SPECIFIC RELEVANCE OF CORPORATE SOCIAL RESPONSIBILITIES

CORPORATES SOCIAL RESPONSIBILITIES

Corporate social responsibility (CSR) has become one of the standard business practices of our time. For companies
committed to CSR, it means prestige and an enhanced overall reputation.

WHY CSR BECOME MORE RELEVANT FOR BUSINESSES TODAY?

Yes, it’s because of the following identifiable trends which are:

1. Changing social expectations 2. Competitive labor markets

3. Disclosure Demands by Stakeholders 4. Globalization 5. Pressure from Investors

6. Supplier Relations 7. Wealth and Vulnerabilities

ONE OF THE KEY drivers for firms becoming more socially responsible IS:

CHANGING SOCIAL EXPECTATIONS

Consumers and the public, in general, expect more from the companies who produce the products and services they
buy. These expectations resulted from the corporate scandals, which partially eroded the public trust of corporations.

(Explanation)As consumers, our access to information about what and how we buy continues to grow. Powered by
social media, increasingly we look at the companies behind the products and are disappointed when their actions do
not meet our expectations.

A concrete example, the recent issue that broke social media about those cosmetic products that tested on animals.
Many known brands were positive in the said issue. And the fact that we are supporting and using these brands made us
disappointed as they violate their ethical responsibility and not minding the welfare of animals. Thus, these scandals shift
our perspective that it is best to support those cruelty-free brands.

The changing expectations of consumers have resulted in firms being more responsive to these issues and adopting a
more corporate responsible outlook

In addition the study of James Rubin and BarieCarmichael entitled “Reset: Business and Society in the New Social
Landscape”

BY: James Rubin and BarieCarmichael

We have found some statistics Carmichael and Rubin found in their research:

Findings in their research are as follow:

•71%of people said their expectations for companies have increased.

•68% said it's more important to know how companies operate than what they sell.

•94% of those surveyed said companies have the ability to shape a better society.

•87%said most companies exist to create value for multiple interests in society, rather than just profit.

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 •75% said they converted their opinions of a company into action.

COMPETITIVE LABOR MARKETS

Talk about the importance of companies engaging with competitive CSR to their business as it helps them to hire and
retain these employees with promising potentials.

For example: Employees who work for a corporation that demands a high standard of business ethics in all aspects of
operations are more likely to perform their job duties efficiently and are also more inclined to stay loyal to that
organization.

Moreover, companies with strong CSR strategies have happier employees and they end up with better employees.
Failure in doing so will cause the company some concerns about its human capital.

DISCLOSURE DEMANDS OF STAKEHOLDERS

Stakeholders now know their roles and rights which includes the right to be informed on how the corporation does its
business.

Today, there is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees,
communities, investors, and activist organizations than in past years.

The disclosure demand of stakeholders and investors is not only for and only analyzing the relevance of their investments
but also for knowing information about corporate social and environmental policies. The Financial Security Law of
France, law requires a governance report for public companies. Demands information about how the public companies
take care of the economic and social consequences of their activities.

Dwindling Government Role

Is about the concept of “ the government disconnection”, now we might question what caused this concept to arise
and implement in the present.

If we look back In the past, the kind of governments had relied on strict legislation and regulation to deliver social and
environmental services in tandem with the business sector which has led to certain failed initiatives.

The corporations affected by this legislation are only complying with various requirements because they are regulated.

For instance, those legislations relating to the environment, pollution, proper product disposal, and so on. SO these are
not necessarily a driver of corporate social responsibility but are adopted and followed by companies as it is a
requirement imposed upon them by the government.

Which we can infer that corporations may or may not be willing to incorporate social responsibility initiatives into their
day-to-day operations as an overall strategy. Gladly, this not how things are done at present, as there is now what we
can call "The government disconnection" or failure of regulations.

Globalization

The increasing influence of the media on a global perspective and having borderless transactions of trading business
products to different countries are one of the impacts globalization brought to the modern world.

This is illustrated when consumers witness wrongdoings by companies, they can immediately bring this to the public’s
attention by capitalizing on the use of technology.

So in what way we can do it? By using social media as a medium, it can fuel instant communications among

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 compatible groups and consumers and empower them to spread their "concerns".

The information spread so fast which may cause damage to the company’s reputation,

Because of the increasing influence of the media, consumers now can easily initiate collective action like a product
boycott campaign via cyberspace.

Pressure From Investors

This happens because ETHICAL CONDUCT is part of the system in assessing a company's performance

This leads to the increasing number of investors that are focusing on the social and environmental links of a company
and its ethical conduct

Investors are changing the way they assess companies' performance and are making decisions based on criteria that
include ethical concerns and the social involvement of business. As investors now are well aware of the negative
publicity about unethical practices that can harm both a corporation’s reputation and its bottom line.

For instance, shareholding businessmen buy and sell stocks by taking into account the ethical aspects of companies with
whom they deal stocks with.

The foregoing facts or those facts we mentioned, will set new directions for companies in the future.

Supplier Relations

Since stakeholders are becoming more interested in business affairs many companies are taking steps to ensure that
their partners conduct themselves in a socially responsible manner. Some are introducing codes of conduct for their
suppliers, to ensure that policies or practices of other companies will not tarnish their reputation.

EXAMPLES
1. not buying products that used child labor
2. boycott campaign on products from manufacturers that did not follow International Labor Organization (ILO)
standards

Clothing company C&A developed a supplier code of conduct, which states that exploitation of child labor is
“absolutely unacceptable.”

Wealth and Vulnerabilities

In developing and developed countries, consumers can afford to be choosy and picky about the product they buy,
corporations, therefore, has to operationally align themselves with these consumer preferences. This is good for them as
they have the wealth. However, wealth affects vulnerability in a way that the poor are less likely to afford quality goods.
On the other hand, the companies that operate here in our country give us benefits in terms of the economy and jobs,
but we must recognize that they go home better with a bigger profit.

This is the type of phenomenon driving stakeholder groups to band together to call for more holistic and responsible
corporate operations and philosophies.

WHAT IS Ethical leadership?

It is a form of leadership that is concerned with leading in a manner that respects the rights, dignity, and stake of others.

doing the "right thing" without abandoning your personal or organizational values.

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