philanthropy: usinesses also practice social responsibility by donating to national andlocal charities. #hether it involves giving money or time, businesses have a lot of resources that
can benefit charities and local community programs.
Ethical labor practices: y treating employees fairly and ethically, companies canalso demonstrate their corporate social responsibility. $his is especially true of businesses that
operate in international locations with labor laws that differ from those in the %nited States.
Examples of corporate social responsibility
#hile many companies now practice some form of social responsibility, some are ma"ing it a
core of their operations. en and &erry's, for instance, uses only fair trade ingredients and has
developed a dairy farm sustainability program in its home state of ermont. Starbuc"s has
created its C.!.(.). *ractices guidelines, which are designed to ensure the company sources
sustainably grown and processed coffee by evaluating the economic, social and environmental
aspects of coffee production. $om's Shoes, another notable e+ample of a company with CSR at
its core, donates one pair of shoes to a child in need for every pair a customer purchases.
%nderta"ing socially responsible initiatives is truly a winwin situation. -ot only will your
company appeal to socially conscious consumers and employees, but you'll also ma"e a real
difference in the world. eep in mind that in CSR, transparency and honesty about what you're
doing are paramount to earning the public's trust.
Understanding the Types of CSR
$here are actually two different types of corporate social responsibility to consider. $he first one consists of
corporations providing funding and resources for worthwhile social causes, such as donating money or employee
time to charities. (or many people, this is the definition used when thin"ing about corporate responsibility. However,another type of CSR involves putting together a real plan to produce products or provide services that are in the best
interests of society. $hese include things li"e using safe materials in design and manufacture, corporate
environmental initiatives, and other factors such as /ob creation and economic development.
http://www.businessnewsdaily.com/5491-how-to-start-nonprofit.htmlhttp://www.businessnewsdaily.com/5491-how-to-start-nonprofit.html
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Showing a True Commitment
$he most successful corporate social responsibility programs integrate these two types of CSR together to show a
true commitment to a cause. (or e+ample, a company that uses sustainable materials in their products, donates
financial resources to environmental causes, and allows employees to ta"e paid time off for volunteering at
environmental charities would be showing a true commitment to the environment that goes beyond any single CSR
initiative.
Social Media Visibility
One of the reasons that corporations should have visible CSR campaigns is due to the importance and prevalence of
social media. Corporations that want to protect their brand understand that social media is an integral part of public
perception. #hen a corporation e+ercises social responsibility in the form of fundraising or setting up employee giving
programs, using social media to promote these actions helps to create a positive branding environment and it is a
great way to engage with your audience on a deeper level that goes beyond your products or services.
Public Relations Benets
*ublic relations is a potent tool for shaping consumer perception and building a company0s image. Corporations that
actively promote their social responsibility activities often ta"e steps to publici1e these efforts through the media.
2etting the word out about corporate donations, employee volunteer programs, or other CSR initiatives is a powerful
branding tool that can build publicity for you in both online and print media.
o!ernment Relations
Corporations that place an emphasis on corporate social responsibility typically have an easier e+perience when
dealing with politicians and government regulators. 3n contrast, businesses that present a rec"less disregard for
social responsibility tend to find themselves fending off various in4uiries and probes, often brought on at the
insistence of public service organi1ations. $he more positive the public perception is that a corporation ta"es social
responsibility seriously, the less li"ely it is that activist groups will launch public campaigns and demand government
in4uiries against it.
Building a Positi!e "or#place $n!ironment
(inally, one of the greatest benefits of promoting social responsibility in the wor"place is the positive environment you
build for your employees. #hen employees and management feel they are wor"ing for a company that has a true
conscience, they will li"ely be more enthusiastic and engaged in their /obs. $his can build a sense of community and
teamwor" which brings everyone together and leads to happier, more productive employees.
etting an e%ecti!e CSR program o% the ground isn&t easy' !ll too often, a program is received with
enthusiasm at the beginning and then gets pushed off to the side for other priorities. $his doesn0t have to be the case.
