CSR refers to Corporate Social Responsibility and has also been termed ‘Corporate Conscience’ ‘Corporate Citizenship’ and ‘Responsible Business’. Sustainability in business is all about meeting the needs of the present, without compromising the ability of future generations to meet their own needs.
Historically, this has not been achieved by the majority of organisations and there have been strong criticisms against global corporations. Corporations reacted with a style of corporate welfarism that saw companies supplying housing and education to workers and their families. Over the years, this developed into a form of self regulations called CSR. CSR functions within a business to ensure the business conforms to ethical and legal standards and the ‘norms’ of society.
Archie and Carroll (1991) developed a ‘Pyramid of Corporate Social Responsibility’. The base of the pyramid is the economic basis of all businesses, which is to be profitable. The next brick up is the legal compliance that we all need to adhere to in order to ‘play by the rules of the game’. In a smaller brick at the top are the ethical concerns of business. The obligation on all of us to be a good corporate citizen, avoid harm for others and ourselves and work in a way that is just and fair. The crowning block of the pyramid is called ‘Philanthropic’ – that is to be charitable, benevolent, giving and humanitarian.
Closely linked to corporate sustainability, many large organisations employ sustainability departments to manage their sustainability and CSR. Many mining companies have highly sophisticated sustainability departments to address the welfare of the local community and what will be left when the mine ceases operation.
Companies have to consider today not only economic outcomes, but also social and environmental outcomes from their work practises.
There are some difficulties for companies in creating true CSR and sustainability. Organisations prioritise economic value as the key value to attain, where as sustainability places the environment, both social and ecological first. Of course organisations need to be economically viable and budgetary constraints can often impact the amount of CSR activities the company is able to undertake. A better rationale is to try to incorporate CSR into all business functions and make it ‘the way we do business around here’
True sustainability is judged in the long term, where as business outcomes are judged in the short term. Additionally businesses may view CSR activities as simply marketing and PR activities instead of considering the other positive outcomes from such activities.
Unsustainable business models eventually fail (Enron) and take with them a bevvy of other business victims who get caught up in the debris. Not considering your full supply line, can have a major effect on sales such as with Nike in the 1990’s and the links to sweat shop production.
Individuals want to see business as good corporate citizens, we want to believe that business cares for the environment, the community and our social welfare.
No matter how big or small your business, we should all endeavour to incorporate CSR into our daily practises. Want to do something to leave the world a better place, but don’t know where to start? Come along to Australia’s Biggest BUSINESS Morning Tea, one of our CSR activities and that will be a great start! www.circleRHR.com.au/abbmt
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