Corporate Policy, Values and Social Responsibility

Our company's existence is not lonely. It's part of a bigger system of people, values, other organizations and nature. The social responsibility of a business is to.
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For instance, incidents like the Savar building collapse , which killed over people, pushed companies to consider the impacts of their operations on society and environment. On the other side, the horse meat scandal of in the United Kingdom affected many food retailers, including Tesco, the largest retailer in the United Kingdom, [43] leading to the dismissal of the supplier.

Corporate social irresponsibility from both the suppliers and the retailers has greatly affected the stakeholders who lost trust for the affected business entities, and despite the fact that sometimes it's not directly undertaken by the companies, they become accountable to the stakeholders. These surrounding issues have prompted supply chain management to consider the corporate social responsibility context. Wieland and Handfield suggested that companies need to include social responsibility in their reviews of component quality.

They highlighted the use of technology in improving visibility across the supply chain. Corporate social responsibility includes six types of corporate social initiatives: All six of the corporate initiatives are forms of corporate citizenship. However, only some of these CSR activities rise to the level of cause marketing , defined as "a type of corporate social responsibility CSR in which a company's promotional campaign has the dual purpose of increasing profitability while bettering society.

Companies generally do not have a profit motive when participating in corporate philanthropy and community volunteering. On the other hand, the remaining corporate social initiatives can be examples of cause marketing, in which there is both a societal interest and profit motive.

CSR may be based within the human resources , business development or public relations departments of an organisation, [47] or may be a separate unit reporting to the CEO or the board of directors. An engagement plan can assist in reaching a desired audience. A corporate social responsibility individual or team plans the goals and objectives of the organization.

As with any corporate activity, a defined budget demonstrates commitment and scales the program's relative importance. Social accounting is the communication of social and environmental effects of a company's economic actions to particular interest groups within society and to society at large. Social accounting emphasizes the notion of corporate accountability. Crowther defines social accounting as "an approach to reporting a firm's activities which stresses the need for the identification of socially relevant behavior, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques.

In nations such as France, legal requirements for social accounting, auditing and reporting exist, though international or national agreement on meaningful measurements of social and environmental performance has not been achieved. Many companies produce externally audited annual reports that cover Sustainable Development and CSR issues "Triple Bottom Line Reports" , but the reports vary widely in format, style, and evaluation methodology even within the same industry.

Critics dismiss these reports as lip service, citing examples such as Enron 's yearly "Corporate Responsibility Annual Report" and tobacco companies' social reports. In South Africa, as of June , all companies listed on the Johannesburg Stock Exchange JSE were required to produce an integrated report in place of an annual financial report and sustainability report. This requirement was implemented in the absence of formal or legal standards. One of the reputable institutions that capital markets turn to for credible sustainability reports is the Carbon Disclosure Project , or CDP.

Corporate social responsibility and its resulting reports and efforts should be verified by the consumer of the goods and services. Due to an increased awareness of the need for CSR, many industries have their own verification resources. The United Nations also provides frameworks not only for verification, but for reporting of human rights violations in corporate supply chains. The rise of ethics training inside corporations, some of it required by government regulation, has helped CSR to spread.

The aim of such training is to help employees make ethical decisions when the answers are unclear. Organizations see increased employee loyalty and pride in the organization. Common CSR actions include: Social License to Operate can be determined as a contractual grounds for the legitimacy of activities and projects company is involved in.

As stated in Enduring value: Unless a company earns and maintains that license social license holders may intend to block project developments; employees may leave the company for a company that is a better corporate citizen: The primary objective for the companies is to obtain and maintain the Social License to Operate. Based on the Requisite Organization research of Dr. Elliott Jaques to achieve this goal a company needs to:. A large body of literature exhorts business to adopt non-financial measures of success e.

