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Understanding CSRSajid Kazmi

Consultant

Regoverning Markets Project

SDPI

Islamabad

E-Mail: sajidkazmi@gmail.com

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Kofi Annan, UN Secretary-General.

June 2004

Symbolism is good, but

substance is even better.

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President Lula of Brazil

June 24 2004 in New York

Business must refrain from takingaway by its lobbying activitieswhat it offers through corporateresponsibility and philanthropy.

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Corporate Social Responsibility

Objectives of the session

Defining Corporate Social Responsibility

Understanding various concepts related to CSR e.g.,

drivers, stakeholders, triple bottom line

Some real life examples of how and why companies

engage in CSR &

Some disjointed thoughts

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Defining Corporate Social Responsibility

Why do we talk about CSR?

Because of Corporate Social Irresponsibility!!!

Because Corporations are acting and talking more

often more about their Social Responsibilities Resurgence of Corporate Social Responsibility discourses and

practices in the 1990s beginning of the new Century, i.e. REVIVAL

OF CSR (Vogel, 2005)

Statements and actions from numerous corporations (e.g. in US)

Institutionalization of CSR as a real business arena on its own

turning CSR into a an organizational field (The Economist, 2005)

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Defining Corporate Social Responsibility

Why do we talk about CSR?

Because corporations do NOT EVOLVE in A SOCIAL VACUUM, they act in

an environment which is not only ECONOMIC, COMMERCIAL and

FINANCIAL (related to markets) but also SOCIAL, HUMAN, ECOLOGICAL

and POLITICAL (i.e. they have a non market environment)

i.e. Business is located within Society (or Societies)

The interaction between

BUSINESS SOCIETY

could be captured by the idea that BUSINESS has RESPONSIBILITIES toward itsSOCIAL environment

i.e. CORPORATE SOCIAL RESPONSIBLITY

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Defining Corporate Social Responsibility

Consequences of that contested natureThe term [CSR] is a brilliant one; it means something, but not

always the same thing, to everybody (Votaw, 1973)

The corporate social responsibility field is not only a

landscape of theories but also a proliferation of approaches,which are controversial, complex and unclear (Garriga and

Mel, 2005)

CSP, together with CSR 1 and CSR 2, carry no clear meaning

and remain elusive constructs. They have defied definition

[] Clarkson (1995: 92)

Numerous

meanings of CSR

Plurality of labels

and approaches

Lack of strongtheoretical

foundations

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Defining Corporate Social Responsibility

Structuring the analysis of CSR

Some basic questions to investigate Corporate Social Responsibility

[1] What is corporation responsible for?

[2] Toward who is the firm responsible to?

[3] How to manage these seemingly conflicting goals?

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Triple bottom line

Economic

Social

Environmental

Sustain-

ability

A triple bottom line

focus on people,

planet and profit

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Drivers of CSR

` Reputation and brand management

` Business risk management

` Employee recruitment, motivation and retention

` Access to capital

` Learning and innovation

` Cost savings and operational efficiency

` Competitiveness and market positioning

` Social licence to operate` Improved relations with regulators

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What is the nature of Corporate Social

Responsibilities?

A basic model [Carroll, 1979; Carroll & Buchholtz, 2000]

Corporate Social

Responsibilities

Be Profitable

The foundation upon which all others

rest [Required ofBusiness by society]

EconomicResponsibilities

Obey the LawLaw is societys codification of right and wrong.

Play by the rules of the game [Requiredby

Society]

Legal

Responsibilities

Be Ethical

Obligation to do what is right, just, fair.Avoid harm [Expectedby society]

Ethical

Responsibilities

Be a Guo Corporate CitizenContribute resources to the community;

improve quality of life [Desiredby Society]

Philanthropic

Responsibilities

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Definition of a stakeholder

A stakeholder in an organization is any

group or individual who can affect, or is

affected by, the achievement of the

organizations objectives (Freeman, 1984)

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Toward who is the corporation responsible to?The stakeholder model

Suppliers

Shareholders

Firm Consumers

Employees

Traditional management model

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Stakeholder model

Shareholders

Firm

Govt.

Consumers

Employees

Suppliers

CompetitorsCommunities

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Calgene and Agriculture Biotechnology

Small agriculture biotechnology firmDeveloped Flavr Savr Tomato containing Antisense Gene

In 1980s, there were no est. approval procedures genetically

engineered productsAdopted an integrated strategy

Lobbied with Congress

Developed relations with regulatory bodies (FDA, EPA,DOA)

Voluntarily provided info to regulators

Cultivated mediaParticipated in national and international bio-tech forums

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Some disjointed thoughts

Corporate governance

CSR Reporting

Social and environmental accounting

Home and host country operations of MNCs

Outsourcing and offshoring

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CSR in Pakistan

Pakistan has a history of private

philanthropy

At a very nascent stage

Only a few companies are engaged in CSR

Global Compact, SECP

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Market Place

Practices

Community

Engagement

Workplace

Welfare

Environmental

Stewardship

Corporate

Governance

By way of summary

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