The general claim about corporate social responsibility mainly revolves around the accountability of giving back the investment returns of the shareholders, being socially responsible towards the environment, and being responsible to the other groups that may be within or outside the corporation. This assertion often arouses debates among business people since the scope of the said “responsibilities” and “returns” and how they will be obtained are not clearly defined. The degree of responsibility towards the shareholders and the stakeholders is also a crucial issue in CSR arguments.
As a general characteristic, responsible business always starts out by complying with the regulations and conducting business according to proper ethical actions. These laws and policies oftentimes set limit and compels obligations towards the “triple bottom line.” Apart from that, it is a global culture to all business worldwide to operate based on ethical principles of honesty and fairness. But companies extend CSR practices beyond the two basic approaches mentioned which becomes the common topic for debate over the concept. Companies deliberate on what they call strategic corporate social responsibility.
Understanding Strategic Corporate Social Responsibility
Strategic CSR connects the responsibility of the company toward the stakeholders and the environment to the well-being of the business. Companies should always show interest in both stakeholder and environmental issues every time these issues would benefit the corporation. So, if you may notice it, the business environment now consists of partnerships between firms and non-profit organizations for a social or environmental cause.
As a way of aligning social responsibility with business objectives, some companies even redesign their products or services and modify it to a more environmentally friendly output. Or, some firms take up a cause for a certain social issue in the community or at a larger scope.
When CSR is strategic, it goes beyond legal or ethical requirements but it depends on the discretion of the corporation. With strategic CSR, the company is not just responsible to the environment and stakeholders but becomes committed to enhancing the well-being of the community through discretionary approaches and sharing of resources for the benefit of the company.
Benefits of Strategic CSR
Engaging in strategic CSR provides corporations with a list of benefits. One of which is being able to minimize legal violations since it acts on its own discretion. Companies can also cut down on costs such as in the aspects of manufacturing, packaging, and transportation. Being strategized in performing social responsibility increases employee retention and attracts skilled individuals.
Firms can also enhance brand positioning and increase revenue as it develops a more reputable image to the consumers. Because there are partnerships formed, companies help lessen cases of protests by non-government groups. Lastly, companies are able to contribute in the environmental aspect by developing eco-friendly products and services.
Strategic CSR versus Radical CSR
The concept of radical CSR, as opposed to strategic CSR, changes the traditional structure and nature of the business from being merely profit-generating to being socially responsible to its stakeholders and the environment. The stakeholders include the company employees, consumers, suppliers, creditors, local communities, and shareholders. So the company exists to be of service to all stakeholders, the investors, and the environment. With radical CSR, corporations would go beyond simply serving the community to making the social and environmental responsibilities as the core of the business existence.
Many companies like the concept of strategic CSR better because they can maximize profit which is actually the primary business purpose and at the same time connect to its stakeholders and shareholders to their discretion with a purpose of fulfilling other important aspects of its existence. However, strategic CSR still raises some arguable points.
One concern is the ability of a firm to balance its benefits to the company and the stakeholders as well as the environment. The benefit of creating a reputable image, for instance, can be difficult to gauge. The same thing is true for attracting better employees. Can these be used to give good reason for social programs that do not really offer the necessary benefits to the company?
The other case for argument is the degree of being discretionary on the activities of strategic CSR. Are companies not supposed to verbally announce or state their commitment towards society? Even today corporations still bring these issues of debate about strategic CSR to the table.