Corporate Social responsibiltiy Flashcards
WHAT IS CSR?
Companies sense of responsibility towards the community and the environment (ecological and social) in which it operates
Organization does not only focus on the profits but the people and environment
CORPORATE SOCIAL RESPONSIBILITY
=Focus is on increasing image and profits.
=Ensure all internal CSI policies include stakeholders interest.
=Often intended as a marketing initiative
CORPORATE SOCIAL INVESTMENT
=Focus is on the upliftment of community without return on investment.
=Ensure that CSI projects are relevant to the needs of communities .
=Intended to benefit and uplift communities through social development.
CORPORATE SOCIAL RESPONSIBILITY IN BUSINESS
=While ensuring that the business is sustainable, organizations need to contribute to society and the environment
=Business needs to act as a good Corporate Citizen (King Code)
=Stakeholders (Shareholders, employees, customers, suppliers) pressure the business to comply with CSR concept
=Primary responsibility – look after the interest of stakeholders
=Secondary/broader responsibility –indirect stakeholders (community, government, environment)
SOCIO ECONOMIC ISSUES
1.Crime
2.Poverty
3.Lack of Education
4.Unemployment
5.Environment concerns
6.Poor health services
7.Inequality
8.Poor housing
THE RELATIONSHIP BETWEEN MANAGEMENT ETHICS AND SOCIAL RESPONSIBILITY
An on-going commitment by businesses to behave in an ethical manner by contributing to the economic and social development of employees and the community at large.”
stakeholders
customers
employees
government
community
suppliers
ADVANTAGES OF CSR FOR THE BUSINESS
1.May attract experienced employees/increase the pool of skilled labour which could increase productivity.
2. Positive/Improved image as the business looks after employees/conducts itself in responsible way.
3. A business may have a competitive advantage, resulting in good publicity/an improved reputation.
=Promotes customer loyalty resulting in more sales.
4. CSI projects may be used as a marketing strategy to promote their products.
5.The business enjoys the goodwill/support of communities.
5.CSI projects promote teamwork within businesses.
6.CSI helps to attract investors because of increased profits/income.
7.Gives businesses tax advantages such as tax reduction/-rebates.
8.Assists in solving socio-economic issues like poverty/unemployment, etc.
9.The government is less likely to enforce issues through legislation to businesses that voluntarily participate in CSI projects.
DISADVANTAGES OF CSR FOR THE BUSINESS
1.Business may not be supported/Customers may not buy their products/services resulting in a decrease in sales.
2.Small and medium enterprises find it difficult to implement CSI programmes.
3.Detailed reports must be drawn up, which can be time consuming.
4.Social spending reduces business/economic efficiency which makes it less competitive.
5.Social involvement is funded from business profits which could have been used to the benefit of customers/reduce prices.
6.CSI activities distract business focus from its core business functions. * Businesses find it difficult to adhere to legislation governing CSI.
7.It can increase financial risk, as programmes cost money and may impact negatively on profits.
8. It is difficult to accurately measure the effectiveness of social investment.
9.It is not easy to determine the exact needs of the communities, which may result in fruitless expenditure on CSI.
10.Most managers are not trained/lack experience to handle social programmes.
11.Employees may spend more time working on CSI projects instead of focusing on their core duties.
12.Shareholders may receive less dividends, as some profits are spent on CSI.
Some shareholders/stakeholders might withdraw their support from the business as they feel that social issues should be the government’s responsibility.
ADVANTAGES OF CSR ON THE COMMUNITY
1.Socio-economic issues are attended to which will improve the welfare of the community.
2. Training opportunities in the community increase the possibility of appointments of members of the community.
3.Implementing developmental programmes in the community improves entrepreneurial skills of communities.
4.Provision of bursaries encourages communities to improve their skills.
5.The standard of living of the community is uplifted/quality of life of communities is improved.
6.Better educational facilities are established in poor communities.
7.The provision of medical infrastructure improves the health of communities.
DISADVANTAGES OF CSR ON THE COMMUNITY
=Businesses are not always equipped to address social problems.
=Communities tend to be dependent on CSR programmes and struggle to take their own initiatives.
=Distribution of scarce resources to selected beneficiaries in the community may cause problems such as discrimination.
=Some businesses only participate in CSR initiatives to raise profit and do not really care for the community in which they operate.
=Businesses cannot meet the longer term needs of the society.
=The benefits of the programmes may not filter to the intended persons within the community.
=Spending money on CSR programmes means the business has to recover expenses through higher prices which have a negative impact on the economy
TRIPLE BOTTOM LINE
=profit
=people
=planet
=profit
=Triple Bottom line means that businesses should not only focus on profit/charge high prices, but should also invest in CSI projects.
=Businesses should not make a profit at the expense of its community
=people
=Business operations should not exploit people, employees, customers, community.
=Businesses should engage in sustainable community programmes that will benefit/uplift communities.
=Improve the life style of life of their employees.
=planet
=Businesses should not harm the environment for profit purposes.
=They may support energy-efficient or eco-friendly production methods.
=Recycle/Re-use waste, e.g. packaging from recycled material.