Environment

The business case for CSR [79] within a company employs one or more of these arguments:. Profit is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital unlike accounting definitions of profit. This measure was claimed to help some companies be more conscious of their social and moral responsibilities. Another criticism is about the absence of a standard auditing procedure. The term was coined by John Elkington in A CSR program can be an aid to recruitment and retention , [84] [85] particularly within the competitive graduate student market.

Potential recruits often consider a firm's CSR policy. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving , fundraising activities or community volunteering. CSR has been credited with encouraging customer orientation among customer-facing employees.

CSR is known for impacting employee turnover.

Corporate Social Responsibility Policy and Code of Conduct

Several executives suggest that employees are their most valuable asset and that the ability to retain them leads to organization success. Socially responsible activities promote fairness, which in turn generate lower employee turnover. On the other hand, if an irresponsible behavior is demonstrated by a firm, employees may view this behavior as negative.

Proponents argue that treating employees well with competitive pay and good benefits is seen as a socially responsible behavior and therefore reduces employee turnover. This interest is driven particularly by the realization that a positive work environment can result in desirable outcomes such as more favorable job attitudes and increased work performance. The authors noted that while developing and implementing a CSR strategy represents a unique opportunity to benefit the company. The survey's authors also stated that employee engagement on CSR initiatives can be a powerful recruitment and retention tool.

As a result, employees tend to discard employers with a bad reputation. Managing risk is an important executive responsibility. Reputations that take decades to build up can be ruined in hours through corruption scandals or environmental accidents. CSR can limit these risks. CSR can help build customer loyalty based on distinctive ethical values. Some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions as another form of advertising.

Companies that operate strong CSR activities tend to drive customer's attention to buy products or services regardless of the price. As a result, this increases competition among firms since customers are aware of the company's CSR practices. These initiatives serve as a potential differentiator because they not only add value to the company, but also to the products or services.

Furthermore, firms under intense competition are able to leverage CSR to increase the impact of their distribution on the firm's performance. Lowering the carbon footprint of a firm's distribution network or engaging in fair trade are potential differentiators to lower costs and increase profits. In this scenario, customers can observe the company's commitment to CSR while increasing company sales. Whole Foods ' marketing and promotion of organic foods have had a positive effect on the supermarket industry.

Proponents assert that Whole Foods has been able to work with its suppliers to improve animal treatment and quality of meat offered in their stores. They also promote local agricultures in over 2, independent farms to maintain their line of sustainable organic produce. As a result, Whole Foods' high prices do not turn customers away from shopping.

In fact, they are pleased buying organic products that come from sustainable practices. Theater one focuses on philanthropy, which includes donations of money or equipment to non-profit organizations, engagement with communities' initiatives and employee volunteering.

This is characterized as the "soul" of a company, expressing the social and environmental priorities of the founders. The authors assert that companies engage in CSR because they are an integral part of the society. This program provides critical school readiness resources to underserved communities where PNC operates. On the other hand, theater two focuses on improving operational effectiveness in the workplace.

The researchers assert that programs in this theater strive to deliver social or environmental benefits to support a company's operation across the value chain by improving efficiency. Some of the examples mentioned include sustainability initiatives to reduce resource use, waste, and emission that could potentially reduce costs. It also calls for investing in employee work conditions such as health care and education which may enhance productivity and retention. Unlike philanthropic giving, which is evaluated by its social and environmental return, initiatives in the second theater are predicted to improve the corporate bottom line with social value.

Bimbo , the largest bakery in Mexico , is an excellent example of this theater. The company strives to meet social welfare needs. It offers free educational service to help employees complete high school. Bimbo also provides supplementary medical care and financial assistance to close gaps in the government health coverage. Moreover, the third theater program aims to transform the business model. Basically, companies create new forms of business to address social or environmental challenges that will lead to financial returns in the long run.