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Attract & Retain Investors
Investors who are pouring money into companies want to know that their funs are
being use properly!
"ot only oes this mean that corporations must have soun business plans anbugets# but it also means that they shoul have a strong sense of corporate social
responsibility!
$hen companies onate money to nonprot organizations an encourage their
employees to volunteer their time# they emonstrate to investors that they on%t
&ust care about prots! Instea# they show that they have an interest in the local
an global community!
Investors are more likely to be attracte to an continue to support companies that
emonstrate a commitment not only to employees an customers# but also to
causes an organizations that impact the lives of others!
Better & More Media Coverage
It oesn%t matter how much your company is oing to save the environment if
noboy knows about it!
'ake sure you%re forming relationships with local meia outlets so they%ll be more
likely to cover the stories you o(er them!
)ow much goo a company can o in the local communities# or even beyon that# is
corporate social responsibility! An the better the benets# the better the meia
coverage!
*n the other han# however# if a corporation participates in prouction or activities
that bring upon negative community impacts# the meia will also pick this up# an
unfortunately# ba news spreas +uicker than goo news!
'eia visibility is only so useful in that it shes a positive light to your organization!
usiness )thics: 5eaning,
Sources and 3mportance
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Meaning:
$he term 6usiness )thics0 refers to the system of moral principles and rules
of the conduct applied to business. usiness being a social organ shall not be
conducted in a way detrimental to the interests of the society and the businesssector itself. )very profession or group frames certain do0s and do not0s for its
members. $he members are given a standard in which they are supposed to
operate. $hese standards are influenced by the prevailing economic and
social situations. $he codes of conduct are periodically reviewed to suit the
changing circumstances.
7efinitions:
8usiness )thics is generally coming to "now what is right or wrong in the
wor" place and doing what is right. $his is in regard to effects of
products9services and in relationship with the sta"e holders. ;Cater
5cnamara
8usiness ethics in short can be defined as the systematic study of ethical
matters pertaining to the business, industry or related activities, institutions
and beliefs. usiness ethics is the systematic handling of values in business
and industry. ;&ohn 7onaldson
$here is no unanimity of opinion as to what constitutes business ethics. $hereare no separate ethics of business but every individual and organ in society
should abide by certain moral orders.
usiness ethics should ta"e into consideration the following factors:
. !ny violation of ethics should be detected at the earliest and remedial
measures ta"en immediately.
?. usiness ethics should be based on broad guidelines of what should be
done and what should be avoided.
@. $he ethics should be based on the perception of what is right.
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Sources of Business Ethic:
3n every society there are three sources of business ethicsReligion, Culture
and Aaw. $he HR manager in every organisation, thus, has to be well versed
with the uni4ue system of values developed by these three sources.
$hese sources are discussed as follows:
1. Religion:
Religion is the oldest source of Religion is the oldest source of ethical
inspiration. $here are more than ethical inspirations.
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3. Law:
$he legal system of any country, guide the human behaviour in the society.
#hatever, ethics the law defines are binding on the society. $he society
e+pects the business to abide by the law. !lthough it is e+pected that every
business should be law abiding, seldom do the businesses adhere to the rules
and regulations. Aaw brea"ing in business is common eg. $a+ evasion,
hoarding, adulteration, poor 4uality high priced products, environment
pollution etc.
Importance of Business Ethics:
1. Correspons to Basic !uman "ees:$he basic need of every human being is that they want to be a part of the
organisation which they can respect and be proud of, because they perceive it
to be ethical. )verybody li"es to be associated with an organisation which the
society respects as a honest and socially responsible organisation. $he HR
managers have to fulfill this basic need of the employees as well as their own
basic need that they want to direct an ethical organisation. $he basic needs of
the employees as well as the managers compel the organi1ations to be
ethically oriented.
