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Understanding CSRSajid Kazmi
Consultant
Regoverning Markets Project
SDPI
Islamabad
E-Mail: [email protected]
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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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