Good Honest Dollar $$

This is the first of a series of articles relating to Corporate Social Responsibility (CSR).

Before we commence discussion in relation to CSR, I think it’s important to clarify exactly what we are talking about.

Many have attempted to define what precisely what the term means. Two examples of common CSR definitions are as follows:

 
• “a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.” (Wikipedia)

 
• “the decision-making and implementation process that guides all company activities in the protection and promotion of international human rights, labor and environmental standards and compliance with legal requirements within its operations and in its relations to the societies and communities where it operates.” (The Bench Marks Foundation of Southern Africa for Corporate Social Responsibility)

I do not feel that there is one best way to define CSR. However, there are, I believe, a number of general observations which we can make about its nature.

 
Characteristics of Corporate Social Responsibility
As stated above, I do not feel that there is a singular, correct way to define CSR.

However, I do feel that we can make a number of general observations about its nature, which I feel can help us to understand the concept more completely.

I believe that CSR encompasses, but is not limited to, the following characteristics:
 

• CSR is a fundamental principle, not a practice or procedure.

CSR is not merely something that a company does. Positive actions and activities are a natural outgrowth from CSR, but the actions and activities do not, in themselves define CSR.

True CSR is a principle. It is a paradigm which helps to guide the decisions and actions at all levels of the company.
 

• CSR involves both internal and external dimensions.

Donating cash or other business resources to external projects is a fundamental aspect of CSR. Better still, that’s the part that generates a positive impact in terms of public relations.

But CSR involves more than mere participation in external projects, considerably more. The more important dimension of CSR is, I believe, the internal dimension.

This involves looking inwardly at an organization’s everyday business practices. It covers areas such as product quality and safety, supplier relations, labor relations, sales and marketing practices, environmental impact, legislative compliance, corporate governance and financial sustainability.

Responsible practices in these areas constitute the more critical aspect of the overall CSR picture.

Donations or involvement in external projects are beneficial, but organizations whose regular business practices are poor cannot be considered to be socially responsible organizations.
 

• CSR means compliance with the law, but does not stop there.

Companies have no mandate to decide what society’s values and expectations should be – governments do. Amongst other things, governments are elected by the people to set minimum standards of behavior from companies. Non-compliance with the law shows disrespect for both the government and the people they represent.

Full compliance with the law is non-negotiable for all socially responsible companies.

But that is only the start. True CSR is about companies acting with a complete sense of effectiveness, fairness, honesty, responsibility and trustworthiness in their approach toward all relevant stakeholders.

 
• CSR involves strong business management

CSR is not separate from business management. Strong business management to produce solid financial returns is an integral part of CSR.

Only companies which are managed to produce solid financial returns, now and in the future, are in a position to fulfill their obligations to stakeholders over the long term.

Financial sustainability is fundamental to CSR. Companies which fail to plan effectively for long term financial viability are not acting in a responsible manner. 

 
• CSR covers the entire spectrum of business operations.

CSR is not separate from any form of business operations. CSR must be deeply ingrained into core business practices across all areas of the company’s operations.

As stated above, this can include, but is not limited to: labor relations, sales and marketing, purchasing, corporate governance, product quality and safety, legislative compliance, environment, community participation, philanthropy and financial sustainability.

True CSR cannot be divorced from everyday business practices.

 Over to you
Can you think of any other aspects to CSR?

Please feel free to join the discussion and share your opinion by clicking on the ‘comments’ section above.