One example can be seen in Unilever's Project Shakti in India. The authors describe that the company hires women in villages and provides them with micro-finance loans to sell soaps, oils, detergents, and other products door-to-door. This research indicates that more than 65, women entrepreneurs are doubling their incomes while increasing rural access and hygiene in Indian villages. As a consequence, the company wants to introduce a new model to collect and recycle old furniture. Corporations are keen to avoid interference in their business through taxation or regulations.

A CSR program can persuade governments and the public that a company takes health and safety , diversity and the environment seriously, reducing the likelihood that company practices will be closely monitored. Appropriate CSR programs can increase the attractiveness of supplier firms to potential customer corporations.


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CSR concerns include its relationship to the purpose of business and the motives for engaging in it. Milton Friedman and others argued that a corporation's purpose is to maximize returns to its shareholders and that obeying the laws of the jurisdictions within which it operates constitutes socially responsible behavior. While some CSR supporters claim that companies practicing CSR, especially in developing countries, are less likely to exploit workers and communities, critics claim that CSR itself imposes outside values on local communities with unpredictable outcomes.

Better governmental regulation and enforcement, rather than voluntary measures, are an alternative to CSR that moves decision-making and resource allocation from public to private bodies. Some critics believe that CSR programs are undertaken by companies to distract the public from ethical questions posed by their core operations.

They argue that the reputational benefits that CSR companies receive cited above as a benefit to the corporation demonstrate the hypocrisy of the approach. Others have argued that the primary purpose of CSR is to provide legitimacy to the power of businesses.

Bakan [] is one of the most prominent critics of the conflict of interest between private profit and public good, and his argument is summarised by Haynes that "a corporate calculus exists in which costs are pushed onto both workers, consumers and the environment".

Indeed, it has been argued that there is a "halo effect" in terms of CSR spending. Aguinis and Glavas conducted a comprehensive review of CSR literature, covering academic sources from numerous fields including organizational behaviour , corporate strategy , marketing and HRM.

It was found that the primary reason for firms to engage in CSR were the expected financial benefits associated with CSR, rather than being motivated a desire to be responsible to society. CEOs' political ideologies are evident manifestations of their different personal views. Each CEO may exercise different powers according to their organizational outcomes. In fact, their political ideologies are expected to influence their preferences for the CSR outcomes. Proponents argue that politically liberal CEOs will envision the practice of CSR as beneficial and desirable to increase a firm's reputation.

They tend to focus more on how the firm can meet the needs of the society. As a consequence, they will advance with the practice of CSR while adding value to the firm. On the other hand, property rights may be more relevant to conservative CEOs. Since conservatives tend to value free markets, individualism and call for a respect of authority, they will not likely envision this practice as often as those identifying as liberals might. The financials of the company and the practice of CSR also have a positive relationship.

Moreover, the performance of a company tends to influence conservatives more likely than liberals. While not seeing it from the financial performance point of view, liberals tend to hold a view that CSR adds to the business triple bottom line. For instance, when the company is performing well, they will most likely promote CSR. If the company is not performing as expected, they will rather tend to emphasize this practice because they will potentially envision it as a way to add value to the business.

In contrast, politically conservative CEOs will tend to support the practice of CSR if they hold a view that it will provide a good return to the financials of the company. In other words, this type of executives tend to not see the outcome of CSR as a value to the company if it does not provide anything in exchange. There have been unsubstantiated social efforts, ethical claims, and outright greenwashing by some companies that has resulted in increasing consumer cynicism and mistrust. For example, McDonald's Corporation positioned its association with Ronald McDonald House and other children's charities as CSR [] while its meals have been accused of promoting poor eating habits.

Acts which may initially appear to be altruistic CSR may have ulterior motives. The funding of scientific research projects has been used as a source of misdirection by firms. Prusiner , who discovered the protein responsible of CJD and won of the Nobel prize in Medicine, thanks the tobacco company RJ Reynolds for their crucial support.

