Why organisations cannot ignore their social responsibilities

Many organisations operate Corporate Social Responsibility (CSR) programmes, which fund social and environmental campaigns. While…...

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Many organisations operate Corporate Social Responsibility (CSR) programmes, which fund social and environmental campaigns. While some claim these are merely used by public relations to boost brand image and reputation, others state that these organisations have legitimate intentions to help the communities in which they operate.

CSR in a modern world

Opponents of CSR claim that this responsibility has no role in a capitalist society, as the organisation’s main responsibility is to its stakeholders. So, if a company uses resources for CSR, and does not generate financial wealth for its stakeholders, it is a waste of those resources.

However, many companies are leaning towards shared value, where the company creates value for itself and this, in turn, creates value for society. A good example is Cisco, which operates the Cisco Academies to train its networking staff. It is a win-win situation for the organisation and employees, and therefore, shared value. Another example is Nestle, creating milk districts in India, China, and Pakistan to procure milk for its products. Both organisations have improved societal infrastructure and have benefitted from it. Smaller organisations cannot afford to take the same route, as the risk of their competitors benefitting from the investments they make is high. Such a company would only focus on CSR if it can get a major share of the value it generates. Such companies will instead focus on their supply chain and distribution partners and it is crucial for all organisations to do so.

CSR in procurement

Organisations should check their supply chain to ensure they opt for socially responsible procurement. It is not just about being responsible for your financial performance, but also for your social and environmental performance.

If you ensure that the entire supply chain works in accordance with the social values of the organisation, you will enjoy socially responsible procurement. For this, CPOs should have clear rules for procurement. The rules should be in sync with the social values of the organisation, as well as with the various laws and regulations.

Things that procurement can focus on to ensure socially responsible procurement include ensuring labour safety, environment preservation, eliminating modern-day slavery, and proper working conditions for labour throughout the supply chain. In a connected world, it has become harder for organisations to ignore their role in creating value for the communities in which they operate and society as a whole. An organisation cannot thrive in a silo.

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