Corporate responsibility describes a company’s responsibility to those that it affects. This can include customers, clients, staff, the local community, the environment and investors. Managing these responsibilities is important not only from an ethical standpoint but also in terms of the success of the business.
Corporate social responsibility refers to the fact that businesses have a responsibility to groups and individuals that it can affect. That means that it has a responsibility to the environment and the culture around the business geographically, it means that it has responsibilities to its stakeholders and its investors. It has a responsibility to employees and of course it also has a responsibility to customers.
Businesses are large organizations which in some case wield almost as much power as entire countries or states. When you take this into account, it becomes apparent just how much good – or ill – a company is capable of doing. Considering this is crucial for many reasons, so read on to learn more.
Understanding Corporate Impact
There can be no question that corporations can seriously damage the environment and put people's health or even life at stake. Much of the time, the impact on the environment and the people within that environment are intertwined. In Africa, there have been actual tribes of people that have been wiped out due to logging, gold mining and oil drilling.
All kinds of industries can have an impact on the environment. Fishing, mining, manufacturer of chemicals and dozens more affect the global environment every day, due to damage to a local ecosystem. Permanent damage to these ecosystems can affect the entire world.
Unfortunately, manufacturing and corporations as a whole have contributed a great deal to the deterioration of the environment, and while it is difficult to find a specific person, or even sometimes a specific company to blame, most people have no doubt that Corporate America as a whole has the most fingers pointed at it.
But that's exactly why corporations are now creating policies and initiatives that have a positive impact on their environment. This doesn't necessarily mean that the company is guilty of anything or has contributed to environmental deterioration in the past. In fact, much of the time, the companies that start these projects and create these initiatives have almost nothing to do with harming the environment because their policies already prevented that.
But these companies are trying to. make a positive impact on the environment and the people in it; in order to make up for what other corporations have done in the past. Many corporations have decided that it doesn't matter who's to blame for the state of the world, the task now is to figure out a way to change it. One of the most famous corporations with policies like this is Google. They have a motto: don't be evil.
Why Corporate Social Responsibility Is Happening
It would be difficult to point to a single reason why CSR is happening across the board with so many companies. Of course, some corporations still continue their policies that allow environmental damage, within the law, but most have stepped up. However, in many cases, it is not just because the people in the boardroom have good hearts. It is actually because of the internet.
It is easier to make the corporations accountable
In the past, it was difficult for communities that had been affected to do anything to make the corporation accountable for their actions. The large corporation that is harming the community and no one can do anything about it has even become somewhat common of a trope in television series and movies. But some of the stuff that has happened in the past isn't fiction.
The reason one of the reasons that companies are starting to develop policies that makes them more socially responsible is that it has gotten very hard to hide such activity. That's because of the internet. People posting on forums, blogs and across social media can make something like a corporation poisoning a river into a viral cause that millions of people get behind.
That's not to say that there aren't companies out there that actually do want to help and feel like as their responsibility to be socially responsible and not just because they can't hide it anymore. However, there is no doubt that the internet and social media in particular has made it more difficult for companies to do what they like.
Now companies are making the people in their community and the environment around them their primary responsibilities. In fact, organizations have been using the motto ‘people then planet then profit’.
Affect social change
The very simplest form of CSR is giving money to charities that help people in the environment. But companies can do a lot more. Corporations are powerful entities with influence over some of the top people in government, in the business world and in the media. These things can definitely affect social change.
But companies can also try to get out of industries that are destroying the environment, or at least make sure that they are taking every safety precaution possible. Many companies are willing to do this. They are willing to take a hit on the bottom line if it means that people stay healthy and the environment isn't damaged by their action.
Companies can also set an example. Changing the world starts with how you treat a single person. How many companies are taking steps to improve policies, especially sexual sexual harassment or racism in the workplace, Removing unfair hiring practices or promotion policies and basically treating everyone the same? The way it's always been done should not be the only way to do things.
In addition, companies can make changes in their own local communities. For example, large corporations can invest in local communities, especially if they are having a negative impact on that community in some way. If a company is logging or mining within a community, they should consider looking at what a town needs, and try to help with that. This could be anything from offering grants to local businesses that are struggling to building hospitals, schools or in the poorest parts of the world, providing food and shelter.
there are so many things that companies can do to change the world right from within their own organization that it would be impossible to list them all here. A few more ideas include making a real effort to have a diverse workforce and offering the best qualified person the job, offering family-friendly services and benefits like childcare at the company, maternity leave and paternity leave that is paid, as well as cleaning up around the city, helping to combat crime or hiring within that community if possible.
Example: Blood Diamonds
One of the areas where corporations have been called out for affecting people indirectly is the diamond industry. The diamond industry definitely benefits from the conflicts within their supply chain. This has caused some people to call them blood diamonds. Diamonds that come from war zones are often sold by rebels so that they can have money for their war effort. Often, the products that are sold from these war zones are created through the use of child labor. There are many areas around the world where this is the case, and diamond companies have begun to take steps to remove those sources from their supply chain and demonstrate corporate social responsibility.
CSR Policies
Companies are being called out for using business models that people have known were harmful for decades. Creating corporate social responsibility policies allows companies not only to mitigate any damage that they might have done in the past to the environment or the people of the world, but it also allows them to help to mitigate harm done by other corporations that may not be as progressive.
In addition, by creating these policies, companies show that they are willing to take steps and be a leader among their peer; to create a new business model where the planet we live on in the people that live on it are more important than the bottom line. Today’s entrepreneurs were yesterday's children affected by corporations, and so many businesses now base their entire model around affecting the environment.
