Corporate Social Responsibility - Assignment Example

? Corporate Social Responsibility and Section # of BE ABLE TO UNDERSTAND THE PRINCIPLES OF AN ORGANISATIONAL CORPORATE SOCIAL RESPONSIBILITY STRATEGY 1.1. Explain the environmental, social and governance, principles of Corporate Social Responsibility. In the contemporary times, the people of this world have started showing an increased concern towards the way a business operates. The end-product is no longer the only point of focus and determinant of success, but it is the entire process and the operational dealings of the firm producing that product which develops the reputation associated with that product. Hence, in order to incorporate this significant change in attitudes, the concept of Corporate Social Responsibility (CSR) came into existence. This notion entails that a business has to give back to the community in some way in order to show that it is fulfilling its obligation of giving back to the environment and the people in some way at least. In order to define the principle issues under the umbrella of CSR, the United Nations Principles for Responsible Investment (UNPRI) was established in the year 2005, which aimed to provide a working framework which took into consideration the three basic principles, environment, social and governance issues, which are collectively referred to as ‘ESG’, into the investment and ownership endeavors (article13, 2009): Environmental concerns are the most pressing issue in the ESG group, and it is clearly evident by the way the daily news focuses on its significance, such as global warming and pollution etc. For instance, emission of Carbon dioxide and other greenhouse gases by automobiles, manufacturing firms, and farming practices, is environmentally degrading and is therefore a serious threat to the health and life of all people. Therefore, in order to stay clear of environmental activists who have been shown their concern through movements for several decades, there are alternate options for any person to invest in environmentally friendly ways. A primary school can induce the concept of environment protection in the hearts and minds of children by incorporating it in their curriculum, so that they grow to be better and careful investors, as well as intelligent consumers (SRIplanner, 2011). Social concerns basically focus on the issues in which the business affects the society. It is also referred to as ‘social justice’, under it the people, societies and culture are accounted for, they are protected through various social programs such as native lands, predatory lending and other forms of corporate hoarding (SRIplanner, 2011). Governance, or Corporate Governance, is not a widely known concept; however it is of major significance. It refers to the manners and ways in which a corporation is managed, incorporating issues such as transparency, executive compensation and general decision making. Hence, it reflects on how well the firm is including CSR in its policies and abiding by them (SRIplanner, 2011). 1.2. Discuss the links between an organizational Corporate Social Responsibility strategy and the organization’s internal stakeholders. The stakeholders of a business are a crucial determinant of the success of any CSR strategy. The stakeholders of a business can be categorized into two broad categories of internal and external stakeholders. This section focuses on the internal stakeholders and their link with the organization CSR strategy. The internal stakeholders of any business include the shareholders, the visitors and the staff/employees of a business. Their participation in the entire strategy is a key factor for attaining success, for if the key departments or staffs do not understand the program, then they would not support it enthusiastically, therefore an error in communication with internal stakeholders or lack of their involvement can bring down the entire CSR strategy by making it weak from the inside. The offices from which the staff operates should show that the firm is environmentally friendly, the policies related to social endeavors should be hung around the workplace to depict importance, and the CSR efforts should be made public and transparent so that the employees and the people visiting the office can feel that they are connected to a firm that takes up responsibility and accounts for its actions. When the employees feel good about the place they work in, there would be lesser employee turnover and increased job satisfaction, and since motivation leads to increased productivity and growth, it is a positive sign for the business. Similarly, when the shareholders feel that they have invested in a responsible firm, they would be willing to invest more and at times accept even a lower dividend rate; they would be less keen on selling shares in down time and would be willing to stick by the firm for its goodwill. The link between the CSR strategy and the internal stakeholders is crucial, since if a policy is not strong from the inside, it cannot remain steadfast and firm at the outside (Lynch, 2005). 1.3. Discuss the links between an organizational Corporate Social Responsibility strategy and the organization’s external stakeholders. This section focuses on the external category of the stakeholders of any business; it includes the customers, suppliers, Government and the legal system. These are people who are not a member of an organization but can influence and are influences by its actions (Business Dictionary, 2011). Market research is extremely important for buy-in and correct-fit, since it is advantageous to know what the customers require of the business and how they are affected by it. Hence, there is a strong link between the CSR strategy and the external stakeholders, the most important of them are the customers of the business since they are the ones who pay the price for the product being delivered. Furthermore, when the customers feel that they are buying from a product/service from a firm which incorporates CSR strategy into its policies, and then it glorifies the reputation of the business, which can convince the customers to even pay a premium price for the product, stay loyal to the brand in face of competition and spread a good word about the organization. Similarly, the suppliers are also concerned about whom they are providing the material to, especially in recent times, supply of raw materials to an organization which has a bad reputation with regards to the ESG can bring harm to the supplier’s reputation as well. Vice versa is also true, any involvement with badly reputed suppliers can affect an organization drastically, it can render the organization’s CSR strategy useless, they can bring bad name to the organization such as Nike and Adidas were accused for being environmentally unfriendly because they purchased materials from textile factories in China which were involved in unethical dumping of hazardous chemicals in Chinese rivers (Business and Leadership, 2011). 