Corporate Social Responsibility (CSR): Going Back to Basics

The term Corporate Social Responsibility (CSR) has been a buzz phrase people have been using for some time now. But the irony of this is when you asked for a more clear cut explanation if their organization is involved in it or advocating it, or at the least, if they are aware of what it really represents, more often than not, they will give you back “the stare”.

If at all you get a response, it will be limited to “our company signed up an agreement with organization so and so involving the housing projects for the less fortunate”, or “we are doing a feeding program for the orphans”, to “we are sponsoring some programs for the reintegration of former detainees to mainstream society, or rehabilitation program for drug dependents, to sponsoring a livelihood programs”, etc.

For this issue, we have compiled some information in an attempt to laymanize this concept.

Defining the Phrase

Corporate Social Responsibility or CSR is a phrase used to describe the responsibility of the organizations to acknowledge and act on any the possible impacts of their decisions to the society and the environment through their business activities and social investments.

Motivation Behind the CSRs

Most if not all business exist primarily of this truth: to earn profit. With the emergence of CSR, this concept has brought a new dimension to the companies’ reasons for being. It is the “value added” to the business, not just maintaining operations for the sake of profit.

1. Improvement of the company’s public image and relationship with consumers.  When companies support causes that have a greater impact on society like volunteerism, donations especially in calamity, this eventually creates a “caring” image for them.
2. Media exposure. The better impact the CSR of a company makes with the community, the bigger coverage it gets.
3. Better employee participation. Employee satisfaction is not limited to what they get from their job. Employees also feel good if their company has a good public image and has constant media coverage for positive reasons.  CSR helps in attracting and retaining productive employees.
4. Investor support. Investors are more likely to patronize and continue to support companies that exhibit a commitment not only to their employees and customers but also to worthwhile causes and programs that influences the lives of others.

Maximizing the CSR in an Organization

Based on research, we summarized five interrelated principles that form a new norm for how corporations can maximize their investments in CSR.

1. Business-based social purpose:  An innovative CSR initiative can reinforce the company’s business purpose and provide leverage to its operational competencies.  These programs reflect what the business is and what it does.
2. Clear theory of change: CSR is becoming universal, adding to a company’s business value.  To create “ownership” or leadership in the field, organizations should strive to develop their own approaches to drive measurable social change.  For example, 3M Canada’s Healthy Communities program.  It was designed to trigger universal change in the interrelated areas of education, health and the environment by influencing government and academic leaders, and engage young people through national partnerships with leading not-for-profit organizations.  The said program was recently awarded with the prestigious 3M Global Marketing Excellence Award.
3. Quality and reliability of information:   Leadership comes from providing employees, customers and external stakeholders with reliable information about the social issue through credible research, white papers, videos, stories, social media, and so on. IBM through their Smarter Planet program is a best practice in this area. The program provided support to the World Community Grid project which aims to develop new solutions to important medical and sustainability issues.  Scientists were provided with unused PC computing power, supplied by volunteers, to enable them to conduct better and faster research.
4. Focus:  Though multitasking is gaining popularity, we cannot deny the fact that it is better to be a master of one than a master of none.  Our brains are wired to be more effective when it addressed one objective at a time.  More often, companies that support multiple social issues are the same, spreading themselves thinly because of lack of focus. Leadership is shown by corporations that focus their efforts on one social issue and align all their internal and external resources to it.  An example of this organization is Procter & Gamble with their effort on helping children in need around the world. Since 2007, they have improved the lives of more than 210 million children through initiatives such as Protecting Futures, which helps vulnerable girls stay in school, and Hope Schools, which increases access to education in rural areas of China.
5. Synergy: Leadership is all about influence. It is all about creating synergy with the best in the field.  When Starbucks hosted a “Cup Summit” at the Massachusetts Institute of Technology, they brought together municipalities, raw materials suppliers, cup manufacturers, retail and beverage businesses, recyclers, non-government organizations and academic experts to share ideas for making paper and plastic cups more broadly recyclable.   The affair provided a venue to create an important change not only in the company’s own operations but in the entire food packaging and recycling industries.  

Corporate Social Responsibility (CSR) has indeed come a long way.  More organizations have already integrated this program as part of their business operations.  They have realized that the more that they give back to the community, the more the community – both internal and external — give back to them also. As Stephen Covey said, “you cannot give what you do not have”.  CSR is business with a bigger purpose – it is being its brother’s keeper.