Corporate Social Responsibility

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IBM Global Business Services
IBM Institute for Business Value

Attaining sustainable growth through corporate social responsibility

Corporate Social Responsibility

IBM Institute for Business Value
IBM Global Business Services, through the IBM Institute for Business Value, develops fact-based strategic insights for senior executives around critical public and private sector issues. This executive brief is based on an in-depth study by the Institute’s research team. It is part of an ongoing commitment by IBM Global Business Services to provide analysis and viewpoints that help companies realize business value. You may contact the authors or send an e-mail to iibv@us.ibm.com for more information.

Attaining sustainable growth through corporate social responsibility By George Pohle and Jeff Hittner

A growing body of evidence asserts that corporations can do well by doing good. Well-known companies have already proven that they can differentiate their brands and reputations, as well as their products and services, if they take responsibility for the well-being of the societies and environments in which they operate. These companies are practicing Corporate Social Responsibility (CSR) in a manner that generates significant returns to their businesses. Corporate Social Responsibility is the way companies manage their businesses to produce an overall positive impact on society through economic, environmental and social actions.

Introduction
Just as the Internet has triggered lasting change in the structures of industry and the ways in which industries can create value, the ubiquitous connectivity in place today has already caused an enduring shift in the relationship between an enterprise and its customers, employees, and partners. That’s because massive amounts of information – and opinions – about companies, their products and practices, are available in every part of the globe, every minute of every day. And because the Internet is now a place where people congregate to discuss and organize social actions, the balance of power between business and society has shifted toward society and away from business.

So, with this increased visibility of corporate actions, customers’ perceptions of companies and their consequent purchasing behaviors are fundamentally changing. And because that means significant financial impact for businesses, CSR is no longer viewed as just a regulatory or discretionary cost, but an investment that brings financial returns. Our survey of 250 business leaders worldwide found that businesses are wasting no time in interpreting these implications and acting on them: When companies talk about CSR publicly, they tend to describe it in terms of philanthropy. Our survey, however, found that businesses have actually assimilated a much more strategic view; 68 percent are now utilizing CSR as an opportunity and a platform for growth.



Attaining sustainable growth through corporate social responsibility

Based on our conversations with business leaders and our own survey of their actions and expectations, it appears incontrovertibly true that business leaders are starting to see CSR as a sustainable growth strategy. It’s equally true that the more advanced view of CSR demands significant long-term commitment, and definition (or re-definition) of corporate values. It can also require wholesale changes to the ways companies operate. Finally, it will require a finely honed appreciation of customers’ concerns. A potentially alarming finding from our survey is that 76 percent of the business leaders surveyed admitted they don’t understand their customers’ CSR expectations well.

Our analysis led us to three dynamics that companies should understand and act upon in dealing with CSR. These dynamics are: • Impact on business – From cost to growth • Information – From visibility to transparency • Relationships – From containment to engagement. This study will examine each of these dynamics...
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