11

Overview

1. The notion of social responsibility of corporate organizations

2. Types of corporate social responsibility

3. Real-life case study

References

1. The notion of social responsibility of corporate organizations

With an eye on the environment and social issues, many businesses are no longer solely focused on turning a profit. A top priority for many organizations today is corporate social responsibility, which focuses on how businesses deal with their environmental, social and economic impacts.

Corporate social responsibility (CSR) programs benefit businesses two-fold: they help businesses operate in ways that benefit society and help improve public perception [2].

Different organizations have framed different definitions of CSR- although there is considerable common ground between them. The simplest definition is that CSR is about how companies manage the business processes to produce an overall positive impact on society.

The World Business Council for Sustainable Development in its publication Making Good Business Sense by Lord Holme and Richard Watts, used the following definition.

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large [1].

The CSR definition used by Business for Social Responsibility is:

Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business.

On the other hand, the European Commission hedges its bets with two definitions wrapped into one:

A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

When you review each of these, they broadly agree that the definition now focuses on the impact of how you manage your core business. Some go further than others in prescribing how far companies go beyond managing their own impact into the terrain of acting specifically outside of that focus to make a contribution to the achievement of broader societal goals. It is a key difference, when many business leaders feel that their companies are ill equipped to pursue broaders societal goals, and activists argue that companies have no democratic legitimacy to take such roles [1].

Finding the cheapest price is no longer what always matters most to consumers. Instead, they expect the companies they do business with to operate in a socially responsible manner. A recent study from Cone Communications and Echo Research revealed corporate social responsibility is now a reputational imperative, with more than 90 percent of shoppers worldwide likely to switch to brands that support a good cause, given similar price and quality. Overall, more than 80 percent of those surveyed consider social and environmental issues when deciding where to work, what to buy, where to shop and which products and services to recommend to others.

It's not only consumers who are demanding businesses become stewards of social responsibility. Research from job search siteTheLadders discovered that nearly 90 percent of respondents said working for an environmentally friendly company was important to them.  An additional 72 percent of workers said they would choose a job at an eco-friendly company over another company if given the choice.

Practicing social responsibility also pays off financially for many companies. A study from the University of Iowa found that businesses that make greater investments in corporate social responsibility initiatives see less risk in their stock prices during economic downturns [2].