The Concept Of Corporate Social Responsibility Csr


The concept of Corporate Social Responsibility (CSR) has been integrated in a significant number of private companies across the globe. To be able to fully comprehend the role of CSR in both the corporations and society as well gauge its effectiveness in addressing social issues, CSR must first be appropriately defined. CSR as stated by Mintzberg is the corporation's undertaking specific actions that will serve the society beyond greed and selfish acts while another definition refers to the concept wherein companies apply social and environmental aspects in their business operations as well as in their interaction with stakeholders. Mintzberg describes several concepts of CSR. The first form is the ideal concept of CSR in which corporations practice CSR to be socially responsible. In this ideal state, corporations do not expect anything in return for their CSR initiatives. Another form of CSR is developed and implemented to uphold the companies' interest. Such corporations anticipate the return of their CSR investments whether in tangible or intangible form. Related to this form is the third concept of CSR in which corporations view the practice as a sound investment. The theory of sound investment states that the stock market responds to the corporation's actions and as such attitudes reflecting social responsibility will be rewarded by the market. The last form of CSR is applied to prevent the intervention of external forces such as political influences. In this CSR application, the corporation practices CSR to avoid the authorities' interference through legislation.

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While corporations have been consistently part of the society, their specific roles and obligations have been vague which led to very subjective interpretations of both the private and public domain. Increased awareness of the corporation's responsibilities can create opportunities for the community to act as powerful key players in the society.

Another classification of CSRs includes Strategic CSR. This type refers to the case wherein a company conducts activities related to community service to be able to accomplish business goals. Strategic CSR is often viewed as generating results that is good for both the company and the society.

Throughout the years, public perception regarding the role of companies' in the society has remarkably changed. During the latter part of the 1970s, two to one of the British public believe that the profits made by companies positively impact the consumers. 80 % of the public stands that corporations have a moral duty to fulfill to the society, however 61 % of consumers also believe that these companies are interested in neither the environment nor social responsibility. The gap between the public's expectation and their perception of the company can be addressed by the practice of CSR.

However, adapting CSR entails understanding of key stakeholders. The concept of stakeholders was defined as any individual or groups which can affect or may be affected by the company's achievement of its objectives. The stakeholder's theory further states that the company has a responsibility for both the society and its share holders.  The internal and external stakeholders of a company are mutually dependent on each other. External stakeholders refer to the key players which composes the company's framework which can affect its identified opportunities and threats. Internal stakeholders meanwhile remain a part of and are dependent upon the daily operations which restrict the strengths and weaknesses of the company in the market.

The most important external stakeholder is the media. Being the ambassador of messages as well as opinions, the perception of a company caused by the media's influence may affect the rest of the public's view. Thus, in communicating CSR and other business strategies to the public, it is important for the corporation to convey its message through a strong and sincere person.

Being able to communicate the business initiatives of a company significantly affects their chances of generating benefits from CSR. The public's general awareness of the CSR concept has relatively kept the debate within the public domain. The value of CSR often shows in periods of crisis such as in the case of the multinational construction company, Skanska Group. In terms of CSR, the company has been viewed by the public to be operating in a global scale but is facing issue on CSR not to mention the history of bad publicity. In 2005, the group faced a scandal regarding the massive use of cartels in the industry. As high as 46% of the managers admitted their awareness of such dealings in their business this aggravated the perception of low ethical standards. The Skanska group has not been found guilty of the cartel scandal but the company's history showed similar concerns thus the need to resolve the issue in a CSR approach.

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During this period, the media was ruthless in their projection of the company's involvement in the cartel, thus the credibility of the Skanska group was significantly damaged. Since the incident, Skanska has worked specifically on its awareness of CSR and has initiated efforts that address sustainability issues such as the social, financial and environmental values of its operations.

In contrast to the bad publicity generated by the Skanska group, Motorola has been receiving positive publicity due to its remarkable CSR contributions to its stakeholders. One of the leading manufacturing companies in the mobile phone industry, Motorola received the Best Corporate Citizenship Practice in 2004 after its initiative in contributing to the Hope project and the training provided to local suppliers and partners.  The Hope project is a nationwide project that aims to assist in the education of underprivileged children. Motorola's initiative to conduct management training courses to approximately 4,000 managers in state owned companies across the nation.

In the same year, the company also received the 2004 Most Influential Multinational in China after a conducted survey revealed that the company achieved high ranks on almost every aspect of the survey. The company particularly ranked high on internal process, corporate image, financial health, market competitiveness, leadership, corporate culture, human resources and crisis management. The general public as well as industry experts and employees of multi-national companies in the country participated in the survey.