The Challenges Of Corporate Social Responsibility Commerce Essay

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Corporate Social responsibility, also known as 'corporate citizenship, corporate social performance or corporate responsibility', is a form of corporate self-regulation integrated into a business model. Corporate social responsibility (CSR) means that a corporation should be held accountable for any of its actions that affect people, their environment and their communities. Corporate social responsibility (CSR) is about understanding a business impact on the wider world and considering how someone can use this impact in a positive way. CSR also implies that harm to people and society should be acknowledged and corrected if at all possible. It may require a company to sacrifice some revenues or some profits if its social impacts seriously hurt some of its stakeholders or if its funds can be used to have a positive social impact. However, being socially responsible does not mean that a company must abandon its other missions.


A business has many responsibilities: Legal, economic and social. The challenge for the management is the mixing of these responsibilities into a comprehensive corporate strategy while not losing sight of any of its obligations. Sometimes these responsibilities will clash and sometimes they will work together to better the firm. Thus, having multiple and sometimes competing responsibilities does not mean that socially responsible firms cannot be as profitable as others less responsible; some are and some are not. Social responsibility requires companies to balance the benefits to be gained against the costs of achieving those benefits. Many people believe that both business and society gain when firms actively strive to be socially responsible strive to be socially responsible. Others are doubtful, saying that taking on social tasks weakens business's competitive strength.

Corporate power and Social responsibility:

The social responsibilities of business grow directly out of two features of the modern corporation:

The essential function it performs for a variety of stakeholders and

The immense influence it has on the lives of the stake holders

(Business and society by Lawrence and Weber, 12th edition, page: 46-47)

We always count on corporations for job creation; much of our community well-being; the standard of living we enjoy; the tax base for essential municipal, state, and national services; and our needs for banking and financial services, insurance, transportation, communication, utilities, entertainment, and a growing proportion of health care. These positive achievements suggest that the corporate form of business is capable of performing a great amount of good for society, such as encouraging economic growth, expanding international trade, and creating new technology.

In 1996, David C. Korten's quotation frequently appeared in journals for business executives, challenged the readers to assume a responsible role for business in society:

Business has become, in the last half century, the most powerful institution on the planet. The dominant institution in any society needs to take responsibility for the whole...Every decision that is made, every action that is taken, must be viewed in light of that kind of responsibility.

(David C. Korten, 'limits to the social responsibility of business,' The People Centred Development Forum, article 19,

Release date: June 1, 1996).

Most of the 100 largest economics in the world are global corporations. The world's largest 200 companies account for more than a quarter of the world's economic activity and have twice the economic clout of the poorest four-fifths of humanity. About one-third of world trade is simply transactions among units of the same company. (New York, McGraw hill, 1966). Many people are concerned about the enormous influences of business. The focused power found in the modern business corporation means that every action it takes could affect the quality of human life - for individuals, for communities, and for the entire globe. This obligation is often referred to as the IRON LAW OF RESPONSIBILITY. The 'iron law of responsibility' says that in the long run, those who do not use power in ways that society considers responsible will tend to lose it (this concept first appeared in Keith Davis and Robert Blomstorm, Business and its Environment; McGraw-hill 1966). With such technology as global computer networks, instantaneous commercial transactions, and exponentially increasing collection and storage of information drawing the world into a tighter and tighter global village, the entire planet has become a stakeholder of all corporations. All societies are now affected by corporate operations. As a result, social responsibility has become a worldwide expectation these days.

Corporate Social Responsibility of Grammenphone (GP) in Bangladesh:

Grammenphone started their journey in Bangladesh in June 1998. Widely known as GP, is the leading telecommunications service provider in Bangladesh. With more than 20 million subscribers (as of June 2009), Grammenphone is the largest cellular operator in the country. It is a joint venture enterprise between Telenor and Grameen telecom corporation, a non-profit sister concern of the internationally acclaimed Microfinance organization and community development bank Grameen bank. Telenor, the largest telecommunications company in Norway, owns 62% shares of Grammenphone and Grameen Telecom owns the remaining 38% (

