1. CORPORATE SOCIAL RESPONSIBILTY B S SACHIDANAND

2. Introduction The wants and needs of society are an important contextual consideration Firms must not only produce excellent goods and services, but also concerned with their relationship with society at large as well as with environment Consumers want organisations to act legally and ethically Companies must now be socially responsible

3. What is corporate social responsibility? It is the actions of the company to act in a socially responsible manner to protect and enhance the various stakeholders that have an interest in the company, the community in which it operates, the environment which surrounds it and society Whom the firm is actually serving – the shareholder or a wider range of publics These publics include employees, partners, suppliers, customers, community members, governmental agencies and social activist groups Stakeholder theory serves as a better framework

4. Figure 14.1: Various company stakeholders

5. Figure 14.2: Corporate social responsibility activities

6. Corporate ethicality With the Enron, MCI, Parmalat and Credit Lyonnais scandals, the issue of ethicality has been added to the firm’s requirements Ethics is a set of moral principles or values that shape the actions of either an individual or group of individuals Ethics focuses on moral judgement and not whether it is lawful or not Does the end justify the means or do the means justify the ends? A company must set up a set of ethical guidelines for behaviour for all its employees

7. Corporate philanthropy Corporate giving to charitable organizations Porter & Kramer (2002) suggest that charitable giving can be used to improve an organization's “competitive context” Philanthropy be used to merge social goals and economic goals Cause related marketing involves linking to between corporation and particular charitable cause

8. Environmental / green marketing Actions undertaken by the firm or donations aimed at improving or preserving the environment surrounding the firm This often entails reducing or eliminating corporate pollution Forest Reinhardt, 1998, outlined key strategic considerations when attempting to use environmental product differentiation Will the consumer pay a premium Do the customers have credible information Are there sufficient barriers to imitation

9. Social activism and community involvement The firm in an activist role in attempting to improve the community in which it operates Making the quality of life in society better for all inhabitants (see Fig 14.3) This involves some kind of proactive role

10. Figure 14.3: Varieties of levels and mechanisms for corporate social activism

11. Social activism and community involvement NGOs are activist organizations that work for particular causes When faced with NGO pressure a firm has three strategic choices Pre-emption Capitulation Resistance Social activism, social projects and community involvement are important mechanisms for CSR.

12. Social activism and community involvement Hess et al (2002) examined a number of recent successful corporate initiatives and found that they had three things in common They were connected to the core values of the firm Built upon the core competencies The CSI program undertaken were reviewed and evaluated This represents a shift from seeing only company shareholders to viewing all stakeholders. Companies must measure their CSR initiatives through a social audit Firms must not do it for the sake of doing it, they must be committed to it CSR must be an integral part of their strategic planning process

13. Moving CSR from compliance to strategic imperative CSR is not just giving money to charity, it involves issues as human rights, environmental stewardship, family-friendly work conditions and community development Many managers still seem to be sceptical about the importance of CSR High performing businesses did show a strong correlation between CSR activities and stronger performance in terms of productivity as well as profitability when compared to other firms The key is to make CSR a part of the corporate planning process.