Corporate Social Responsibility

The term Corporate Social Responsibility ( CSR ) and corporate social responsibility ( often referred to as Corporate Social Responsibility ), describes the voluntary contribution of business to sustainable development that go beyond the legal requirements (compliance) goes. CSR stands for responsible business conduct in the actual business (market ), over ecologically relevant aspects ( environment ) to the relations with employees ( workplace), and exchange with the relevant claim or interest groups ( stakeholders ).

• 2.1 Four - Step Pyramid by Carroll
• 2.2 Two dimensions by Quazi and O'Brien
• 2.3 Core areas by Carroll and Schwartz
• 2.4 Capital market model according to rummage

Definition and facets of CSR

Definition

For the term Corporate Social Responsibility ( CSR ), there is no universally accepted definition. Particularly in North American usage, but increasingly also in German-speaking, be used in the discussion of the role and responsibility of business in society and related terms such as corporate responsibility or corporate citizenship. While the terms CSR and Corporate Citizenship (CC ) are often used in business practice as a synonym, a clear position on the relationship of the two concepts has in German literature emerged:

• Corporate Citizenship (CC ) therefore represents only a part of the corporate social responsibility and it is the about the actual business activities, continuous commitment of companies to solve social problems in the local environment of the company. Thus, CC essentially reduced to sponsoring, donations and foundations.

• In Europe, the anchored in the Green Paper of the European Commission definition of CSR has become the common understanding:

" Concept, which the company used as the basis to voluntarily integrate social and environmental concerns in their business operations and in their interaction with their stakeholders. "

The definition of the European Commission identifies social and environmental concerns as two central points for CSR. If we extend this to the economic concerns, we obtain the three dimensions of sustainability. ( see also three-pillar model).

In the modern understanding of CSR is increasingly seen as a holistic, all sustainability dimensions integrating corporate concept, the " go social, environmental and economic contributions of a business on the voluntary assumption of social responsibility on regulatory compliance (compliance). " All included.

To justify the need for the implementation of CSR in companies are generally differentiated into two approaches: the normative and the economically motivated approach. The normative approach considers the company as a part of society and is therefore also called corporate citizenship approach. The company claimed non- monetary benefits from society, such as Infrastructure, safety, education and social systems. In return, social responsibility of the companies is expected in return. The normative approach thus justifies the regulatory pressure from governments and transnational institutions, companies abzuverlangen social responsibility.

The economically motivated approach, however, tries to explain the motivation for the implementation of CSR intrinsic. This is to verify that a voluntary, non- normative implementation with a benefit increase for the company itself is connected. The reason given for these benefits increase with the creation and evaluation of intangible assets, such as Reputation, trust, employee motivation and customer satisfaction.

However, the principle of voluntariness also produces the question about the real motives of CSR. In most cases it is reasonable to assume that firms do not act solely from altruism - rather, they pursue economic goals - such as increasing sales and profits. The increased emphasis on CSR is supported by the finding that corporate responsibility in the medium and longer term to increase the company's success contributes ( business case ). As an important motive, the ability to use CSR as a promotional measure and portray themselves as good corporate citizen appears. This is considered legitimate as long as the actual sustainability performance is in line with the communicated engagement. However, if excessive exaggerations, half-truths or individual aspects beyond an unsustainable core business public (often with a lot of PR effort) pointed out, it is called as greenwashing.

After five years of process, the ISO 26000 " Guidance on Social Responsibility " was adopted in September 2010. The non- certifiable standard is a guide to raise awareness of social responsibility and promote a unified terminology. The guide uses already existing, existing approaches for environmental and social responsibility ( ILO core labor standards, GRI (Global Reporting Initiative ), Global Compact, etc.) and contains many examples of good CSR practice ( Best Practices).

Structuring by management responsibility

CSR activities can be structured in different ways. One possible assignment is based on Hiß about the various responsibilities of a company.