Grammenphone was the first company to introduce 'GSM technology' in Bangladesh. It also established the first 24-hour call center to support its subscribers. With the slogan Stay Close, stated goal of Grammenphone is to provide affordable telephony to the entire population of Bangladesh (Daily prothom-alo, 16th of May 2006, page 1)

At Grameenphone, they live by the statement "Development is a journey, not a destination." GP's work is not just about ensuring connectivity; it is about connecting with people and building relationships, based on trust, with their subscribers, business partners, employees, shareholders, as well as the wider community. They have always believed that good development is good business. While GP maintain their business focus, taking the nation forward remains their top priority. Thus their relationship with Bangladesh is built on a partnership which strives to achieve common economic and social goals.

Corporate social responsibility, as they see it, is a 'complementary' combination of ethical and responsible corporate behaviour, as well as a commitment towards generating greater good for the society by addressing the development needs of the country.

GP's core strategy in this area is to be Bangladesh's partner in developing the country, particularly in its promise, as a United Nations Millennium Declaration signatory, to meet the eight targets known as the Millennium Development Goals by 2015 ( Daily Jugantor, 26th of March, 2006, page 2). They have consolidated their social investment initiatives in four core areas related to the Millennium Development Goals namely,

Poverty alleviation:

With the help of 'Grameen Bank', Grameen phone is helping the poor villagers in Bangladesh by giving them small amount of financial loan to start their own firm or business. These loans are given to entrepreneurs too poor to qualify for traditional bank loans. Dr. Yunus is the founder of Grameen Bank.

In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize for their fantastic effort (


Grammenphone, jointly with Sightsavers International, organized a free Eye Camp at Government Gouronodi University College, Barisal on March 13, 2008 (Daily Prothom-alo, 14th of March, 2008).

This is the seventh free Eye Camp organized jointly by Grameenphone and Sightsavers International. Through these camps, conducted in rural parts of Bangladesh where people have little or no access to quality healthcare, Grameenphone aims to provide free eye-care services to the economically disadvantaged people of the area. The Dhaka Progressive Lions Eye Hospital (DPLEH), Takerhat, Madaripur, is the local partner in this eye camp. By taking these steps GP is showing that they are very committed to their social responsibilities. Grammenphone believed that in the long term, its commitment to developing healthcares for underserved populations would strength the company's financial performance by attracting new customers.


Lack of empowerment and poverty is a chronic and complex problem for Bangladesh. According to the UNDP HDI report (2006), which measures the average progress of a country in human development in terms of life expectancy, adult literacy and enrolment at the primary, secondary and tertiary level, Purchasing Power Parity (PPP), etc., Bangladesh ranks 137th among 177 countries. Moreover, 50% of the total population of Bangladesh lives below the poverty line, defined as an income of less than a dollar a day ( Some of the major factors contributing to this situation are inequality in income distribution, lack of access to resources, lack of access to information and inadequate infrastructure. The rural people of Bangladesh especially are deprived of these facilities, which is a major issue to break out from the shackles of poverty prevailing in the country.

Empowerment is a key constituent towards poverty reduction, and it is a key driver for sustainable development. It is a process whereby the capacity of individuals or groups are enhanced to make important choices and decisions, and to transform those choices and decisions into desired actions and outcomes. This, in turn, helps them to secure a better and more prosperous life.

GP firmly believe that they have significant contribution to make on this key issue. In their CSR journey, they have become the proud sponsor of Bangladesh Special Olympics team, which won 71 medals in the Special Olympic Games 2007 in Beijing, China. Six acid survivors have been assisted in their rehabilitation process with employment opportunities in Grameenphone. They have initiated the Information Boat project with Care Bangladesh with an aim to empower riverine rural communities with digitized livelihood contents and internet access while the CSR partnership with Ashokti Punorbshon Nibash (APON) aims to support treatment and rehabilitation of economically-disadvantaged drug addicts.

GP acknowledge that development and poverty reduction depend on holistic economic prosperity. Therefore, there aim is to increase development opportunities, enhance development outcomes and contribute towards improvement of the quality of life of the people through our CSR initiatives and innovative services. GP is committed to facilitate empowerment opportunities to the vulnerable people of Bangladesh, so that it enables them to better influence the course of their lives and live a life of their own choice.


