Corporate Social Responsibility New Trends

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Table of Contents

CSR New trends and focuses that companies are trying to employ
Reasons why companies do not engage in more CSR
Current risks for in-house CSR
Social media reputational risk
Society’s perception of companies linked to revenue
Michael Porter – perceived benefit
How companies propose business plans for internal CSR
Competitive analysis
References

CSR New trends and focuses that companies are trying to employ

Concepts of social responsibility or alternatively corporate citizenship have formed a predominant business lexicon hence attracting the attention of the academicians especially due to advents of the technological advancements of the 21^st century.

Nelson and Jane (2004, p.3) notes that, “over the past decade, however they have grown to encompass a more complex, multidimensional and global set of issues, with strategic implications for both business leaders and policy makers.” The current trends in the CSR, encompasses organizations orientations so as to enhance CSR integration to form part and parcel of corporate strategies.

To achieve these, the corporations attempt to mainstream CSR functions to transform them into fabric of values that remain evenly integrated within the business enterprise of the company.

The trends focus pinpoints on the need to “breakdown the silos, adopting a strategic vision, implementing and operationalization of CSR on a global basis, addressing CSR as a risk management as opposed to one that can be electively be avoided and addressing social risks in the context of total risk management” (Nelson & Jane, 2004 , p.10).

More critically, the modern trends are oriented to solve communication challenges: becoming cognizant of impeccably different communication demands for various stakeholders, and making decisions on appropriate strategies of communication.

Among other crucial changes in the perception of the CSR concept include: self regulation and juggling regulation, solution of legacy issues that jeopardize the trust of future stake holders, strike of balance between the long term and short term business market pressures and “creating new forms of public/private collaboration and partnerships” (Capriotti & Moreno, 2007, p.90).

Consistent with the established demands that require to be fulfilled by the emerging businesses laid on the foundation of the CSR programs, the trends include focusing of CSR on the dimension of being a risk management tool by the potential investors.

They further include the inculcation of social responsibility in the investment of funds of speedily developing the component of mutual benefit fund industry and addressing the interrogative of the governance crisis matters of the corporate CSR fund. Further trends entangles taking into consideration “reinsurers increasingly nervous and vocal concerns about climatic change” (Burke & Logsdon, 1996, p.500).

Consequently, NPF business establishment to aid the CSR programs with the intent to develop green products of an organization has chances of success due to support by various government and international policies of putting into place mechanisms to deal with the problem of environmental degradation.

Reasons why companies do not engage in more CSR

The reason why companies do not engage in CSR activities can be broadly divided into government and financial institution and reasons related to human resources.

Falck and Heblich (2007, p.249) notes that, “the first and greatest barriers to the broader adoption of CSR practices are of an institutional or governmental nature – the lack of an appropriate regulatory framework and the lack of government involvement, followed by a mix of financial and government related barriers.”

In one or other impediments to success of CSR inclusions in the companies’ strategic plans are perceived to result to increased operation costs of an organization, absence of results that are visible from companies’ main business objective: to involve in activities that places it at a more competitive edge through profit generation, and lack of financial linkages.

Barriers related to human resource entangles “lack of staff (middle management) incentives, (followed by current Government policy), cultural differences, employee resistance and management resistance” (Porter & Kramer, 2006, p.81).

In the light of all the corporate fare to incorporate CSR, the main ones include: escalated operating costs, hiked perceived risks, more exertion of stakeholders’ interests, competitive disadvantage, evidence of regulatory authorities interventions, decreased productivity coupled with devastating impacts to the companies’ profits with a consequence of diminished quality levels of company’s product qualities.

Current risks for in-house CSR

Risk associated with the application of CSR or current risks for in-house CSR fall into six categories entangling the issue of compliance, operational, employment market, extrinsic business relationships, reputation and stock markets.

All these risks surrounding implementation of CSR programs need to be impeccably and or closely monitored and controlled if at all CSR initiatives have to be aligned with the corporation strategic plans of operation.

Some of the issues that need to be ardently addressed include “conflicting global laws and regulations that pose potential risks when organizations implement CSR initiative” (Sharma & Talwar, 2005, pp. 35-45).

Omissions, violation of laws governing CSR disclosures, in adequate performance in comparison with the goals and objective of the company have the capacity to cause substantial harm to the company’s reputation or brands.