With social media platforms ready to carry the message of any group affected by a larger organization, and plenty of people willing to cry out when that sort of bullying happens, corporations are going to have to create these policies and adhere to them or else they are going to find themselves losing money anyway. The internet has changed everything, but it has definitely changed things for the better, and if it can get companies to come up with CSR policies and implement them, that’s a very good thing.
Is Your Business Responsible?
There are two types of businesse:
- There are those that set out to try and make a profit by any means possible and will sell their soul if necessary to do so, and there
- are those that are trying to do something good, great or fun and that care more about the product than the margins.
As a web entrepreneur or business professional can you answer honestly which one you are and why you fall into that category? The reason I put this question to you, is that if you are currently working towards nothing but the bottom line then ironically that can actually be worse for business, and in countless ways being a GOOD business is actually better for business.
In other words, ethical business is generally actually more efficient business in the long term. Being efficient, polite, good to your staff and maintaining integrity - they're all great assets that are worth an awful lot to your company in the long run.
Why Being Good is Good for Business
If you were to travel into a Dickensian Christmas and ask Scrooge how business was going you'd probably find it could be better. Mistreating his staff would right away mean that they felt no loyalty to the company and that they would not be too bothered to work as hard as they possibly could. Output would be lower, and his best employees would leave him for better offers.
The same could be said for Mr. Burns of Springfield. His lack of concern for the environment would put a lot of investors off and mean that the discerning customer chose to get their energy from elsewhere. When buying two lots of eggs for a similar price which are you more likely to pick - free range or battery? In this sense what goes around comes around, even for big business and by being a good business people will want to work with you and they'll want you to do well. In a very basic sense if you provide a better job for someone when you build them a new bathroom, and if you provide extra work and services for free when something goes wrong then they will be ten times as likely to spread the good word to their friends and get you more work as a result.
The Downhill Slope
The problem is that so many businesses start out with good intentions but then begin to cut corners once the going gets tough or once they grow. Often the problem is that there is a conflict of interests between the parties that the business can affect.
For instance, a big business that has a lot of investors might be pressured to increase profit margins. It might do this by getting its materials from a more affordable but less sustainable source. Or perhaps it might try to decrease overheads by reducing the amount of product in its packages, without reducing the price. For a while, the profits go up and the company will satisfy its investors.
But the first scenario ignores the corporate social responsibility to the environment. And the latter scenario ignores the responsibility to the customer. Both can end up being counterproductive in the long term – as fewer people use the business and this ultimately ends up harming the reputation and harming the profits.
Another reason this can happen is due to weak leadership. As companies grow, they often lose their centralized leadership and instead power is distributed across the company. Decisions are made by committee and this triggers a psychological effect called diffusion of responsibility – where people feel less responsible for their decisions because they are sharing that responsibility with other decision makers. Not only that, but ‘groupthink’ means that the direction of the company may be decided by those that shout loudest – rather than what is most important.
7 Tips For A Better CSR
So, what can you do to prevent this happening as your business grows? The answer is to have a vision and a ‘why’. Watch Simon Sinek’s talk on the Golden Circle and consider coming up with a mission statement. Remember why your business originally came into being: what inspired its creation? What were you trying to accomplish? Who were you trying to help? How do you offer value that no other business offers?
Stay on this message and don’t allow yourself to be side-tracked by pressure from investors. Remember why your business exists and make all decisions going forward through this lens.
Here are some tips for things you can do in the short term, too:
- Use sustainable materials and supplies
- Be good to your staff, develop them and give them flexible working arrangements
- Work with your local community and help support them (good community relations)
- Always provide value
- Offer the best customer service possible
- Don’t cut corners
- Reduce your emissions – travel less, use efficient appliances
You can even go one step further and create a department in your business dedicated to keeping your business ethical.
How Ethical Business Affects the Internet
If your business is an online one, that in turn means your unlikely to be harming many hens. So how can you be a 'good business' online?
Be white hat: The battle between white hat and black hat SEO is as old and timeless as the battle between the Jedi and the Sith. White hat SEO basically means subtle use of keywords and steering away from article spinners. In other words, you put the quality before the SEO and this benefits you in many ways - meaning you get repeat visitors and your articles shared and meaning that Google won't penalize you in new updates. Providing great content means aligning your goals with those of Google.
Promote the right stuff: If you want to make a quick buck on the web, the promoting gambling, sex sites or steroids is one way to go. Alternatively, you could promote techniques for getting abs that don’t really work (*cough* Six Pack Shortcuts *cough*).
But while this can make money in the short term, it ultimately damages your reputation and reduces the likelihood that big brands will want to associate with you in future. You limit your scalability by selling out in the short term. It also means that you/your staff will spend their days writing about sex toys and steroids.
Give stuff away: Giving things away free is one of the number one ways to draw visitors to your site. They get something out of it, and you free promotion and other ways of making money such as putting adverts in Android apps.
Support a charity: This helps people to want to support your site, and it also means you get extra promotion. When people visit your site/buy your products they will feel as though they are doing a good thing which is an association that will make them want to visit your site more.
Choose your associations: Ever been approached by advertisers wanting to promote steroids or Viagra through your website? No amount of remuneration here is worth the damage it will do to your reputation and your integrity and some filters may even block your site as a result and thus shrink your market.
Spend more: Spending more on writing and design services for a website not only helps the economy, but also results in a more polished and honed site than if you had cut corners and gotten it done on the cheap.
