Corporate social responsibility defined
Corporate social responsibility (CSR) is exercised by organizations when they conduct their business in an ethical way, taking account of the social, environmental and economic impact of how they operate, and going beyond compliance. Wood (1991: 695) stated that: ‘The basic idea of corporate social responsibility is that business and society are interwoven rather than distinct entities; therefore, society has certain expectations for appropriate business behaviour and outcomes.’ As Baron (2001: 11) noted, CSR involves ‘providing to others benefits beyond those generated by economic transactions with the firm or required by law’.
McWilliams et al (2006: 1) stated that CSR refers to the actions taken by businesses ‘that further some social good beyond the interests of the firm and that which is required by law’. CSR has also been described by Husted and Salazar (2006: 76) as being concerned with ‘the impact of business behaviour on society’ and by Porter and Kramer (2006: 83) as a process of integrating business and society. The latter argued that to advance CSR: ‘We must root it in a broad understanding of the interrelationship between a corporation and society while at the same time anchoring it in the strategies and activities of specific companies.’
CSR is concerned generally with how companies function and this includes how they manage their people. The CIPD (2003: 5) emphasized that ‘the way a company treats its employees will contribute directly to the picture of a company that is willing to accept its wider responsibilities’.
CSR policy may be expressed in a value statement that sets out the organization’s core values under such headings as:
- care and consideration for people;
- customer service;
But espoused values are pointless unless they become values in use and this needs concerted action by management working with employees and supported by HR.
Strategic CSR defined
Strategic CSR is about deciding initially the degree to which the firm should be involved in social issues and then creating a corporate social agenda – considering what social issues to focus on and to what extent. As Porter and Kramer (2006: 85) observed: ‘It is through strategic CSR that the company will make the greatest social impact and reap the greatest business benefits.’ They also observed that strategy is always about choice – organizations that ‘make the right choices and build focused, proactive and integrated social initiatives in concert with their core strategies will increasingly distance themselves from the pack’ (ibid: 91).
CSR strategy needs to be integrated with the business strategy but it is also closely associated with HR strategy. This is because it is concerned with socially responsible behaviour both outside and within the firm – with society generally and with the internal community. In the latter case this means creating a working environment where personal and employment rights are upheld and HR policies and practices provide for the fair and ethical treatment of employees.
CSR activities as listed by McWilliams et al (2006) include incorporating social characteristics or features into products and manufacturing processes, adopting progressive HRM practices, achieving higher levels of environmental performance through recycling and pollution abatement, and advancing the goals of community organizations. The information set out below was obtained by Business in the Community research.