Other issues included in the spectra of CSR initiatives risks includes failing to give consideration to integration of objectives of CSR into the product , services and manufacturing process and non compliance to the established regulations on CSR.

According to Matten and Moon, “Companies could also lose investors if they don’t qualify for socially responsible investment and reduce their pool of potential employees who don’t want to work for organizations without social and community commitment” (2008, pp. 40-42).

Worse still a company may be in operation under relationships with organizations such as supplier companies, customers, among other business partners who do not pay any concern to CSR principles.

Within a spectrum of stake holders, discontent exist with regard to ‘state of play’ in spite of amicable formulation of initiatives and standards to guide CSR globally. “NGOs and action campaigners want corporations to be legally responsible and accountable for human rights violations and CSR lapses” (Mullerat, 2005, p.40).

Strides made with the aid of advocating green business or sustainability initiatives, various draw backs have been registered especially when addressing social and labor risks attributable to operations of corporations and in general those who are afflicted by them either for good or bad.

Going green can solve some of the challenges. However, this attempt may not be sufficient to ensure substantial company health since ignorance to non-green CSR concerns exposes a company to reputational and financial risks. As Fombrun, Gardberg and Barnett notes, “This is definitely a case where going green can leave you in the red – management might suffer thinner coffers and embarrassment from a CSR oversight” (2000, p.101).

Adequate capacity that ensure support, provide counseling and legal advice services so as to implement and sustain effectively CSR programs to companies while not disregarding stake holders that are sought to be protected so as to maintain social reputation of the organization.

Society’s perception of companies linked to revenue

Focusing on profit is agreed upon by many economists to amount to paramount businesses’ indulgencies. This is necessary for the success of any company. Nevertheless, how does the society perceive such companies? According to Luo and Bhattacharya the word profit serves “to project images of greed, exploited workers, and rich capitalists” (2006, p.14).

In the eyes of the consumers: who comprise what the company may term, as the target group for its products, have never welcomed the term profit with good regards (Trevino, & Nelson, 2007, p.23). The society in most situations tends to focus mainly on cash profits as opposed on accompanying value it receives. To many members of the society, profit is attained at an expense of somebody else’s welfare.

“Reducing company profits by contributing more to community organizations is frequently applauded by the public but however, company contributions almost always are made with some hope of a return or benefit to the company” (Carroll, 1991, p.43).

Consequently, companies have come to the realization that to attain long term success, they ought to adjust their social corporate behavior enormously to levels that are coherent with societal anticipations in terms of norms and values.

Increased corporate concerns in social interest alongside with the media in CSR Has got also the capacity to foster companies to embark on practices that help to cover their negative image before the eyes of the society.

Michael Porter – perceived benefit

Over a long time, capitalism ideologies had been deemed as a major causative of success of profit making organization since they are anchored on the need to maximize profits. Porter and Kramer believe “companies have been perceived to be prospering on behalf of the wider community” (Porter & Kramer, 2011, p.3).

Companies, on realizing the magnitude of blame they receive in contributing to societal failure, have embarked on methodologies of correcting the existing gap through deployment of value sharing tactics.

With reference to Porter and Kramer’s work, companies deserve to extend their efforts beyond tradeoffs and create shared value between them and the society through “re-conceiving products and markets, redefining productivity in the value chain, and building supportive industry clusters at company’s locations” (2011, p.7).

He further suggests that not all profits are equal where by profit that entails social purposes integrated within it depicts a greater form of capitalism that has the capacity to create community prosperity and company’s positive cycles.

How companies propose business plans for internal CSR

There is no specific plan for internal CSR for adoption universally by every corporate. “Each firm has unique characteristics and circumstances that will affect how it views its social responsibilities; and each will vary in its awareness of CSR issues and how much work it has already done towards implementing a CSR approach” (McWilliams, Siegel & Wright, 2006, p.13).

Proposed Plans streams widely from the corporate existing knowledge in certain other fields for example environmental management and quality control and assurance.

With reference to, the work of Dicken (2006), “The framework follows the familiar “plan, do, check and improve” model that underlies such well-known initiatives as those of the International Organization for Standardization in the areas of quality and environmental management systems” (p.73).

