The technological advancements as well as globalization have necessitated localized organizations and companies to traverse the globe and increase their market share. In this regard, the heterogeneity of their workforce and communities/societies with which they operate pose a lot challenges to their long term survival and business success. It is for this reason that the concepts of corporate governance and corporate social responsibility have become popular within the management circles of most organizations. Corporate Social Responsibility (CSR) can be referred to as the 'continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of their workforce and their families as well as of the local community and society at large'. (CSR Meeting Changing Expectations)
In particular, corporate social responsibility has been widely popularized across United States, Europe, and Canada and it is possible to develop a CSR program for any organization so as to demonstrate dedication to sustainable development regardless of the size of the company.
Relevance of a CSR program
In today's business environment, corporate social responsibility does not only lead to sustainable development of the economy, environment, and community, but also the individual organization that implements it (Christie, 2009). The major reason cited for developing and implementing CSR is the classical win-win opportunity for both the business and the community/society as a result of implementing a CSR program include; First, there is increased financial performance -companies that develop and implement CSR programs are more profitable because of their engagement in societal activities depicts more business opportunities with resultant effectiveness in resource management.
Secondly, the organization's or company's image among potential and current investors is generally improved. It cannot be taken for granted that investors assess a company's corporate CSR and sustainability as the determining factors in choosing investments. Hence, this facilitates improved access to funds for acquisition and expansion. Third, an organization has an enhanced employee commitment. The reason being CSR is capable of leading to enhanced employee morale and retention. Fourth, there is enhanced relationship between the organization and the stakeholders. Generally, the corporate social responsibility programs incorporates the performance and improvements for stakeholders thereby leading to more engagement and reduced chances of hostile relations with, and litigation by, stakeholders. Fifth, there is improved branding which comes about as a result of increased business among the socially concerned customers. This forms a wind form of loyalty among varied customer groups (Christie, 2009).
Issues Addressed by CSR program
A number of issues are covered in a CSR program but this is dependant on an organization's activities, its scope of operations as well as the industry in which it lies. However, a CSR program encompasses the human rights, environment, community involvement, strategic vision, ethics/anti-corruption, and workforce/labor relations.
Corporate Governance versus Corporate Social Responsibility
Painter-Morland (2006) in his work argues that to successfully develop and implement CSR, there has to be consideration for corporate governance. According to the author, corporate governance forms one of the major fundamental pillars in CSR in order to achieve appreciable competitive advantage in business activities. Painter-Morland (2006) goes on further to identify three areas in which majority of the companies fail to accomplish competitive advantage as a result of having ineffective CSR programs: failure to engage the stakeholders in development and implementation of the CSR program; failure to have integrity in various organizational practices; and failure by stakeholders to persistently pressurize the organization to keep its promises. In this respect, Koegel (2007).agrees with Painter-Morland (2006) that adopting the right corporate governance may come in handy to facilitate an organization develop and implement a comprehensive program that impacts all levels of the organizations operations.
The aforementioned considerations sufficiently 'elucidate the role of corporate governance in developing a CSR program for competitive advantage' (Stephenson, 2009, p. 255). Therefore, a proper infrastructure that will facilitate in developing and monitoring CSR is supposed to be given priority by the management/leadership.
In another perspective, communication is regarded as another factor in the process of making use of corporate governance as a base for developing and implementing CSR. It is therefore critical for the management in any organization to continuously 'engage in effective communication to develop implement CSR programs' (Ibid, 2009, p. 256). Such effective communication processes avails the necessary information and support to internal stakeholders so that they strengthen their CSR programs. Failure to have the necessary information, indiviudlas within a company do not has access to resources and tools required in successful implementation of CSR programs. Stephenson, (2009) goes on further to argue that instituting CSR programs calls for a top down approach in some extent. Therefore, corporate governance has to set the pace for creation of CSR both through the use of modeling and provisioning of resources.
The Company Stakeholders
The rapid globalization process, driven by IT advancements, has led to the creation of global operating environment for companies and organizations. Therefore, in their corporate strategies, organizations define and consider 'global stakeholders'. In this regard, Beth and Ruggie (2005), refers to a corporate stakeholder as that individual group or organization that can place a claim on company's attention, resources, and output. Corporate stakeholders are therefore capable and in a better position to challenge the corporate behavior and hence become part and parcel of the organization. Although a number of multinationals practice local stakeholder engagement within their countries of origin, via investing in local charities, and outreach activities, they face stiff challenges in the global arena as they mingle with global stakeholders who are culturally heterogeneous.
Besides, the challenges are heightened by weak regulatory policies and implementation framework, corruption and inadequacy in social services provision. Subsequently, the dynamics of global stakeholders are energized more by the activities of civil society groups who can challenge corporate behaviors to be changed via boycott and protests. Thus a dynamic system is created within which corporate are expected to operate and thereby posing new opportunities as well as risks. This is illustrated in the figure below.
