Corporate Social Responsibility - What is it all about?!

Corporate social responsibility is an additional business objective to shareholder wealth maximisation and is becoming more predominant in recent years. So, what is corporate social responsibility?

Hopkins (2007) provides this definition of corporate social responsibility:

“CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner. ‘Ethically or responsible’ means treating stakeholders in a manner deemed acceptable in civilized societies. Social includes economic and environmental responsibility. Stakeholders exist both within a firm and outside. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for peoples both within and outside the corporation.”

But are companies being truly CSR focused? Isabel Kelly, a director of Salesforce.com foundation claimed:

“A lot of firms make the mistake that CSR means just writing a big cheque once in a while, or a company boss asking his secretaries to do voluntary work once a year at Christmas"

Socially responsible investment (SRI) by companies lacks consensus globally. Reasons for this include differing cultural norms, along with attitudes and beliefs of individuals. Another key factor is differing expectations as to what is regarded as SRI meaning what one individual might deem an acceptable level may unacceptable to someone else. So, is it possible for people to avoid all companies associated with socially irresponsible projects?

As much as people may disagree with socially irresponsible or unethical business activities, it can sometime be difficult to avoid. For example if an individual is against tobacco produce would it be fair to avoid companies such as Tesco just because one of their product lines is cigarettes?  This makes it hard for individuals to be truly ethical.

Companies on the top end of CSR practices include Waitrose, the Waitrose-John Lewis partnership was rated platinum scoring 95% in the 2011 business in the community corporate responsibility index (John Lewis Partnership, 2011). This clearly demonstrates that companies regard CSR as an important aspect of their company strategy. Another company known for its highly ethical practices is The Body Shop.

An interesting sector to look at in terms of CSR is the higher education sector.

The Department for Trade and Industry defines corporate social responsibility (CSR) as “the integrity with which a company governs itself, fulfils its mission, lives by its values, engages with its stakeholders and measures its impacts and publicly reports on its activities."

It has been suggested that in the competitive environment universities are now faced with CSR could be adopted as a means of obtaining competitive advantage and help companies to remain ahead of the competition (The Guardian, 2011). Richard Goossen, a business consultant, suggested:

“Universities realise that it is a competitive market in terms of creating an ongoing stream of satisfied alumni, attracting new students and addressing the concerns of business supporters, a strategy which incorporates CSR is a start" (The Guardian, 2012).

To finish, an interesting article regarding the top 10 trends in corporate social responsibility came to my attention:

http://www.forbes.com/sites/forbesleadershipforum/2012/01/18/the-top-10-trends-in-csr-for-2012/

In this article, which can be accessed via the above link, Tim Mohin highlights the use of social media as an important tool for communicating CSR projects, suggesting websites such as Facebook are vital in any successful CSR initiative. He also emphasises the issue of collaboration, with CSR being a potential differentiator for companies to compete. This supports the views of Richard Goossen on the universities using CSR to remain ahead of competition as highlighted above.