As we see every day, companies spend huge amounts of money trying to be socially responsible. My first consideration concerns why companies are “socially” and “ethically” active and what are the main issues involved in corporate social responsibility (CSR).
There are many references to corporate social responsibility, sometimes called corporate citizenship, in our workplaces, in the media, in government, in our communities. Companies can be socially responsible in different dimensions: environmentally, economic contribution to the community, having progressive relationships with stakeholders, such as a commitment to consumer safety or demonstrating respect for human rights.
CSR means a company’s commitment to manage its role in a society in a responsible and sustainable manner (Akgeyik, 2005).
A series of events in recent years, such as the highly publicized financial scandals of Enron and WorldCom, the underground work of retail manufacturers of sportswear and footwear, and the “under the table” dealings that the companies have received. As a consequence, reputation, brand, integrity and trust are now increasingly seen as important measures of corporate social responsibility.
The main CSR issues that companies are taking seriously are those related to reputation and brand enhancement, accountability and transparency, risk management (managing investor confidence is another factor that supports the business case for CSR) and the “war for talents” based on labor shortages. in the next 10 to 25 years they make companies make a special effort to attract, develop, motivate and retain. Additionally, the war for talent is evidenced by an influx of “best places to work” awards. Therefore, a strong argument in favor of CSR is the management of talent both in the short and long term.
Consequently, CSR influences a company’s competitive advantage today through two key value drivers: 1) the company’s reputation and brand; and 2) human capital (Paul Lee, 2008) HR leaders have begun to take on leadership roles to address both areas.
For example, would the Enron and Worldcom incidents be noticed if the recruitment process identified and screened out in advance those managers who breached their legal duties and were caught in corrupt behavior?
HR has an important role in companies to achieve CSR standards. HR leaders can influence three main CSR standards: ethics, employment practices, and community involvement, which relate directly or indirectly to employees, customers, and the local community.
What kind of labor practices can be promoted in companies to be more CSR? Human resource management practices promote the personal and professional development of employees, diversity at all levels, and empowerment. Other human resource practices include: Viewing employees as valued partners, entitled to fair employment practices, competitive pay and benefits, and a safe, harassment-free, and family-friendly work environment.
What can HR leaders do to track the HR scorecard on CSR? Some ideas to be used as a checklist according to recent studies (Fenwick, 2008 & Lockwood, 2004)
• Create a strong organizational culture around the company’s core values.
• Scan the environment to identify potential threats (eg, competition for talent within the organization’s industry sector).
• Develop the personal and professional capacity of the workforce (eg, expand intellectual capital within the organization and in collaboration with other organizations).
• Include ethical concerns in staff performance measures.
• Support for participatory decision-making.
• Guarantee the highest standards in health and safety at work.
• Encourages active participation in community activities.
References:
– Akgeyik, T. (2005) The human resource management dimensions of corporate social responsibility in Turkey: a survey. Journal of the Academy of Business and Economics, January 2005.
– Fenwick, Tara and Bierema, Laura (2008), “Corporate Social Responsibility: Issues for Human Resource Development Professionals.” International Journal of Training and Development, Vol. 12, number 1, p. 24-35, March 2008.
-Lockwood, N.R. (2004). Corporate Social Responsibility: HR Leadership Role. SHRM, December. Obtained from [http://www.shrm.org/Research/quarterly/1204RQuart.asp#summary].
– Paul Lee, M. (2008). A review of corporate social responsibility theories: their evolutionary trajectory and the way forward. International Journal of Management Reviews, 10(1), 53-73.
– Trudel, R. and Cotte, J. (2008 5). Does being ethical pay? Wall Street Journal online, page R1.