In the first part of this guide on Corporate Social Responsibility, I have introduced this important concept that is changing the way that companies operate in a variety of different ways. In terms of operations, accountability and practicalities, corporate social responsibility is changing business, and in many cases this is for the better. It means that organisations are proactively working with stakeholders to improve their impact. This is largely a positive change.
The Harvard Kennedy School explains that corporate social responsibility is not just concerned with what organisations do with the profits that they build, but also in how they make those profits. This crosses over into a wide range of different areas such as business relationships, spheres of influence, the supply chain, the community and public policy. Indeed, the Harvard Kennedy School argues that businesses now have more roles to play in society than in the past, and nowhere is this truer than with regard to corporate social responsibility. Companies are more frequently required to be accountable for their actions. While arguably companies used to only have to be responsible to their shareholders now they are expected to be accountable to a whole host of other different stakeholders which might include suppliers, employees, customers, governments, the media, local communities and plenty of others.
In organisations it can be seen that organisational culture influences corporate social responsibility initiatives, and vice versa, corporate social responsibility initiatives may over time also influence organisational culture. Organisations cannot be expected to deal with all of the world’s problems single handed, and there are limits to what can be achieved through corporate social responsibility by companies. For this reason, writing for the Harvard Business Review, Porter and Kramer (2006) explain that organisations have to have some element of focus in what they do with their CSR initiatives. Indeed, they state that: “No business can solve all of society’s problems or bear the cost of doing so. Instead, each company must select issues that intersect with its particular business”.
It is unsurprising then that organisations choose issues that are close to their own hearts to focus on with their corporate social responsibility. At the same time it makes sense that organisations give their products and services where they can to help others who are less fortunate. For example, one of the most respected corporate social responsibility leaders is Microsoft, and it gives software to non-profits that can benefit from free software that would otherwise be very expensive to purchase. When looking at how corporate social responsibility has influenced corporate culture, Microsoft is hailed as a fine example, and it ranks highly in this area. According to Jacquelyn Smith writing for Forbes (2012) the company has had its employees provide more than two million hours of their time to causes, and the passion of the company’s employees for corporate social responsibility can be seen to have grown through doing this. This reinforces the importance of corporate social responsibility within the organisation.
Additionally organisations have been changing on a practical level as a result of corporate social responsibility initiatives. For example, according to PWC as of 2010, 81% of European companies published a corporate social responsibility report. This was up by almost ten percent on the previous year, despite the fact that Europe had been in the depths of an economic recession during that time. North American figures were lower than this, but were also seen to be growing. As well as doing CSR and reporting on CSR, firms are also hiring people to take responsibility for corporate social responsibility and many teams now have corporate social responsibility officers that are accountable for these initiatives as a job role. This shows how corporate social responsibility is no longer something that organisations see as being a nice to have, but rather that it is becoming integrated to a greater depth into companies’ operations all of the time.
In some cases organisations still see corporate social responsibility as being a compliance job that has to be performed. Target figures for carbon footprint reduction and cutting back on emissions have not helped this impression. However, while compliance with legislation may be a part of corporate social responsibility, the latter goes much further than simply meeting the law within the different countries that an organisation operates. It also goes further in many cases than doing the minimum considered acceptable within an industry. Organisations are starting to view corporate social responsibility as necessary to winning customers over and gaining competitive advantage.
Aditional resource: An infographic illustrating the evolution of Corporate Social Responsability and the technological developments of the web.
Paula Newton is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Paula’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Paula has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Paula has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.