Friday 21 December 2018

What is Corporate Social Responsibility (CSR)

Corporate Social Responsibility

A Corporate Social Responsibility is define as a business commitment to act ethically, operate legally and contribute to the improvement of the economy along with the improvement of the quality of life of employees and their families, local communities and society more broadly.

The World Business Council for Sustainable Development Corporate Social Responsibility as an extend commitment to sustainable business to behave ethically and contribute in economic development at the same time improve the quality of life the workforce and their families as well as local communities and society as a whole "Corporate Social Responsibility is the company's commitment to improving the well-being of the community through good business practices and contribute a portion of the company's resources".

CSR Corporate Social Responsibility as a business that is conduct in a transparent and open and base on moral values and uphold respect for the employees, community and environment.

Introduction to corporate social responsibility

So, we can conclude that Corporate Social Responsibility is the commitment of the company to contribute long term against one specific issue in the community or environment to be able to create a better environment. The contribution of these companies can be a lot of things, for example: funds, aid experts from companies, assistance in the form of goods, etc.

Here it is necessary to distinguish between the Corporate Social Responsibility program with the activities of the charity. The charity activities only take place once or a while and usually thus raises the public's reliance against the company. Meanwhile, the Corporate Social Responsibility program is an ongoing program and aims to create a public independence.

The company that runs its business model with rests on the principles of business ethics and the management of natural resource management the strategic and sustainable will be able to foster a positive image as well as gain the trust and Community support.

CSR sustainability & implement system

The Corporate Social Responsibility have the ability to improve the company's image. Because if the company runs its business with good corporate governance and follows the rules set by the Government. Then the Government and the community will provide leeway for such companies to operate in their territory.

The positive image it will be a very valuable asset for the company in maintaining. The sustainability of his life while undergoing a crisis see the importance of the implementation of Corporate Social Responsibility. In helping the company create the image plus the company should see Corporate Social Responsibility. It is not as cost centers (cost center) but as a center of profit (profit center) in the future.

Logically simple, if Corporate Social Responsibility is ignore then incident. Then the cost for cost recovery could be greater. Than the cost that would like to save with via counteraction Corporate Social Responsibility itself. This does not include non-financial risks in the form of deteriorating corporate image in the public eye.

The Five Pillars of the Corporate Social Responsibility Activities

In my research this time the concept of Corporate Social Responsibility will be measure using the five pillars of Corporate Social Responsibility activities of the Prince of Wales International Business Forum are:

  1. Building Human Capital: Internally, companies are expect to create a reliable HUMAN RESOURCES. Externally, companies are expect to do empowering communities, usually through community development.

  2. Strengthening Economies: Companies are expect to not be rich while the poor environment in the community, they should empower the economy around.

  3. Assessing Social Cession: Companies are expect to maintain harmony with the surrounding community in order not to cause conflict.

  4. Encouraging Good Governance: In running its business, the company should run the business with good governance.

  5. Protecting The Environment: The company working hard maintaining environmental sustainability.

Form of Corporate Social Responsibility Programs

Corporate Social Responsibility: Doing The Best for Your Company mentions some form of Corporate Social Program Responsibility to choose from, namely:

Cause target demographic Promotions

in the cause of this target demographic promotions company seek to increase the awareness of the community on a particular issue, where this issue should not be connect or related to the company's business lines, and then the company invites the public to contribute time, funds or their objects to help solve or prevent these problems.

In this targeted demographic promotions, cause the company could implement the program in their own or in collaboration with other institutions, for example: non-government organization.

Cause targeted demographic Promotions can be done in the form of:

Increasing awareness and concern societies against one particular issue.

Invite the community to find out in more depth about a particular issue in the community. Urge people to donate money, time or their belongings to help resolve and prevent a particular problem. Invite people to participate in the conduct of the particular event, for example: following the hike, signing petitions, etc.

Cause-Related Marketing

in a cause related marketing, companies will urge people to buy or use a product, be it goods or services, where most of the profits acquire companies will be donate to help overcome or prevent a specific problem.

Cause related marketing can be:

  • Each item sold, then the percent will be donate.

  • New account or account opening, then a few dollars will be donate.

Corporate Social Marketing

Corporate social marketing company is done with the aim to change the behavior of the society (behavioral changes) in a particular issue.

Typically corporate social marketing, focusing on areas below are:

  • The health field (health issues), such as: reducing the habit of smoking, HIV/AIDS, cancer, eating disorders, etc.

  • The field of safety (injury prevention issues), for example, safety drive, a reduction in the circulation of firearms, etc.