1.4. Assess the impact of an organizational Corporate Social Responsibility strategy on corporate governance. Corporate governance has a wider base than what is usually recognized, it is most basically linked to transparency, disclosure of information and accountability, but there are other crucial aspects as well, such as risk management, board diversity and compensation etc. Organizational CSR strategy can entirely alter the way these decisions are made or policies pertaining to the aforementioned aspects are framed. Initially, these policies were profit maximizing, focusing on ways to reduce costs and just fulfill a legal formality. However, now the pressing CSR obligations have forced corporations to take into account corporate governance more seriously than ever before. Transparency of documents is audited and legal action is taken against any misrepresentation. The ‘whitewashing’ of documents can uproot a business overnight and lead to utter disaster, which happened in the case of ENRON. It has been claimed that corporate governance policies are most of the times enablers of CSR strategies, they make sure that CSR is incorporated in the best manner possible, and the converse is also true, if the company wants to show its transparency and disclose information in a way that is beneficial in this environmentally concerned world of today, they can frame policies according to CSR and make their place. This is how CSR can have a major impact on the corporate governance policies of any organization of the contemporary times (Strandberg, 2005, 14). 2. BE ABLE TO UNDERSTAND THE RESULTS OF AN ORGANISATIONAL CORPORATE SOCIAL RESPONSIBILITY STRATEGY ON ORGANISATIONAL PERFORMANCE 2.1 Explain how a Corporate Social Responsibility strategy for stakeholders can affect organizational performance. Corporate Social Responsibility strategies are very effective in increasing organizational performance. It is basically a firm’s dynamic capabilities which can are one of the key factors in a CSR strategy, the dynamic capability of a firm is its ability to adapt, integrate and restructure its methods to adjust to changes in the organizational environment. When the firm’s dynamic capability is high and it incorporates the expectations of the stakeholders while devising the CSR strategy, then the result would be an indicator of increased organizational performance. Through its use a firm can dramatically increase the legitimacy required by the stakeholders, and also manage to boost efficiency, which would help to improve market position as well as the relation with the stakeholders. Dynamic capability would allow an organization to shape its aims and organizational goals in line with the stakeholder’s demands, which are increasingly CSR related, and therefore carve a good reputation in the market for the company. The adjustment of procedures to meet the demands of stakeholders would shape the CSR strategy for the stakeholders, and thus increased efficiency and legitimacy would require firms to perform better and focus on ESG as well, and since every policy and results would become transparent and publically disclosed, thus the overall commitment of stakeholders would automatically increase the organizational performance and vice versa (David et al., 1997). 2.2 Identify how a Corporate Social Responsibility strategy for product/service safety and quality can affect organizational performance. CSR is not just limited to workspace and people related to an organization, but it extends to include in its dimension the product being delivered or the service being provided, with regards to their safety and quality, which is ensured through the process of Total Quality Management (TQM). The safety and quality assurance process undertaken by an organization is framed according to the CSR policy, thus the strategy aims to incorporate environmental, social and governance concerns when delivering quality. It is ensured that no harm is inflicted upon the environment, and the society is provided back in some way possible to compensate for the resources which were utilized in the product/service of the organization. When the customers are aware of the fact that from the initial stage to the last stage, the organization has gone through a cumbersome process of incorporating CSR in its agenda, then the consumer automatically is willing to pay premium prices. Similarly, the employees associated with the product/service develop a feeling of loyalty and liking for the organization, hence the firm is doing ‘reputation management’ through CSR, which would bring intangible profit in form of goodwill and tangible profits in terms of increased profits etc. In case of a primary school, the teachers would be willing to provide services at lesser pays and deliver a greater quality, which would reduce costs and increase productivity. Similarly, parents would want to pay higher fee for their children’s education and might even donate to the cause of CSR. 2.3 Review the regulatory standards that protect customers/consumers and other competitive organizations. In the contemporary times, it is not necessary that there should be a state government enacted legal regulation that should bind an organization to provide high standard quality product/service, but NGO’s and other environmental organizations, consumer protection agencies such as the ‘ANSI’, and the media, all ensure that an organization is up-to-mark with the requirements of the consumers (ANSI, 2011). Strong regulatory standards on part of the Government protect the customers from any unfair price discrimination, misrepresentation of product facts, and any overstatement of values, the consumers have the right to the sue the producer in case their product does not meet their claim, and it is mostly the heavy fine levied on the producer which prohibits them from undertaking any deceptive measure. Unfair and artificial competition is also prohibited, and condemned by both the consumers and the government and the international law, since it restricts effective competition and reduces consumer surplus (Zerk, 2006, 48). 