Why Doing Good is not a choice but a Must for Businesses of Today
MBCS, MACS (Prov), MIEEE (USA)
Masters in Project Management (Sp. Business Administration), BSc (Hons) Computing (UK),
CIMA Passed Finalist (UK), PQHRM (SL), Pg. Dip BCS (UK)
( For the CIMA Financial Management Magazine covering syllabus areas of Enterprise Operations in Operational Level )
In the race to be the best looking company in eyes of today’s global consumer, CSR (Corporate Social responsibility) has become a buzz word throughout organizations. It is no longer about one off donation given to some unheard charity. The term CSR has become a more complicated term in the age of climate change, sweatshop scandals, economic recession etc. Also given the magnitude of the investments made by certain organizations on CSR matters (Marks and Spencer, on its journey to achieve the objective of becoming the most sustainable retailer in the world by 2015 investing over 12 Million Dollars in community projects for the 2009/10 time period) it is evident that CSR is not just a buzzword but indeed, a serious corporate matter.
Corporate Social Responsibility is a term encompassing 4 key pillars with regard to the operations of an organisation. It is about,
a) How the company is contributing to the development of local economies
b) How the company is restricting its operations to the given legal boundaries
c) How ethical or morally acceptable the operations of the business are to the society
d) How the company is making philanthropic contributions to society
CSR advocates the importance of organizations being mindful on contributing to the development of economies. Take Bodyshop for an example, an epitome of a good corporate citizen. It is involved in Community trade which is about obtaining the agricultural inputs required for its world renowned cosmetics from poor African villages and rather than exploiting them by giving them a miserly rate, they are given healthy returns without cheating them while building and developing facilities for their villages. These include water wells to give access to pure water, developing schools for them etc.. This is a stark contrast to certain International jewelers which ere accused of obtaining diamonds from Sierra Lionne at very low rates through armed mercenaries (also known as the Blood Diamond trade).
Another major concern of CSR is whether the organisation is carrying out its activities within the stipulated laws relevant in the jurisdictions in which it operates. Consider the recent scandals and frauds carried out by some of the world’s leading financial service providers. For example the Galleon hedge fund scandal in US that was unveiled in 2009 showed a high level of insider trading. This was a clear violation of the U.S. regulations and resulted in its closure costing all its employees their employment, in 2009. Also the recent BP oil spill in its offshore drilling site “Deep Water” shows that many prior warnings have been neglected and sometimes certain employees were even fired from the company for bringing up health and safety concerns. This is a clear violation of employee health and safety regulations which even lead to a massive explosion costing the lives over 10 employees and an enormous oil leak. This caused many problems to several coastal areas no forgetting an over 17 billion $ loss to BP itself.
Another vital element of CSR stresses on the fact that organizations should do what is accepted a right by the society. This may be directly with regard to the organizational activities or even could be something extra but something to which the organisation could contribute or doing so would be seen as something good and an extra effort to be a good corporate citizen. For example, Nike was accused of unethical...