  • The field of the environment (environmental issues), for example: water conservation, pollution, the reduction of pesticide use.

  • Areas of the Community (community involvement issues), for example: Vote in the election, donating blood, the protection of animal rights, etc.

Corporate Philanthropy

The Corporate philanthropy may be a form of Corporate Social Responsibility. A corporate philanthropy is done by the company by contributing/donation directly in the form of funds, services or tools to the needs both of that individual or institution, a particular group.

Corporate philanthropy can do with donate:

Donate the money directly, for example: provides scholarships to children who cannot afford, etc.
Provide the goods/products, for example: providing relief equipment write for children studying in schools open, etc.

Deliver services, such as: immunization provides assistance to children in remote areas, etc.
Gives permission to use facilities or distribution lines own by the company, for example: a hotel provides a special room to be a showroom for the products of local folk crafts, etc.

Corporate Volunteering

Community Volunteering is a form of Corporate Social Responsibility where the company encourage or invite their employees get involve in the program of Corporate Social Responsibility that is being run with the way contribute time and energy.

Some form of community volunteering, namely:

  • Organizing Company employees to participate in the Corporate Social Responsibility program that is being run by the company, such as staff Faculty, etc.

  • The company provides support and information to employees to participate in programs of Corporate Social Responsibility that is being run by other institutions. Where Corporate Social Programs Responsibility for these tailor to the talents and interests of employees.
    Provide an opportunity (time) for employees to follow the activities of Corporate Social Responsibility at work, where the employee is still getting his salary.

  • Provide relief funds to places where employees are involve in its Corporate Social Responsibility program. The number of donate funds depends on the number of employee hours spent to follow Corporate Social Responsibility program in place.

Socially Responsible Business in a Socially responsible business, the company is making changes against one of its work or the whole system in order to reduce the harm to the environment and society.

Socially responsible business, can be done in the form of:

  • Improve the production process, for example: do the filtering against waste before was banish to the wild, to remove any substances that are harmful to the environment, using a wrapper that is recyclable (environmentally friendly).

  • Stop products that are dangerous but not illegal.

  • Just use a distributor who meets the requirements in the care for the environment.

  • Create limits age in conducting sales, for example, certain items will not be sold to children who are not yet 18 years of age.

The advantage of doing a Corporate Social Responsibility Program

In the book, "Dissected the concept and Application of CSR" outlines the 10 advantages that can be gained by the company If making Corporate Social Responsibility programs, namely:

maintain and boost the company's image and reputation of destructive Deeds will surely lower the reputation of the company, otherwise positive contribution will definitely boost positive image and reputation of the company. Image/positive imagery is important to support the success of the company.

Deserve a social license to operate

a community around is the main community enterprises. When they get the benefit of the company, then naturally they will feel to have company. So rewards are the company is the discretion to run its business in the region.

Reduces business risks Companies

Manage risk amid the complex problems of the company is essential to the success of the effort. With stakeholders will interfere with the smooth running of the business of the company. If the problem has already happen, then the cost for recovery will be much more double. When compare with the budget for the Corporate Social Responsibility program. Therefore, the implementation of Corporate Social Responsibility. As a preventive step to prevent a worsening of relations with stakeholders need to get attention.

Widen access to the resources

Of a good Track records in managing Corporate Social Responsibility. It is a competitive advantage for companies that can help smooth. The path to a resource that the company is require.

Expand access to Market

Investments that are cultivate for Corporate Social Responsibility programs can be a ticket to the company toward a greater opportunity. This includes fostering consumer loyalty and penetrate new market share.

Reduces the cost of

Many examples of cost savings that can be done by doing Corporate Social Responsibility. For example: with factory waste recycling into the production process. Besides being able to save production costs, also help so that this exile waste becomes safer for the environment.

Improve relations with Stakeholder

The implementation of Corporate Social Responsibility will help increase the frequency of communication with stakeholders. Where this communication will increasingly add to the trust stakeholders in the company.

Improve relations with Regulators

The company who carry out Corporate Social Responsibility generally will alleviate the burden of the Government as a regulator who is actually responsible for the well-being of the environment and the community.

Improve the morale and productivity of the employees

A good company Image in the eyes of stakeholders and a positive contribution. To the community and the company given the environment. It will give rise to the heartland for employees who work within their companies. Thus increasing the motivation of their work.

The chance of Getting

The number of awards the award or reward give to the perpetrators of the Corporate Social Responsibility. Now, will add up to the company to get the award.

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