The Marketing Bureau


Specialist Marketing & Communications Resourecs

03

Feb

CSR - Better Business. Better Society.


By Brian H Meredith

First Published in NZ Business March 2014

CSR – Corporate Social Responsibility – is a term first coined many years ago and has become an established three letter acronym in corporate-speak. But what does it mean? Is its’ vital role in business existence and performance fully understood? And is the belief/philosophy of CSR limited only to “Corporates” or is the philosophy relevant to any business of any shape, size or colour?


Different organisations have framed different definitions - although there is considerable common ground between them. My own definition is that CSR is about how companies exist and manage the business processes to produce an overall positive impact on society. Period.

A simple concept but one which, variously, is misunderstood, misused and mistaken for just another potential opportunity to look good.

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”.

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”.

The bottom line is this – no business, however large or small, operates in isolation of the wider community. Every business has its stakeholder groups (e.g. shareholders, staff, families of staff, customers, neighbours, suppliers etc) with the term “stakeholder, in this context at least, meaning any group of people on whom the business impacts or who impact on the business.

In these circumstances, CSR means that a business must work hard to fully understand the needs & wants of each of its stakeholder groups and develop strategies to contribute to fulfilling those needs to the very best of their ability. Shareholder needs are, largely, simple and straightforward but what, for example, are the needs of the families of staff?

One primary need could be a desire for job security and this extends beyond the staff member themselves and impacts equally directly on their family. CSR as a philosophy should require a business to understand and acknowledge this and do all it can to offer/deliver a level of job security or, at the very least to work with staff and families to minimise job security risk.

Another issue could be the impact on the local community or “neighbours” during the construction of a new manufacturing facility. Many business simply ignore the impact that this will have on that community, representing arrogance or naivety (or both!). The philosophy of CSR surely calls for the business to communicate with the community concerning its plans and activities and to work with them to identify issues and seek to address or minimise them.

It often frustrates me that businesses treat their suppliers as lesser human beings. The servant/master philosophy is not uncommon. And yet this stakeholder group can have a significant impact on a business, either positive or negative, and the development of a productive partnership with suppliers (and their own stakeholder groups) is another key component of a CSR philosophy implemented with integrity.

CSR is not a philosophy limited to corporates. Take the “C” off the acronym and apply the concept of “SR” (Social Responsibility) to your own business, however small.

Yes, this may well mean that you are not in a position to develop a SR Strategy that donates significant sums of money to charitable organisations or community initiatives. But it can mean that you can take full advantage of the opportunities to connect with each of your stakeholder groups more effectively and work with them (even if it is just on a one on one basis) to identify ways in which you can help them and they can help you.

For example, it is not uncommon for food retailers to donate unsold product to local charities or for SME employers to meet with staff families from time to time, simply to ensure that they are communicating and building relationships. Other SMEs are sometimes involved with local schools to assist with a whole range of things where they can contribute knowledge, skills or resources of some kind.

There are a gazillion ways in which both major corporates and SMEs (even owner operated businesses) can benefit their business by better understanding and benefiting their stakeholder groups. And this is a powerful and hugely effective marketing strategy that, implemented with ethics, morality and integrity, can contribute to building a better society in which we all can live.

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