Inner area of ​​responsibility

The inner area of ​​responsibility describes the obligations of the company to the market ( economy ) as well as against the law. This area can only be assigned to the CSR when a voluntariness is also here. This occurs, for example, when laws are strictly adhered to, although these are usually not enforced in a country of production, or if relocation would be easily possible. In this area of ​​responsibility and the profit of the company falls. In the public debate, the opinion is widely represented, CSR implies the general waiver of corporate profits. The oppose is that companies can not afford to compete, generally on behalf of CSR to forego profits and to take competitive disadvantages. There are, of course, means of making a profit, which is not compatible with CSR (about neglect of safety standards, exploitation of employees or violation of human rights ). Accordingly, the question of the relationship between CSR and profits is differentiated look at. First of all, it should be noted that entrepreneurial profit in the market system is necessary and socially desirable. However, to distinguish between responsible and irresponsible profit. Companies have a responsibility to short-term profit at the expense of sacrificing a third party. Such a waiver is in the enlightened self-interest of companies, since this certain assets can be built ( integrity or credibility about ), which are important for the business cooperation skills and social acceptance ( " license to operate "). This shows that it is an investment in the conditions of long-term business success in such a waiver on short-term profit at the expense of others. Thus, CSR requires investment on the one hand, but draws on the other side economic success effects ( increase of financial performance, cost reduction ) and non -economic success effects ( building a positive reputation, risk avoidance, product and process innovations ) to itself.

Middle area of ​​responsibility

The middle area of ​​responsibility includes the value chain of the company. Commitments in relation to compliance with labor and environmental standards, as well as a supply chain management ( supply chain management) fall within this range. Here, the stakeholder dialogue for successful CSR appear to be essential. Stakeholders are individuals or institutions that have a vested interest in the activities of a company, or are affected by its actions. Key stakeholders are equity and debt investors, employees and trade unions, customers and suppliers, residents, consumer and environmental organizations, government agencies, media or general public.

As part of the CSR stakeholder dialogue is so important because they are the ones to which the corporate responsibility must relate. Especially with larger, listed companies CSR has become an important requirement for good rating results and access to certain funds or capital market segments.

Outer area of ​​responsibility

At this level, all activities exist that are not covered by the above two areas of responsibility. These include the much-publicized aspects of CSR, such as donations ( corporate giving ), sponsorship or the crop of employees for social activities ( corporate volunteering ). The outer area of ​​responsibility corresponds to the understanding of corporate citizenship.

Models of CSR

Four-level pyramid Carroll

Archie B. Carroll shares of corporate social responsibility into four levels:

The first two levels of a company must, save in exceptional cases, comply with, in order to survive ( socially required ). The third level of moral action is necessary in order to be accepted by society, but it is not absolutely necessary ( socially expected). The fourth level is purely voluntary, but socially desired. CSR includes in principle all four stages. However, the four-level pyramid is not differentiated according to environmental or social aspects, in addition, there is the problem to derive a common expectation of a modern society.

Two dimensions by Quazi and O'Brien

Quazi and O'Brien characterize four perspectives of CSR which are applied in a two-dimensional diagram ( see figure). Approximately voices are the following statements:

• The classical view corresponds to the economic level by Carroll
• The socio-economic corresponds to a legal and ethical level mixture Carroll
• The modern view corresponds to the ethical stage after Carroll with influences of stakeholder theory
• The philanthropic perspectives of both models correspond to each other also.

Core areas by Carroll and Schwartz

Another model was made by Archie B. Carroll and Mark S. Schwartz. This CSR is divided into three core areas: economic, ethical and legal responsibility. These core areas form another intersection, resulting in seven possible categories of CSR result ( see figure). The ecological dimension is classified in this representation in the ethical.

Capital market model according to rummage

According to rummage are the reasons for the growing importance of corporate social responsibility in the social and socio-economic changes of recent years, which has led to distortions in the balance of power from government, civil society and the market. The growing inability of the state to provide social services available, meets a capital market, which makes it interesting for the companies to offer these services. Because globalization altered the balance of state and market to the detriment of the state, increasingly creates a market demand for social services, such as Education, culture, or security, the government will withdraw more and more from the supply side, and this leaves the market. Corporate Social Responsibility is thus a product of the capital market.