Note: Beth, K. & Ruggie, J. G. 2005. Corporate Social Responsibility as Risk Management: A Model for Multinationals. Corporate Social Responsibility Initiative Working Paper, 10, 1-21.
In summary, stakeholders encompass the government, customers, employees, shareholders, media, business partners, interest groups, ad the community at large.
Developing and Implementing a Corporate Social Responsibility
In their article, Boyd et al. (2006) have focused on integrated global supply chain which they take a closer look at incorporating CSR in the Global Supply Chain. In addition, the author differs from the usual perception of many in regard to increasing CSR compliance instead of constant monitoring of its implementation. This would provide what they call procedural justice or fairness hence rendering decisions made to be ethical, transparent, correctable, and unbiased. A CSR implementation model consists of four stages; CSR review/audit, CSR strategy, Implementation as well as Repotting and Verification. This is cyclic-based model and is applicable to a wide range of organizations.
In the first stage, a CSR audit/review is done aimed at establishing the needs of an organization and relevance of the CSR program. Besides, this encompasses research on social, environmental, and political issues which face the organization's competition in the particular industrial sector. Upon carrying out such review process, the task now shifts into developing a CSR strategy which integrates both the profitability interest of the company and its public duty. The strategy is basically a plan for accomplishing the organization's set goals and objectives. At this stage, Stephenson, (2009) argue that a company/organization is supposed to institute measures for assessing the 'social risks' it is predisposed to and come up with ways in which it can manage such risks. In conceptualized model, the Beth and Ruggie (2005) argues that establishing and understanding threats, vulnerabilities, and countermeasures for such risks forms the basis of risk management. Subsequently, stakeholders are identified as a valuable tool for identifying social risks based on the fact that they have invaluable information. This will entail engaging the global stakeholders in the CSR program and this can be illustrated as in the figure below.
Figre 2. Stakeholder engagement model
Note: Beth, K. & Ruggie, J. G. 2005. Corporate Social Responsibility as Risk Management: A Model for Multinationals. Corporate Social Responsibility Initiative Working Paper, 10, 1-21.
The third stage in the CSR program implementation process involves a wide range of factors to ensure success of the CSR strategy. Both regulatory and implementation processes are critical and they are supposed to be supported by formal/informal corporate culture within the organization. In the first instance, an efficient structure for decision making involves all the stakeholders within the organization is critical. The kind of organization culture established in an organization sets the pace for what will continue to be done in the future. Some organizations sets up committees mandated with CSR decision-making thereby becoming more centralized. Subsequently, an action plan which in this regard, is precisely practical should be adopted and executed so that CSR strategy and the decision making framework bears fruits (Beth and Ruggie (2005). In the same note, as Rama et al., (2009) argues the action plan should encompass key performance indicators, targets and timeframe within which they are supposed to achieved.
Subsequently, last bit in the implementation process entails integrating the CSR strategy and organization culture. A form of balance and consistency between the two should prevail.
Finally, the last stage entails evaluation and monitoring processes of the CSR program. In this regard, the effectiveness as time passes is assessed and reported in form of publication especially to the stakeholders. This acts as a way of portraying transparency within the organization. Therefore, the image and reputation of the company improves among potential investors. On the other hand, as the Rama et al., 2009 argues, in his study, of global chain supply, sustainability reporting and sustainable development would be realized and comes in handy at improving the economic status/performance of the organization. This can as well be regarded as a form of social reporting
Code of Conduct
Boyd et al. (2007) identifies the code of conduct with respect to CSR as policies and/or procedures that governs an organization's corporate behavior. The intentions of an organization's CSR program are clearly outlined in the code of conduct and in addition relationships and responsibilities between stakeholders are specified (Rama et al., 2009).
Recommendations
To successfully implement CSR program, in any given organization, I would recommend the need to have capacity development in various aspects; individual capacity, organizational capacity, collaborative capacity, and an enabling environment capacity (Rama et al., 2009). The enabling-environment-capacity encompasses the elements of the wider social, economic, and political environments. In the second instance, having a collaborative capacity among various stakeholders such as customers, employees would come in handy at improving cohesive with the organization. On the other hand, organization's structures, leadership, incentives, and communication systems fall under the organizational capacity and they go hand in hand with collaborative capacity. The final precaution to any organization embarking on a CSR program is the individual capacity. This entails the professionalism of the management in solving problems, participating in decision making as well as being full fully conversant and responsible in their roles.
Conclusion
Considering the above discussed scenarios, it is evident that CSR programs improve the finical performance of a company and to large extent t based on its improved image and reputation among the public. Nevertheless, it is important to ore that achieving considerable competitive advantages via CSR must involve this process at each level of organization options.