Plans are engineered to be flexible since any viable CSR implementation framework demand to have components of social, economic and environmental decisions, as the need to go green is critical. The decision making task is planned by many companies to stem from the board of directors to officials of the organization and finally to the contracted partners charged with supplies tasks.

This is perceived as necessary since CSR program need be agreeable and coherent with all organizations stakeholders. As Ira and Jane (2003) lament, “A properly governed firm can reap optimal benefits for itself and its shareholders and in turn for those who are affected by the firm’s activities” (p.41).

The plan contains six essential elements, which depending on the complexity level of an organization; some may be skipped while their implementation has already been begun. the plans entails conducting corporate social responsibility assessments, developing CSR strategies, developing commitments to CSR, commitment implementations, verifications and reporting the progress of the plans and finally evaluation so as to provide room for improvements where necessary.

Competitive analysis

CSR is a diverse field. In the private sector, within an organization CSR departments are placed within anything ranging from compliance, legal or public relations. In the public sector, USAID, UN, international labor organizations have all endorsed CSR career options.

On the other hand, in the non-profit sector, “There are a wide variety of NGO’s, industry associations, think tanks, and academic institutions engaging in learning and/or advocacy within the CSR arena” (David, 2004, p.57). Social responsibility business groups and Harvard business schools for social enterprise do specialize in this arena.

However, important element that ensures thriving in any business venture, whether profit oriented or non-profit making is the products differentiation. Therefore, the presented idea is viable in a free competitive environment inasmuch as the products remain well thought of clearly distinguished from what is on offer by charitable organizations.

References

Burke, L., & Logsdon, J., 1996. How corporate social responsibility pays off. Long Range Planning, 29(4), pp 495-502.

Capriotti, P., & Moreno, A., 2007. Corporate Citizenship and public relations: The importance and interactivity of social responsibility issues on corporate websites. Public Relations Review, 33(7), pp. 84-91.

Carroll, A., 1991.The pyramid of corporate social responsibility: Toward and moral management of organizational stakeholders. Business Horizon, 34(3), pp. 39-48.

David, B., 2004. How to Change the World: Social Entrepreneurs and the Power of New Ideas. Oxford: Oxford University Press.

Dicken, P., 2006. Global shift Reshaping the Global Economic Map in the 21st Century, London: Sage.

Falck, O., & Heblich, S., 2007. Corporate social responsibility: Doing well by doing good. Business Horizons, 50 (1), pp. 247-254.

Fombrun, C., Gardberg, N., & Barnett, M., 2000. Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk. Business and Society Review, 105(1), pp 85-106.

Ira, A., & Jane, N., 2003. Profits with Principles: Seven Strategies for Delivering Value with Values. New York: Currency Publishers.

Luo, X., & Bhattacharya, C., 2006. Corporate social responsibility, Customer satisfaction, and Market value. Journal of Marketing, 70 (4), pp. 1-18.

Matten, D., & Moon, J., 2008. ‘Implicit’ and ‘explicit ’CSR: A Conceptual Framework for a Comparative Understanding of Corporate Social Responsibility’. Academy of Management Review, 33(2), pp 40–42.

McWilliams, A., Siegel, D., & Wright, P., 2006.Corporate social responsibility: strategic implications. Journal of Management Studies, 43(1), pp. 1–18.

Mullerat, R., 2005. Corporate Social Responsibility: The Corporate Governance of the 21st Century. Kluwer Law International: The Hague.

Nelson, A. & Jane, T., 2004. Leadership, Accountability, and Partnership: Critical Trends and Issues in Corporate Social Responsibility. Report of CSR Initiative: Corporate Social Responsibility Initiative, Report no.1. Cambridge, MA: John F. Kennedy School of Government, Harvard University.

Porter, M., & Kramer, M., 2011. Creating Shared Value: How To Reinvent Capitalism-and Unleash A Wave of Innovation and Growth. Harvard Business Review. Web.

Porter, M., & Kramer, M., 2006. Strategy and Society: The link between competitive advantage and Corporate Social Responsibility. Harvard Business Review (HBR) Spotlight, 53 (5), pp 76-94.

Sharma, A., & Talwar, B., 2005. Corporate social responsibility: modern vis-à-vis Vedic approach. Measuring Business Excellence, 9(1), 35-45.

Trevino, L., & Nelson, K., 2007. Managing Business Ethics: Straight talk about how to do it Right. New York: John Wiley & Sons.

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