Historical Background

Already the ancient authors were concerned with the issue of sustainable development. Aristotle established in the first book of the policy ( Πολιτικά ) that the economies is not a invaluable theme and purposive in itself sphere, but is a means to good and righteous life:

" [ ... ] Now, however, seems to be that the work of the House Administration ( οἰκονομία ) to a higher degree focuses its efforts on the people than on the lifeless possessions and more on the virtue ( ἀρετή ) of the people as to the accumulation of possessions. "

Since the Middle Ages in Europe there is the model of the respectable salesman, which imposed the individual merchants who meet certain standards of behavior, which served the social balance in the cities, among others. Were from the respectable merchants of the European bourgeoisie in the industrialization in the 18th century entrepreneurs who also belonged to the social commitment for granted. They acted as patrons and benefactors and attended to the improvement of living and working conditions of their employees by building houses, for example.

The concept of sustainability is derived from forestry and was first formulated in 1713 by the Saxon chief mining Hans Carl von Carlowitz.

Has the scientific research on CSR has its roots in the U.S., where since the 1950s, a discussion takes place about the content and the scope of corporate responsibility. One of the first publications on the subject was "Social Responsibilities of the Businessman" by Howard R. Bowen ( 1953). He represented in the view that social responsibility have to orient by companies to the social expectations and values. Since the company would take social rights claim, they would have to take on appropriate responsibilities. From the 1970s, the view of the company came to him as an actor. It was now of the opinion that the company not only respond to the expectations of society, but should also actively participate in their commitment. From the 1970s, the knowledge asserted itself more and more that stakeholders than the one hand, play an indispensable role for the existence of enterprises through corporate activities concerned and on the other hand benefit relationships between stakeholders and companies exist ( cf. Cyert and March 1963). The inclusion of the stakeholder approach in the Strategic Management is to evaluate value approach in response to the dominant shareholder and laid the foundation for today's CSR concepts.

The Club of Rome was founded in 1968 and issued the report The Limits to Growth in order, which was published in 1972 with great media effect. Since 1969, directed the UN and its Secretary-General U Thant pay attention to crises tendencies of the global economy and called for a new form of responsible business. So has developed since the 1980s, the concept of environmental protection, which spawned the idea of sustainable development. Since the 1990s, fusing both ideas - CSR and Environmental / Sustainability - a unity and a holistic understanding of CSR.

In Europe, the CSR debate, however, has not developed until later. This was probably partly due to the more pronounced towards the U.S. social security systems, on the other, in the traditional anchoring a sense of responsibility in European companies.

In 2001, the " Green Paper Promoting a European framework for Corporate Social Responsibility " appeared the European Union, in which this is the first time dealt with the issue. In 2002, the " European Multi -Stakeholder Forum on CSR " ( EMS Forum ) was established.

The Austrian Standards Institute ( Austrian Standards ) is a pioneer in the German-speaking countries in terms of standardization around the topic. So there is a set of rules ( ONR 192500:2011 ) on the Social Responsibility of organizations. This framework aims not only to business- run companies from, but generally refers to "organizations" and excludes also NGOs and other organizations with each. Additionally, there is a standard to which also benefits from the business consulting area relate. It involves the S2502: 2009 - Consulting services for social responsibility of organizations. Again, not only concerning business enterprises - but organizations of all kinds

Implementation by the company

Due to changed conditions (improved information and communication technology, increasing number of critical NGOs and thus possibly changing settings with consumers and public) companies are increasingly establishing themselves with CSR apart. Otherwise, they would run the risk of the required " power of attorney " of society to lose. In response to the problem, the number of specialized consulting agencies and CSR departments grows. While charitable activities sooner rather often depended on the inclinations of the management staff, they are now increasingly the subject of strategic planning and are closely coordinated with other public relations activities.

Such concepts are:

• Integration into the core business: the medium term seems essential for a credible CSR, rather than specific activities and incidental projects to achieve the actual strategic anchor in the core business and the realignment of the business model. This would, for example, for a bank mean to take the sustainability effects of the financial products in the view or develop microfinance services which enable disadvantaged populations self-sustaining economic development.
• In order to find a common approach to the issue of CSR, companies join together to form networks. Examples of known networks are: econsense, company Active in the Community, CSR Europe and the UN Global Compact.
• Base of the Pyramid: This concept ( the base of the pyramid, based on the income pyramid ) describes the involvement of the poorest parts of the population in the regular business cycles. When linking with CSR concepts both business value and long-term poverty reduction should be promoted. Possible starting points here is a Code of Conduct ( Code of Conduct ) with social standards, a ban on child labor, minimum wages and the like. This can ( sustainable supply chain management) be passed on to the suppliers on sustainable supply chain management.
• Cultural Diversity: The increasing globalization increasingly makes sure that production facilities are laid in emerging and developing countries. In these social laws and social standards are generally lower than in industrialized nations. Nongovernmental organizations ( NGOs) and interested consumers expect layers but by multinational corporations that produce these on a world relatively uniform social standards. Therefore, it may be necessary to operate through national legislation beyond CSR activities that are tailored to the cultural characteristics of the country. But even within a state to allow aspects of cultural diversity such as by promoting diversity management.
• To increase the credibility and legitimacy of these companies can label binding, creating and using environmental and social standards. Examples include the EMAS Regulation, SA 8000, ISO 14001 or labels such as FSC, MSC or the Blue Angel.
• The collaboration with stakeholders, especially with non-governmental organizations can be an important support in the planning and execution of CSR activities for companies and also increase their credibility.
• The introduction of mandatory design guidelines to reduce material and energy consumption and to prevent waste and emissions can improve environmental performance.
• Corporate Volunteering: Describes an approach be exempt if the employee for a portion of their time to pursue a social or environmental commitment. This activity is on the one hand have a social benefit and on the other hand the development of social skills among employees and their ties to promote the company. The slight majority of a priori Business Solutions 2009 surveyed samples from company expects at least implicitly a social commitment of its leaders in associations, foundations, etc. Herein, social skills and a sense of responsibility to manifest in particular by members of the leadership careers. At the same time, the companies expect to gain a positive effect on one's own company.

In order to simultaneously increase the motivation of employees, CSR programs are preferably carried out at the sites of each company.

Implementation along the supply chain

Incidents such as the building collapse in Sabhar (2013 ), which has claimed more than 1,000 lives in the textile industry have questioned the role of the supply chain ( supply chain ) rather than an individual company as a design object of CSR to the fore. Approaches to supply chain management are thus increasingly used to strengthen CSR. Wieland and Handfield (2013 ) suggest this before Three measures to ensure CSR along the supply chain. So must take place auditing of products and suppliers, but this audit must involve also suppliers of suppliers. In addition, the transparency must be increased along the entire supply chain, with smart technologies offer new opportunities. Finally, CSR can be through cooperation with local partners, improve with other companies in the industry and with universities.

Criticism

Corporate Social Responsibility is also exposed to criticism. This is mainly due to the fact that companies (especially public companies ) producing according to the criteria of profit maximization, while social and environmental aspects play for them no or only a minor role. Many companies would be Corporate Social Responsibility therefore operate only for economic reasons, and that is that they achieve a fashion with minimal cost a maximum positive effect for yourself. Hence, there are doubts about the sincerity of the motives for involvement within the meaning of CSR. In the view of critics such companies do not put CSR activities " to the thing itself " sake, but from one or more of the following reasons to:

• Improving one's Images: A company is implementing CSR activities and lifts it ( for example in his advertising ) as one of its outstanding features out. The goal is an improved image of the company in the population ( and often a concomitant increased profit). Spending on advertising can exceed the cost of the implementation of CSR activities many times in such cases. Criticism is especially practiced in such companies that are not apart of the CSR activity by other acts ecologically or socially sustainable. In terms of environmental sustainability one speaks in such a context of greenwashing.
• Preventing the creation of laws: Due to the rising global demand for environmentally and socially sustainable produced goods and the growing expectations of the Company to the Company to conduct our business ethically, increases the likelihood that more and more countries adopt laws which firms to such an action force. According to the critics of CSR will therefore be implemented by some companies to prevent the creation of such laws as these were connected to the companies with substantially higher costs than if they engage themselves voluntarily. Critics compare this with a sale of indulgences, a message of the company to the policy and citizens: "Let us take care of it, we do not need rules and their consumers can shop in peace with us."
• Avoidance of costs arising from accidents and mishaps: Ecologically and socially sustainable practices can lead to breakdowns, accidents or other mishaps, the consequences for the responsible companies are associated with considerable costs that exceed the costs saved by far. For this reason, CSR activities useful for such entities from the financial point of view and are carried out of the critic 's view, only for financial reasons. Examples of incidents which had the implementation of CSR entails are the oil spill, the Exxon Valdes of 1989 or the recall of contaminated with lead toys by Mattel in 2007.