Corporate Social Responsibility: An Obligation That Can Be Transformed into a Great Asset for the Company
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Corporate Social Responsibility: An Obligation That Can Be Transformed into a Great Asset for the Company

Corporate social responsibility

I. Introduction

The objective of this work is to demonstrate that companies, in today’s world, need to understand the need to implement Corporate Social Responsibility projects, and when it do not companies will become negatively exposed. Good social responsibility practices strengthen the company’s brand and adds value to the business. The corporate social responsibility projects should be seen as an investment rather than an expense. Corporate Social Responsibility was at first a voluntary integration of social and environmental concerns into daily operations of organizations and its interaction with all stakeholders. Nowadays, even though a lot can be done voluntarily; there are already some requirements that must be inherent in the business, such as acting positively to society and managing the social and environmental impacts, the so-called license to operate.

It is important to begin by emphasizing the working relationship between the company and its employees. The workforce must be an agent of external and internal actions and this will only occur if the both publics start to witness and trust in the company’s processes. Either in respect to matters of citizenship, justice as well as quality of life. Once this stage is reached, or at least visibly under development in a company, the mobilization for external and internal actions will occur, since employees and community trusting in the company will engage and will act with pride and determination to defend the company aims.

In this paper it will be mentioned ​​a brief history of the evolution of corporate social responsibility and what led to the understanding of how the human factor is treated contemporaneously in this context. It will also be mentioned examples of projects implemented with detailed goals that contribute to their success. Finally, it is offered a conclusion of the theme.

II. Background

Although some feel that the issue of corporate social responsibility is recent, since the late 1940s discussions and questions relating to the matter had already been conducted in developed countries. In the USA, for example, the Fortune magazine, in several articles published between 1946 and 1950, published some content for the discussion, including thought provoking reflections and interviews with prominent executives of the time. From that time on, little by little, the discussion came to gain space and among various authors that began to discuss the topic in the United States. As an example, it is worth mentioning Howard R. Bowen, who in 1953 defined social responsibility:

“It refers to the Obligations of businessmen to Pursue Those policies, to make Those Decisions, or to follow lines of action which are desirable in terms of the objectives and values ​​of our society.”

 

It is worth noting that since that time the concept of social responsibility encompassed two basic pillars. One of the pillars is the performance and behavior of the company’s (management) when trying to reach its goals, outlined in the bylaws of the company and its effects towards its employees, whatever their hierarchical level is. A second pillar is the company’s perception on the necessity that its activity follows by principles of citizenship, ethical and sustainable principles in order to give longevity to the company’s operations without the imposition of irreversible risks to society and all stakeholders, in short the need to operate without compromising therefore the fruits to be harvested by future generation.

From this observation, we should reflect on how to support our employees in the fulfillment of their roles and in tracing their career paths. What inputs should be given to them in order to reinforce principles are corporate responsible and sustainable.

In the 1960s, the discussion on the topic continued to have its room both in academia and in the corporate arena mainly in developed countries. It is worth mentioning Keith Davis in US, who advocated the idea that the social power of the executive in the community in which its company operates should be proportional to its social responsibility towards it and that breaking this equilibrium should lead to the erosion of his social power. The society once aware of the need for this balance, would work also almost as an auditor on the activity of companies, their executives and the way they represent the interests of their companies. Executives when helping their companies to develops the business plan must always remind them of the need to contemplation of social responsible projects.

Back in the 1960s, other American writers have ratified the need for the company to start looking beyond their traditional corporate duties and aim like profits but try to adjust their efforts in a way that can contemplate their responability towards the society or at least the need of operating with no hard to the society. In his 1963 book, Business and Society, Joseph W. McGuire argues that:

 “The idea of ​​social responsibility supposes the corporation has not only economic and statutory obligation but Also Certain Responsibilities to society extend beyond Which These Obligations Which are desirable in terms of the objectives and values ​​of our society.”

 

It is noticed that, back in the 60s, for McGuire, “the idea of ​​social responsibility supposes that the company has not only economic and legal obligations, but also responsibilities that go beyond these ones, such as those to society.” It is in this environment that a company actually actively participate in the development of people and development of its community and why not in the nations where operate.

In the 1970s, the discussion continued and from that time it is worth quoting Harold Johnson, who, in his book, Business in Contemporary Society: Framework and Issues, in 1971, stated that a socially responsible company is one in which its managers balance between their goals a variety of interests from different participants in the market. According to him, rather than just seek higher profits for their shareholders, a company also takes into consideration: employees, suppliers, partners, local communities and ultimately the nation it serves.

