SYDNEY -- Corporate Social Responsibility is a subject that has gained a lot of business, social and media attention in the last few years. This piece, adapted from The Australian Financial Review Case Studies with Business News 2008 Ernst & Young case study aims to give a brief overview of the topic of corporate social responsibility.
Corporate Social Responsibility (CSR) is a concept which sees companies taking responsibility for the people, communities and environment in which they engage. Corporate social responsibility activities are usually above and beyond the legal obligations as an organisation, allowing companies to give back to the communities around them and providing a proactive way for businesses to ensure a successful fit between their line of business, way of operating and external environment.
The St James Ethics Centre is an independent, not-for profit organisation that promotes the exploration of ethics and ethical decision making in daily life and business situations. Among other things, the Centre helps the business community integrate ethics and corporate social responsibility into business practice. Many organisations model their corporate social responsibility strategy on the recommendations of the Centre.
Many companies have a variety of stakeholders who will also have expectations that the organisation will give back to the community. Businesses therefore have a responsibility to reconcile the interests of its stakeholders - employees, shareholders, customers, the government, society and the future environment. The St James Ethics Centre recommends that businesses take into account the needs of all these stakeholders when developing business practice and business strategy.
There are many advantages for businesses to be socially responsible. Effective corporate social responsibility can be a useful way for companies to attract and retain staff whilst building trust and respect within the local community.
Corporate social responsibility can also act as a powerful branding or marketing tool and provide effective risk management by supporting the local community through charitable initiatives. Through positive environmental and social activities, the risk of problems arising with local communities is reduced. Corporate social responsibility can therefore form part of an organisation's risk management strategy.
For organisations that are committed to corporate social responsibility, it makes perfect business sense. Helping to build a prosperous local society means that the community will then have the ability to obtain goods or services from that organisation. The local community is also more likely to purchase from a company that practices corporate social responsibility and is seen to be giving back to the community it is a part of.
The St James Ethics Centre believes that corporate social responsibility obligations should mirror the internal company culture of an organisation. In order for corporate social responsibility programs to be effective, the organisation must have strong internal values and behavioural expectations of its employees. If a business wants to be trusted and seen to do the right thing with regards to the outside community, it must also undertake its business obligations in the same way by encouraging an internal culture of integrity, teamwork and respect.
To read the rest of this case study, or to learn more about corporate social responsibility, please visit the Australian Financial Review Case Studies with Business News website at www.afrbiz.com.au.
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