Proctor states that "the tobacco industry was the leading funder of research into genetics, viruses, immunology, air pollution" [] anything which formed a distraction from the well-established research linking smoking and cancer. Research has also found that corporate social marketing , a form of CSR promoting societal good, is being used to direct criticism away from the damaging practices of the alcohol industry.

Ambitions:

Companies may engage in CSR and social marketing in this case to prevent more stringent government legislation on alcohol marketing. Industries such as tobacco, alcohol or munitions firms make products that damage their consumers or the environment. Such firms may engage in the same philanthropic activities as those in other industries. This duality complicates assessments of such firms with respect to CSR. Textile company Kitex has taken over the administration of an entire Indian village called Kizhakkambalam near Cochin by winning the local body elections.

Environmentalists and mainstream politicians of India point out that this can lead to a dangerous precedent because the company got actively involved in CSR only after they were caught red-handed in polluting the village. Branco and Rodrigues describe the stakeholder perspective of CSR as the set of views of corporate responsibility held by all groups or constituents with a relationship to the firm.

The stakeholder perspective fails to acknowledge the complexity of network interactions that can occur in cross-sector partnerships. It relegates communication to a maintenance function, similar to the exchange perspective. The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. One issue with the consumer's relationship with CSR is that it is much more complex than it first appears.

This indicates that there is a clear discrepancy between consumer beliefs and intentions, and actual consumer behaviour, so that when it comes down to their actual purchase behaviour, CSR has a much lesser impact than consumers initially say it does. One theory put forward for explaining the "CSR-Consumer Paradox" is that of "bystander apathy" or the bystander effect.

So even if a consumer is against the use of sweatshops or wants to support green causes, they may continue to make purchases from companies that are socially irresponsible just because other consumers seem apathetic towards the issue. A second explanation issued by Janssen and Vanhamme is that of reciprocal altruism.


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    4. This is a key concept in evolutionary psychology that is argued to fuel all human behaviour: In the case of CSR and ethical consumerism, however, consumers get very little in return for their investment. Ethically sourced or manufactured products are typically higher in price due to greater costs. However, the reward for consumers is not much different from that of a non-ethical counterpart. Therefore, evolutionary speaking making an ethical purchase is not worth the higher cost to the individual even if they believe in supporting ethically, environmentally and socially beneficial causes.

    Shareholders and investors, through socially responsible investing , are using their capital to encourage behavior they consider responsible. However, definitions of what constitutes ethical behavior vary. For example, some religious investors in the US have withdrawn investment from companies that violate their religious views, while secular investors divest from companies that they see as imposing religious views on workers or customers.

    Some national governments promote socially and environmentally responsible corporate practices. Fifteen European Union countries are actively engaged in CSR regulation and public policy development. Some studies have claimed that the role and effectiveness of these actors were case-specific. Canada adopted CSR in The 'Heilbronn Declaration' is a voluntary agreement of enterprises and institutions in Germany especially of the Heilbronn-Franconia region signed the 15th of September The approach of the 'Heilbronn Declaration' targets the decisive factors of success or failure, the achievements of the implementation and best practices regarding CSR.

    A form of responsible entrepreneurship shall be initiated to meet the requirements of stakeholders' trust in economy. It is an approach to make voluntary commitments more binding. They further claim without source that "There is no form of market failure, however egregious, which is not eventually made worse by the political interventions intended to fix it," and conclude "there is no need for further research on regulation in the name of social responsibility. In the s, the US government could take away a firm's license if it acted irresponsibly. Corporations were viewed as "creatures of the state" under the law.

    Woodward established a corporation as a legal person in specific contexts. This ruling allowed corporations to be protected under the Constitution and prevented states from regulating firms. On 16 December , the Danish parliament adopted a bill making it mandatory for the largest Danish companies, investors and state-owned companies to include CSR information in their financial reports. The reporting requirements became effective on 1 January The law requires that all businesses affected establish a CSR committee to oversee the spending. Crises have encouraged the adoption of CSR.

