Through business activities, companies interact with the society and create an impact on the said society where business is conducted. A company starts out employing people, or manpower, and begins the production of goods and services. The latter involves transaction with the local suppliers as well as the customers. Basically, this is the nature of interaction between businesses and the buying public. However, apart from this basic perspective, there are other various ways in which a company interacts with the society that may not directly relate to the mere buy and sell aspect.
Understanding the Perspectives of a Local Community
This is now the concept of corporate social responsibility where companies voluntarily participate and invest in the larger community through social activities and relationship-building programs. The fundamental essence of the existence of corporate social responsibility is for corporations to fulfill a sense of obligation towards the society, thus, balancing the social, environmental, and economic aspects of the business. Companies have gone beyond the primary and ultimate goal of maximizing profits to reaching out to the larger community it belongs to. Many companies want their presence in the society in which they operate to be the source of fulfillment and satisfaction.
The local community, being the main target of interest of a company on corporate social responsibility activities, may be broadly defined as a group which is relatively smaller in number compared to a society at large. In order to be clearer about it, let us identify the different perspectives of the concept of local community.
A local community in the administrative perspective may include places where companies negotiate regarding issues of common concern. These could be the cities, municipalities, or nations in a larger angle. Next, the local community may be limited to a corporate perspective or areas where the business operates and functions. Lastly, it can also be understood in terms of cluster perspective in which geographic location and proximity is highly considered. This is relative to a company’s goal of showing competitive advantage among other players in the industry at a national and regional level. So, depending on the scale of the business and its coverage, these three perspectives help define the concept of a local community.
Motivational Factors for Community Engagement
Various perceptions arise with companies getting involved in the local communities. A corporation offers participation in the community programs for various motivational factors from the primary goal of obtaining business benefits to value-based factors. When a company engages itself in activities towards society, the kind of motivation is often called as ethical or normative motivation. It is founded on the principle that corporate managers are individuals who also possess personal ethical values just as everyone else does instead of mainly being thought of as ‘profit-generating machines’.
As mentioned in the earlier paragraph, there are various motivational factors as to why a company would engage in the local community. One is awareness of impact where companies, especially the large corporations, are aware of their obligation considering that they create an impact to the society. Another factor is decency and visibility in the local community. Companies want to be known as decent, professional, and respectable to the people in the society. Some companies are motivated to compensate for scarcity in the local access to resources. So these firms are more concerned about “filling the gap” on the needs and producing supply or availability in their area.
There are corporations that simply want to establish “good will” in their local community. Other organizations are after enhancing or producing an image or reputation in the society while some get involved to strengthen company business culture and employee skills. Lastly, certain companies are inspired to develop new products and markets through community involvement.
Basic Categories in Local Community Involvement
For whatever reasons a company has in participating in community affairs, these firms may be classified into three major categories: community giving, employee involvement, and entrepreneurship and employability. Corporations that target on engaging in the local community through contributions belong to community giving. Those firms where corporate volunteering is of primary contribution are under employee involvement. Here is where employees take the lead in actively engaging in community programs. Finally, the last category, entrepreneurship and employability, includes companies that integrate members of the workforce sometimes to their disadvantage.