After the clear understanding that was achieved in the 1970s on the corporate responsibility concept a responsible company was the one that saw the need to look beyond the corporate walls and objectives. Companies started to realize that imprinting a corporate social attitude brought greater benefits and advantages than just the “classical” ones such as profits. Companies in the 70s began to realize that socially responsible behavior involves much larger than just, for example, their engagement in philanthropic projects. Carroll, in US, quoted in one of his works that “corporate social responsibility” should involve the understanding that the conduct of business should seek to attain profitability in order to meet legal and ethical principles and in order to support the society, and that therefore, “corporate social responsibility” involves four pillars: economic, legal, ethical and philanthropic.

Socially responsible behavior require companies and executives, to have a holistic view in which, legal, ethical, philanthropic and economic dimensions take place. Thus, we strengthen the fundamentals that will guide our business.

Peter Drucker, a great reference for executives and managers, went even further, proposing a new way of looking at the challenge of acting in a socially responsible business.  In 1984 he mentioned:

“… the true social responsibility in business is to transform social problem in economic opportunity and economic benefit in productive capacity in human competence, into well-paid jobs, and ultimately in the production of wealth.”

Therefore, in 1980 after reaching this holistic vision of social responsibility, we begin to see the creation of several frameworks that allow companies to operationalize real actions / social responsibility projects.

All this movement and effort has been crowned in the late 1990s. In 1999 for example we saw the creation of the Dow Jones Sustainability Index, which later served as an example to other world markets. Also in France, in 2001, the New Code of Economic Regulation in its article 116 introduced the requirement for public companies on their balance sheets show the impacts of their activities on the environment and society.

Apart from what was what happening in the corporate world and in the market in US and Europe lately this matter begun to appear in some business courses.

III. Analysis

The research carried out for the present paper; besides literature, review encompasses the personal experience in implementing in Brazil corporate responsibility projects. When working as a Human Resources Director for an energy distribution company, controlled by the French company Eletricite’ de France, projects developed by the company in its surrounding with local communities proved that companies can generate economic and social value simultaneously with profits. This happens not only implementing philanthropic actions, but also from simple things such as dealing with employees on a daily basis and showing them that we assess, discuss and feedback not only about the projects assigned to them but also when discussing their career plan. The company when implementing community projects was helping people to rethink about their environment, social discrimination etc.

The importance that the Human Resources department has in dealing with social responsibility internally is enormous since it will issue and manage policies aligned to the company’s social goals. Items such as respect for citizens, the sense of justice and democracy (equal opportunity for all) processes, and career access opportunities are very important to create a good internal environment.

Some of the assumptions that have been established in the plan for implementation of social responsibility projects:

  • Ensure workers were focused in the company’s values​and goals;
  • Each unit should contribute their own experience to others so each project developed by the company would benefit from the experience;
  • Sustainable projects should not have competitors but partners: governments, Third Sector, Trade Unions and Companies should be thinking together;
  • We can be ambitious in our propositions once we have a clear strategy to accomplish them effectively;
  • There should be balance between internal and external social dimension;
  • We must take into account productivity and results, because the company must meet its economic reasons. One target should not sacrifice the other; and
  • Ethical behavior should be extended to suppliers, contractors, and all third parties interacting with the company.

It does not matter what type of corporate social responsibility project an enterprise decides to implement, some projects can be related to the core business of the company or it could prefer enterprise initiatives that promote the participation in the community in which it operates. The company as far as it contemplates corporate social responsibility projects will be gaining competitive advantage. Each company will determine the strategic fit of a project and the strategic fit will depend on the company taking into account their business plans and priorities. The discussion of strategic fit will push the company to determine the boundaries of a project, its objectives and resources to be allocated to it, the internal and external variables that will impact the project and its consequences and implications within and outside the organization.

Organizational success organizational conditions must be carefully considered in order to leverage corporate social responsibility projects. Factors such as: people, financial health of the company, organizational structure and technology are among the most important factors to be considered when planning a corporate social responsibility project.

A company also must be taken into account organizational culture, which is the complex set of values​​ and beliefs upon which the company operates, among them its ethics and its organizational climate.

When well developed corporative social responsibility projects will mobilize not only the internal agents of the company but also its consumers that will become more involved and aware of corporate activities. Trade relations in general will be exposed to the positive effect of the implementation of a corporate social responsibility project. Suppliers, clients and partners will tend to improve relationships with the company as a whole.

III. Conclusion

The sustainability actions should be always very important in the company’s agenda. The vision of corporate social responsibility must always take into account the three poles: economic, social and environmental. Therefore, there is no way to separate the ethics of social responsibility. Business decisions should be guided by integrity in relation to all persons and entities that provide her or receive her products and with the same importance, the effects that the production process can cause to the public.

Palestra proferida pelo autor em janeiro de 2015, na Dinamarca, no Conferência Mundial de Sustentabilidade.

E-mail para contato: alfredo.bottone@terra.com.br

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