Education is considered as one of the key focus areas of Grameenphone's social investments. GP is aim to work with the Government and development agencies, to achieve the Millennium Development Goal of ensuring universal primary education for all. In collaboration with Grameen Shikkha, an organization of the Grameen Bank family, GP provide scholarship to some 100 bright but underprivileged students at different academic levels through a scholarship fund annually. GP also provide educational support to a number of special schools - Tauri Foundation, HANS, CDC, and SEID Trust - with an objective to aid in the learning process of the gifted children in Bangladeshi society. Grameenphone is also a proud partner of the Enrichment Program of 'Bishsho Shahitto Kendro' through which free books are distributed (  GP recently initiated a CSR project to publish and distribute illustrated publications on the Liberation War for school-going children, with the objective to inspire them with the heroics of Bangladeshi freedom-fighters.

The organisation is witness to the endless possibilities and the strength of the people of Bangladesh. GP believe every step matters in the journey of hope they are taking together as a nation. With every connection they provide and with every opportunity they create in the community at large, they see the emergence of new possibilities. The Village Phone ladies lead them towards a silent yet powerful social revolution. The indomitable spirit of acid survivors inspires the organisation, while the confidence of intellectually challenged athletes shows them how to make the word 'impossible' obsolete.

Every step inspires them to move forward and takes them one step closer to their destination.

The importance of CSR and its contributions to corporate strategy:

Why is CSR so important? Most importantly, findings from scientific research are becoming increasingly clear with regard to how CSR is essential for the long-term sustainability of a firm. Firms that blindly and narrowly pursue the profit motive, without concern for the broad spectrum of Stakeholders that are relevant to the long run, are increasingly shown to lack sustainability. But it's not only important to realize the importance of these groups. Firms must also be able to "connect the dots" and understand how various Stakeholders, and the satisfaction of their needs, represent interrelated challenges. For example, the strategic management of human resources is related to customer satisfaction, and it is essential for firms to attempt to understand and deal with this connection.

Few CSR contributions are:

Balance corporate power with responsibility:

Today's business enterprise possesses much power and influence. Most people believe that responsibility must accompany power, whoever holds it. As I mentioned it before in this assignment, is called the 'iron law of responsibility'. Businesses committed to social responsibility are aware that if they misuse the power they have, they might lose it.

Promotes long-term profits for business:

At times, social initiatives by business produce long-run business profits. A New Jersey judge ruled in 'Barlow et al. v. A.P. Smith Manufacturing' that a corporate donation to Princeton University was an investment by the firm, thus an allowable business expense ( The rationale was that a corporate gift to a school, though costly in the present, might in time provide a flow of talented graduates to work for the company. The court ruled that top executives must take 'a long-range view of the matter' and exercise 'enlightened leadership and direction' when it comes to using company funds for socially responsible programs.

{Barlow et al. v. A.P. Smith Manufacturing (1951, New Jersey supreme court), discussed in Clarence c. Walton, corporate social responsibility (Belmont, CA: wadsworth, 1967), page 48-52}.

At the beginning of my assignment as I mentioned the Grammenphone believed that in the long term, its commitment to developing healthcares for underserved populations would strength the company's financial performance by attracting new customers, as well as support from governments and public health organisation.

Improves Business Value and Reputation:

Just by looking at Grammenphone we could see that, with their corporate social responsibilities their business value and reputation is higher than any organisation in Bangladesh. As I mentioned before they have more than 20 million subscribers as of June 2009.

The social reputation of the firm is often viewed as an important element in establishing trust between the firm and its stakeholders. A firm's reputation is a valuable intangible asset, as it prompts repeat purchases by loyal consumers and help to attract and retain better employees to spur productivity and enhance profitability.


CSR means that a corporation should be held accountable for any of its actions that affect people, their communities, and their environment. Business must recognise their vast power and wield it to better society. Though, CSR is a highly debatable notion, some argue that its benefits include discouraging government regulation, promoting long term profitability for the firm, and enhancing the company's reputation.