Corporate Social Responsibility – is it a PR-like hoax or science?

Image : shutterstock
Image : shutterstock

When asked about the implementation of CSR (Corporate Social Responsibility), many owners of Polish companies reply in the affirmative. When asked what social responsibility stands for, they answer that it is a way of performing philanthropic-like activities. The thing is that CSR, above all, is not about the way companies spend money, but how they earn it

by Sergiusz Prokurat

Milton Freidman, a Nobel Prize winner, once said: “The business of business is business.” Actually, for most companies, the last several decades have been strictly about making a profit. When buying products, customers do not really pay attention to whether employees receive equitable remuneration, or how the production process affects the environment, or whether profits from sales go solely to the company or also to the local community. Nevertheless, for some time we have observed a tendency towards noticing other opportunities of running a business. Social awareness triggers the demand to meet different needs that society considers significant, such as protection of the environment, fighting against discrimination and social exclusion, or creating employee-friendly workplaces where they can feel fulfilled.

shutterstock_103079840A voluntary strategy, taking into account social, economic, ethical and ecological aspects of business activity, and the relationship with the surrounding environment, has been defined as Corporate Social Responsibility, which stands for responsibility towards society, understood as the personal contribution of a business owner towards improving the condition of that society. It is a concept according to which companies voluntarily include social and environmental aspects into their commercial activities and in their relations with interested parties, i.e. stakeholders. In practice, it is incorporated into such activities as: social campaigns, corporate volunteering, sponsorship of cultural events, product sales combined with donating part of the revenue to a particular social objective, development  of ethical codes of conduct, or ecolabelling of products. Recently, CSR has even been recognized as an area of study. “It is a structured philosophy of operation, accompanied by clear dimensions and a written range of tools intended for the implementation of objectives. For example, Wayne Visser, who has been doing research on CSR for 20 years, has identified five stages of CSR comprehension: creativity and innovation, scalability and focus on global challenges, reply and response, matching the approach and understanding of local challenges with the global perspective, and a closed cycle, i.e. running a business which at the same time meets market needs and creates them, so that they are contained in a kind of a closed cycle. In the case of some companies, we can talk about a well considered and deliberate CSR strategy, in which all objectives are assigned with indicators that monitor progress. “Analyzing the guidelines of Global Reporting Initiative (GRI), which stand for an international module of reporting responsible business and sustainable development, allows CSR to be treated as a scientific process,” said  Katarzyna Bachnik, Assistant Professor at the Warsaw School of Economics.

This point of view does not convince everyone. On hearing “CSR,” many people smile cynically and think that it is pure PR, another marketing trick to attract customers. Bachnik argues, however, that there is an essential difference: “A company should not talk about activities performed in the field of CSR. CSR is not PR. CSR functions within the framework of strategic operations – provided that it is not “an addition” Screen shot 2016-10-19 at 11.51.29 AMaimed at raising the morale of employees and strengthening the company’s image – and is associated with the implementation of specific goals.” In contrast to charity or marketing actions, CSR operations are not of an incidental character but are carried out in the long term. “Although CSR has been created somewhat in opposition to Friedman’s statement, economics is still one of its pillars, so CSR must be profitable. And it will be if the social responsibility strategy is naturally interrelated with the main area of a company’s operations, which facilitates the analysis of existing practices and procedures from a different viewpoint and seeking improvement and modifications. As a result, CSR can be a driving force for innovation,” added Bachnik. In order to understand CSR, it is extremely important to realize that its operations should result from a high sense of social responsibility of an entrepreneur and a strong willingness to resolve social problems, which in Poland include: unemployment, poverty, unequal opportunities on the labor market, or limited access to education in rural areas and an insufficient level of environmental protection. In practice the CSR strategy pursues the demand for striving towards sustainable development, where the economy, ecology and social matters are equally important. The research study entitled “CSR Managers in Central Europe” by Delloite and PBS postulates that the main driver for taking initiatives within the scope of social responsibility and business ethics by companies and business organizations is the willingness to improve the company’s and an entrepreneur’s image. Owners of small and medium-sized businesses in Poland, which play the most significant role in the economy, are associated by many citizens with such concepts as: capitalism, private property, profit, and wealth. These connotations are not positive. Therefore, Poles associate CSR directly with PR.

shutterstock_293143247Meanwhile, an increasing number of companies in Central Europe have begun implementing strategies that enhance their contribution to sustainable socio-economic development. The key benefits of CSR activities for enterprises are: increased engagement among employees (65 percent), enhanced reputation (55 percent) and improved relations with local communities (53 percent). One key conclusion of the study is the common awareness of Central European CSR managers that their business has contributed to solving socio-economic problems in individual countries. From a managers’ perspective, the implementation of CSR is well supported by those tools and methods, which involve cooperation with employees: corporate volunteering (36 percent) and ethical programs for employees (29 percent). Useful instruments of external cooperation in the field of CSR include: dialogue with stakeholders (35 percent), social campaigns (29 percent) and pro-environmental programs (29 percent). These conclusions largely coincide with the results obtained in the research concerning Poland.

There is no denying that CSR functions, most of all, in the realm of corporations – large companies can afford to show that they care. Acting in this way, whether they like it or not, they create their image in relation to a socially desired initiative. Thereby, they derive business profits, as the actions carried out lead to strengthening employee and consumer loyalty, emphasizing product specificity and raising the sales of products or services. But what about small and medium-sized companies? When is it worth considering CSR? Bachnik has no doubt: “First of all, a company must be profitable, to be responsible towards its owners, investors or stakeholders. A profitable business is not incompatible with the idea of CSR, nevertheless it is important to think not only economically, but also socially and environmentally.” So, isn’t it true that for most small businesses CSR is baloney and marketing hype – an expense they cannot afford? Not necessarily. It seems that everything depends on the level of social awareness. The United States of the nineteenth century was developed upon a Protestant belief, according to which when someone was rich it meant that God had favored them, and consequently such a person was obliged to share their property with others. Therefore, corporate social responsibility places the emphasis on integrity that can be removed from business ethics.

Another important aspect is education. If people are educated, they understand that living in a democratic society is not only about privileges, but also about obligations. Thus, we need to remember that CSR will not pop up with the wave of a magic wand. Rather it should grow out of social awareness. Another Deloitte research entitled “Christmas Shopping 2015” showed that six out of ten Poles carefully read labels when buying presents. A similar percentage avoids buying gifts manufactured using environmentally harmful processes. In practice, however, almost half of Poles buy what is easily available and inexpensive. This shows that CSR in Poland still has a long way to go.

 

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