2. Crei#ilit$ in the %u#lic:
)thical values of an organisation create credibility in the public eye. *eople
will li"e to buy the product of a company if they believe that the company is
honest and is offering value for money. $he public issues of such companies
are bound to be a success. ecause of this reason only the cola companies
are spending huge sums of money on the advertisements nowadays to
convince the public that their products are safe and free from pesticides of any
"ind.
3. Crei#ilit$ with the Emplo$ees:
#hen employees are convinced of the ethical values of the organisation they
are wor"ing for, they hold the organisation in high esteem. 3t creates common
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goals, values and language. $he HR manager will have credibility with the
employees /ust because the organisation has creditability in the eyes of the
public. *erceived social uprightness and moral values can win the employees
more than any other incentive plans.
&. Better 'ecision Ma(ing:
Respect for ethics will force a management to ta"e various economic, social
and ethical aspects into consideration while ta"ing the decisions. 7ecision
ma"ing will be better if the decisions are in the interest of the public,
employees and company0s own long term good.
). %rofita#ilit$:
eing ethical does not mean not ma"ing any profits. )very organisation has aresponsibility towards itself also i.e., to earn profits. )thical companies are
bound to be successful and more profitable in the long run though in the short
run they can lose money.
*. %rotection of Societ$:
)thics can protect the society in a better way than even the legal system of
the country. #here law fails, ethics always succeed. $he government cannot
regulate all the activities that are harmful to the society. ! HR manager, who is
ethically sound, can reach out to agitated employees, more effectively than
the police.
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'eaning
Acting in an ethical way involves istinguishing between ,right- an ,wrong- an
then making the ,right- choice! It is relatively easy to ientify unethical business
practices! .or example# companies shoul not use chil labour! They shoul not
unlawfully use copyrighte materials an processes! They shoul not engage in
bribery!
#hat are usiness )thicsD 5eaning
)thics is a branch of social science. 3t deals with moral principles and social values. 3t helps us to classify, what is
good and what is badD 3t tells us to do good things and avoid doing bad things.
3mage Credits E 5alc H.
So, ethics separate, good and bad, right and wrong, fair and unfair, moral and immoral and proper and improper
human action. 3n short, ethics means a code of conduct. 3t is li"e the
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7efinition of usiness )thics
!ccording to Andrew Crane,
Fusiness ethics is the study of business situations, activities, and decisions where issues of right and wrong are
addressed.F
!ccording to Raymond C. Baumhart,
F$he ethics of business is the ethics of responsibility. $he business man must promise that he will not harm
"nowingly.F
(eatures of usiness )thics
$he characteristics or features of business ethics are:
Code of conduct : usiness ethics is a code of conduct. 3t tells what to do and what not to do for the welfare of the
society. !ll businessmen must follow this code of conduct.
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Based on moral and social values : usiness ethics is based on moral and social values. 3t contains moral and
social principles Grules for doing business. $his includes selfcontrol, consumer protection and welfare, service to
society, fair treatment to social groups, not to e+ploit others, etc.
Gives protection to social groups : usiness ethics give protection to different social groups such as consumers,
employees, small businessmen, government, shareholders, creditors, etc.
Provides basic framework : usiness ethics provide a basic framewor" for doing business. 3t gives the social
cultural, economic, legal and other limits of business. usiness must be conducted within these limits.
Voluntary : usiness ethics must be voluntary. $he businessmen must accept business ethics on their own. usiness
ethics must be li"e selfdiscipline. 3t must not be enforced by law.
Reuires education and guidance : usinessmen must be given proper education and guidance before introducing
business ethics. $he businessmen must be motivated to use business ethics. $hey must be informed about the
advantages of using business ethics. $rade !ssociations and Chambers of Commerce must also play an active role
in this matter.
Relative !erm : usiness ethics is a relative term. $hat is, it changes from one business to another. 3t also changes
from one country to another. #hat is considered as good in one country may be taboo in another country.
"ew concept : usiness ethics is a newer concept. 3t is strictly followed only in developed countries. 3t is not followed
properly in poor and developing countries.