3. BE ABLE TO IMPLEMENT AND EVALUATE AN ORGANISATIONAL CORPORATE SOCIAL RESPONSIBILITY STRATEGY AT THE OPERATIONAL LEVEL 3.1 Devise a plan to deliver the Corporate Social Responsibility strategy at an operational level. At an operational level, or in other words, day-to-day basis, the primary school can devise its curriculum in a way to increase awareness pertaining to the ESG concerns, furthermore the students should be exposed to the harms inflicted by the non-CSR firms and the movements initiated against them in order to depict concern and induce a healthy living. The students and parents both should be made part of the endeavors for the purpose of CSR, they should be invited to rallies and environmentalist movements. They should be asked to donate for social programs, and the school can introduce programs such as a national outreach program which would provide education opportunity for the unprivileged students for free. The school administration should focus on conservation of paper and energy and rely on recycled materials and promote their use. Renewable energy is expensive but it is safe and healthy, and limits the emission of carbon in the atmosphere, the school can use government grants, donations and charities to generate money for it. Certain days which uplift the purpose of planet earth’s protection should be celebrated on a regular basis, such as ‘Earth Day’ etc. (Addleshaw Goddard, 2011). 3.2 Develop methods to communicate and implement the plan at an operational level. In order for any plan to be successful, it is imperative to initiate effective communication, between the consumer and the producer. An operational plan for induction of CSR in the primary school’s agenda, the most basic stakeholders, that is the parents, teachers, students and the Government should be made part of the plan and they should know so accordingly. The board of directors should hold regular meetings with the staff to ensure that the supply side knows what is being incorporated in their daily plan, they should be kept up-to-date with latest ‘green technologies’ available so that their use could be made. The teachers should shape their daily lecture plans and curriculum to include different CSR concerns in it, such that they are communicated to the students in a regular manner, and students feel a sense of belonging to the project of saving the environment and contributing to the society. Furthermore, regular parent-teacher meetings should be held to communicate the noble ideas to the parents, so that they feel that by educating their children in this school, they are not only securing their future but are also helping protect the earth, and when they feel that they are a part of a bigger noble plan and at the same time making their children healthy future citizens, they are more keen to spread a good word about the school, resulting in informal publicity and marketing. Similarly, the school’s trustees, should be made aware of the program through regular meetings with the board of directors, would be willing to donate generous amounts, as they would be contributing to two good causes simultaneously, education and ESG concerns (Addleshaw Goddard, 2011). Hence, incorporation of all stakeholders is a must for the success of any operational plans, and an effective and two-way communication which requires feedback is a key to success. 3.3 Discuss methods to evaluate the impact of the plan at the operational level and to report the results. The Board should check the daily curriculums and lecture-plans devised by the teachers to ensure that CSR aims are being met and the purpose is being promoted. The teachers should quiz the students regularly and mark their success with regards to awareness about environmental and social concerns. The Government should audit the school in a transparent manner to ensure legitimacy and efficiency in service provision, and when the school is marked with success, they should be given awards or monetary donations etc., to promote regularity in this behavior. The teachers should communicate the ideas to the parents and keep them in touch regularly and invite them to any efforts made for the purpose of CSR, so that they are aware, furthermore, the parents’ attitude towards the program and any contribution, in form of donations or payment of premium fee, would be an indicator of success. The school administration should contact environmental organizations which could measure the success of the school’s earth conservation plans and rate them on a scale; this would be a nominal result to evaluate the impact of the plan being incorporated at an operational level. References Addleshaw Goddard (2011) Primary- Working with Local Schools. Available from [Accessed July 28, 2011] ANSI (2011) Consumer Affairs Overview. Available from [Accessed July 28, 2011] Article13 (2009) UNPRI - more informed decision making through the application of ESG research. Available from [Available July 27, 2011] Business and Leadership (2011) Greenpeace takes on Nike and Adidas over suppliers' toxic discharges. Available from [Accessed July 27, 2011] Business Dictionary (2011) External Stakeholders. Available from [Accessed July 27, 2011] David. JT, Gary. P, and Amy. S (1997) ‘Dynamic capabilities and strategic Management’. Strategic Management Journal, 18, 7, 509-533. Lynch, R. (2005) ‘Communicating Corporate Social Responsibility to Internal Stakeholders’. Available from [Accessed July 27, 2011] SRIplanner (2011) ESG. Available from [Accessed July 27, 2011] Strandberg. C (2005) ‘The Convergence of Corporate Governance and Corporate Social Responsibility’. Available from [Accessed July 27, 2011] Zerk. J A (2006) Multinationals and Corporate Social Responsibility. CSR Vision, Cambridge. Read More