behavioural economics blogs
As we see every day companies spend huge amounts of money trying to be socially responsible. My first consideration is concerned about why companies are "socially" and "ethically" active and what are the main issues involved in corporate social responsibility (CSR).
There are many references to corporate social responsibility, sometimes referred to as corporate citizenship, in our workplaces, in the media, in the government, in our communities. Companies can be socially responsible in different dimensions: Environmentally, economic contribution to community, having progressive stakeholders relations such as commitment to consumer safety or demonstrate respect to human rights.
CSR means a commitment by a company to manage its roles in a society in a responsible and sustainable manner (Akgeyik, 2005).
A number of events in recent years, such as the highly publicized financial scandals of Enron and WorldCom, sweatshop labor by retail clothing and sports shoe manufacturers and the "under-the-table" deals that companies have received. As a consequence now, reputation, brand, integrity and trust are increasingly considered important measures of corporate social responsibility.
The main CSR issues, that companies are taking seriously, are those related to Reputation and Brand Enhancement, Accountability and Transparency, Risk Management (Managing investor confidence is another factor supporting the business case for CSR) and the "Talent War" based on labor shortage in the next 10 to 25 years cause that companies do special efforts attracting, developing, motivating and retaining. In addition, the talent war is evidenced by an influx of "best places to work" awards. Thus, a strong argument for CSR is talent management in both the short and the long term
Correspondingly, CSR influences a company's competitive advantage today through two key value drivers: 1) company reputation and brand; and 2) human capital (Paul Lee, 2008) HR leaders have begun to assume leadership roles to address both areas.
For instance, Enron and Worldcom incidents would be averted if the recruiting process would be identified and dropped in advanced those managers who breach legal duties and were caught on corruption behaviours?
HR has an important role in companies in order to achieve CSR standards. HR leaders can influence three primary standards of CSR-ethics, employment practices and community involvement-that relate either directly or indirectly to employees, customers and the local community.
Which kind of employment practices can be promoted in companies to become more CSR? Human resource management practices promote personal and professional employee development, diversity at all levels and empowerment. Another HR practices are: consider employees as valued partners, with the right to fair labor practices, competitive wages and benefits and a safe, harassment-free, family-friendly work environment.
What HR leaders can do to track HR scorecard on CSR? Some ideas that will be used as a checklist according to recent studies (Fenwick, 2008 & Lockwood, 2004)
• Create a strong organizational culture around core company values.
• Scan the environment to identify potential threats (e.g., competition for talent within the organization's industry sector).
• Build personal and professional capability of the workforce (e.g., expand intellectual capital within the organization and in collaboration with other organizations).
• Include ethical concerns in staff performance measures.
• Support participative decision-making.
• Ensure highest standards in workplace health and safety.
• Encourage active engagement in community activities.
References:
- Akgeyik, T. (2005) The human resource management dimensions of corporate social responsibility in Turkey: a survey. Journal of the Academy of Business and Economics, Jan, 2005.
- Fenwick, Tara and Bierema, Laura (2008), "Corporate Social Responsibility: Issues for Human Resource Development Professionals". International Journal of Training and Development, Vol. 12, Issue 1, pp. 24-35, March 2008.
- Lockwood, N. R. (2004). Corporate Social Responsibility: HR's Leadership Role. SHRM, December. Retrieved from [http://www.shrm.org/Research/quarterly/1204RQuart.asp#summary].
- Paul Lee, M. (2008). A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead. International Journal of Management Reviews, 10(1), 53-73.
- Trudel, R., & Cotte, J. (2008 5). Does Being Ethical Pay? Wall Street Journal Online, Page R1.
Carlos Marti Sanchis
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