Subject background Unit 6

This unit deals with the topic of what is commonly referred to as Corporate Social

Responsibility (CSR). This is an expression used to describe two related features of

business practice.

1 A company's obligation to be sensitive to the needs of all of its stakeholders (so not

just shareholders, but also employees, customers, suppliers, community organizations,

subsidiaries, local neighborhoods, etc.).

2 The principle of 'sustainable development', which says that businesses should make

decisions based not only on financial / economic factors, but also on the social and

environmental consequences of their activities.

So CSR covers:

• business and the environment (reporting and regulation of waste, sustainable production,

recycling)

• people in the workplace (equal opportunities, encouraging employee involvement,

promoting diversity, health and safety, labour standards, family-friendly policies)

• community affairs (developing programmes for effective engagement with local

communities)

• reputation management (using good practice as part o f the marketing message of the

company, as well as PR w hen things go wrong).

There is a lot o f activity in the field of CSR.

• There are many university courses devoted to the subject.

It is clear that CSR has become an established and important area in the business world.

Indeed, good practice in CSR is now a key part of many companies' marketing strategy.

Businesses stress their green and community credentials in their advertisements, and most

annual reports these days w ould be incomplete w ithout the CEO making reference to their

company's beneficial effects on society and the environment.

But not everyone is happy with the idea that business has a role to play in CSR. Some people

would argue that this is the proper responsibility o f government, not business. Where are

the limits? Consider these areas:

• human rights

• fair trade

• sustainable consumption.

These areas are on the borderline between social policy (the responsibility of government)

and business policy.

In general, companies are usually happy to comply with social and environmental legislation.

But they w ant to see a 'level playing field' with other companies also having to comply.

Acting alone, a business has few guidelines on how to proceed (it is not their job to set social

policy) and by raising standards they run the risk of increasing costs (and thereby losing

profitability, causing layoffs, etc.).

A few companies are happy to take the lead and be pioneers in this field. The Body Shop is

perhaps the best-known example, but BP is at the forefront o f developing green energy and

Marks & Spencer is famous for its diversity, employee involvement and CSR policies generally.

Date: 2015-01-29; view: 1137