    Magellan Metals was found responsible for lead contamination killing thousands of birds in Australia. The company ceased business immediately and had to work with independent regulatory bodies to execute a cleanup. The company recalled all apple or carrot juice products and introduced a new process called "flash pasteurization" as well as maintaining lines of communication constantly open with customers.

    Corporations that employ CSR behaviors do not always behave consistently in all parts of the world. Many of the big retail companies in the UK joined the Ethical Trading Initiative , [] an association established to improve working conditions and worker health. J Sainsbury [] employs the headings 'Best for food and health', 'Sourcing with integrity', 'Respect for our environment', 'Making a difference to our community', and 'A great place to work', etc.

    The four main issues to which UK retail these companies committed are environment, social welfare, ethical trading and becoming an attractive workplace. Anselmsson and Johansson [] assessed three areas of CSR performance: Product responsibility means that all products come with a full and complete list of content, that country of origin is stated, that the company will uphold its declarations of intent and assume liability for its products.

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    Environmental responsibility means that a company is perceived to produce environmental-friendly, ecological, and non-harmful products". An article published in Forbes. RI monitors social responsibility reputations by focusing on perception of consumers regarding company governance [] , positive impact on the community and society, and treatment of the workforce. According to the CSR Journal, the millennial generation worldwide helps propel brands toward social responsibility. Many millennials want to conduct business with companies and trademarks that employ pro-social themes [] , sustainable manufacturing processes [] , and ethical business practices [].

    Nielsen Holdings published its Annual Global Corporate Sustainability Report in concentrating on global responsibility as well as sustainability []. The code of conduct defines our work principles and how we conduct our business and it constitutes a solid foundation for ethically, judicially and socially based actions. A good financial result lets us achieve our objectives and offers our employees a solid and secure base.

    This requires taking a long-term view so that we continue to be a healthy company. This is expressed in aspects such as:. From the heat source to heat emission to heat distribution, Flamco , Meibes and Simplex cover a broad spectrum of innovative building technology systems. This internationally active group of companies has specialised in technical products and systems in the fields of installations, heating, cooling and solar solutions. The sister companies belong to Aalberts Industries N.

    Cookies Flamco uses Google Analytics to review the use of this website. Doing so enables us to customise the functionality as well as possible. You accept cookies by closing the box or continuing to use the website. More information is available in our cookie declaration. Expansion systems and accessories. Corporate Social Responsibility and Core Values. Flamco as an attractive employer Commitment to people, society and the environment is second nature to Flamco.

    People Commitment to our employees What makes Flamco an attractive employer? Employees develop in tandem with the progress in the organisation, because we are committed to them from the very start: Commitment to society Our commitment to society is expressed in various ways and at different moments: Room for personal input and ideas, no straightjacket, short communication lines, and an open and informal culture. Each country and every culture knows best where its own strength lies. Wherever we can, we decentralise. This connects us closely to the local environment. We always welcome interns and students from various institutes.

    Long-term deployment is a social issue that has become increasingly more important due to the ageing of the population. A healthy balance between work and private life by offering a flexible system of working hours and appropriate labour conditions.

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    Planet Environment The daily operational management takes the environment and other environmental aspects into account. According to the ISO , which is based on the Greenhouse Gas protocol, this emission can be divided into 3 scopes: Profit A good financial result lets us achieve our objectives and offers our employees a solid and secure base. This is expressed in aspects such as: A 5-year strategy cycle, which forms an integral part of our operations Continuous improvement programmes, including working with and implementing World Class Manufacturing techniques.

    This stimulates our employees and leads to improving our processes. Any risk areas are clearly mapped risk management and actions are taken to guarantee continuity. Flamco Flow of Innovation From the heat source to heat emission to heat distribution, Flamco , Meibes and Simplex cover a broad spectrum of innovative building technology systems. Subscribe to our newsletter. Accept cookies Accept cookies Reject cookies.