Corporate Social Responsibility

Wednesday, 8 December 2010 00:01 -     - {{hitsCtrl.values.hits}}

Generosity, charity, donation and almsgiving are not new to the Sri Lankan culture. Even a survey conducted recently has shown that the country’s people are the eighth most generous in the world in providing charity donations.

Thus, the concept of Corporate Social Responsibility (CSR) which was developed in US with the growth of the economy is not strange to our business community. It’s mainly about the extent.

The main objective of any business is to gain more and more profit and to thrive in business. With CSR coming in to play, that definition or the traditional understanding of business changed. The concept of CSR added value and recognition to businesses in a formal way.

Today we see a change in how the private sector plays its leadership role in contributing to the growth and development of the community of the country. Their scope is now spreading over the fabric of economic, social, political and the environment.

CSR gives an opportunity for the businesses to take a bird’s eye view of society and take steps beyond their responsibilities to the employees of the company and their clients. Through launching such projects, businesses can make a genuine commitment through which they can strengthen their reputation and create very important links with the communities in which they operate.

Some of the drivers pushing business towards CSR include:

  • The role of government
  • Demands for greater disclosure
  • Increased customer interest
  • Growing investor pressure
  • Competitive labour markets

Are the companies doing CSR projects genuinely?

CSR is the popular trend of the era. All most all the business organisations medium and large are practicing this concept in their companies. If the companies are genuinely interested in implementing CSR projects, they have lots of opportunities to serve the community as an 80% majority is below the poverty line and there are enough and more burning issues of our society. But the question is whether the companies are really interested in serving or whether they are doing projects simply to get the publicity for their products and brands and become popular.

Today customers are more knowledgeable and exposed to a lot of information and they look for the ethical behaviour or conduct of companies when they purchase goods. That is why certain international brands were rejected in the market for using child labour. Thus companies are forced to maintain certain level of quality in order to create a positive image amongst customers.

This applies not only in the case of customers; investors and suppliers also assess companies’ performance, before making their decisions. Their bargaining power is so high where they can pressurise the companies when making decisions. They take steps to ensure that their partners conduct themselves in a socially-responsible manner.

Further, employees are increasingly looking beyond pay checks and benefits and seeking out employers whose philosophies and operating practices match their own principles. In order to hire and retain skilled employees, companies are being forced to improve working conditions.

Benefits that the company gains

  • Enhanced brand image and reputation
  • Increased sales and customer loyalty
  • More ability to attract and retain employees
  • Workforce diversity
  • Trust

Benefits to the community and the general public:

  • Charitable contributions
  • Employee volunteer programmes
  • Corporate involvement in community education, employment and homelessness programmes
  • Product safety and quality
  • Manifested respect for the environment and communities in which they operate

Attention towards the environment through CSR

Creating a massive impact on the environment and the pollution, industrialisation conquers the globe rapidly, especially in the manufacturing industry. Even the Sri Lankan manufacturers gained remarkable business growth with the development of technology and other revolutions taking place in the industry and unconsciously joined hands with the polluters of the environment.

Hence the Government of Sri Lanka introduced several new regulations which attempts to ensure that the business tycoons take measures to save the environment and be very careful and more concerned about the environment.

Nevertheless, many companies continue to overlook CSR in the supply chain – for example, by importing and vending wood that has been illegally harvested.

CSR, a step for poverty alleviation and for providing employment

Well, poverty alleviation or providing employment does not come under business agendas of companies directly. In the event of the government’s failure in contributing to this, for more than 50 years the private sector or rather non-government organisations have been engaged in providing these to people under CSR services. In fact every employment created by the corporate sector directly linked to the creation of wealth among people.

In providing employment I would like to suggest that the companies give a little attention to the candidates from poor families, provided they possess the required qualification and competencies. Differently able people can also be given a quota.

Helping hand to community health through CSR

This is another option that is open for those who are willing to execute CSR projects as there are many people who are need help. The government has provided free health services. Thus the ad hoc contributions and donations will not serve the purpose.

There are some big profitable companies which run health camps on and off to help diagnose patients. But does that really support in building a healthy community? Isn’t it more practical to develop relationships with rural hospitals and maintain support for longer periods of time, providing necessary funding, drugs or equipment rather than distributing some Panadol and Siddhalepa to poor people followed with publishing articles of donations in the news papers?

In the event a company really wants to run CSR projects, they can find needy people from the newspapers and give them financial assistance. In that way you might get more happiness than taking pictures and publishing them.

Provide shelter through CSR

The ruling parties in our country have taken several efforts to provide shelter for poor and needy people under various themes. However, even today we see street children and families around the country.

Again, those who waste money over car washes, fashion shows and cocktails can pause and take a step back to contribute to build houses for poor. If you are genuine in your actions, your love for humanity will spread around the country without you incurring any media cost.

Challenges for implementing CSR

The concept of Corporate Social Responsibility is now firmly rooted in the global business agenda. In order to move from theory to concrete action, many obstacles need to be overcome.

A key challenge facing business is the need for more reliable indicators of progress in the field of CSR, along with the distribution of CSR strategies. Simplicity, openness and discussion will create a more trustworthy image to the business.

(The writer is the Managing Director and CEO, McQuire Rens Group of Companies. He has held regional responsibilities of two multinational companies of which one was a Fortune 500 company. He carries out consultancy assignments and management training in Dubai, India, Maldives, Singapore, Malaysia and Indonesia. He is a much sought-after business consultant and corporate management trainer in Sri Lanka).

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