The private sector and

development: towards
social responsibility

Part A
Outcomes

1 2 3
Distinguish between Understand the Determine CSR’s
CSR and CSI trends influencing contribution to
CSR development
Corporate social responsibility

• The concept of corporate social responsibility in the South African

context dates to 1972.
• Corporate responsibility is about the private sector acknowledging its
social responsibility by improving the condition of the communities in
which it operates.
• According to Davids (2014), these responsibilities could be internal
and/or external.
• The internal social obligations are activities that only benefit the
employees of a company whereas
• External social obligations are those that benefit external stakeholders
of the company.
Corporate social responsibility

• The projects within a company that benefit external stakeholders are

termed corporate social investment (CSI) while those that benefit
employees only are referred as CSR.
• Therefore, the terms CSI and CSR cannot be used interchangeably as
the distinction lies on who tends to benefit from project proceeds.
• We should note that each company will adopt a definition that is
suitable to their corporate culture, and this could be motivated by the
following views:
➢Classical – private companies have a social responsibility to its shareholders
only
➢Activist – private companies have social responsibility to society as a whole
➢Managerial – private companies have a responsibility to multiple constituencies
 International trends
• These trends are based on the impact that a
socially responsible company can influence o Improved financial performance
its customers’ continued support and o Reduced operating costs
increase in revenues.
o Enhanced brand image
• The company’s behaviour towards these
trends will influence its business’ o Increased sales and customer loyalty
sustainability be it directly/indirectly;
o Increased productivity and quality
• Think of your own personal choices to buy
certain brands (what influences you)…Do o Increased ability to attract and retain
you buy from companies known to use child employees
labour?
Cont…
Cont…
Cont…
Resistance to CSR
It is the duty of government The financial cost of CSR is
A company’s responsibility is
to provide social service too high and may force
to supply goods and services
delivery and improve the certain companies to close
to maximise profits for its
quality of life of a society thereby leading to job
shareholders.
not the private sector. losses.

A company is a specialised Increasing pressure on the

economic unit which does Public expectations on the private sector for greater
not have capacity (skills) to social role of the private social responsibility may
address social problems sector are unrealistic. lead to the demise of the
effectively. free market system.
Social responsibility in South Africa
• In South Africa private sector social responsibility dates back the
apartheid era and thus carries with it controversies in terms of how
businesses benefited from the system and contributed to its
reconstruction.
• However, their contribution to the social development cannot be
taken away, but the question could be who benefited from such social
responsibilities of the private sector under the apartheid regime.
• Issues under the spotlight here are good labour practices, can you
think of other examples?
 Social responsibility in South Africa
• According to Davids (2014), South Africa lacks
reliable data on the CSR footprint and reports that
in 2012 expenditure on CSI was R6 billion.
• In 2019 Trialoque (2020) reported a CSI
expenditure of 10.2 billion. The diagram shows
contribution per sector with the retail sector
having invested the highest amount.
• For both periods, a large share has been spent
towards the education sector. Refer to the diagram
in the next slide.

https://trialogue.co.za/companies-in-sa-spent-r10-2-billion-on-corporate-social-invest-in-2019/
https://trialogue.co.za/companies-in-sa-spent-r10-2-billion-on-corporate-social-invest-in-2019/
https://trialogue.co.za/companies-in-sa-spent-r10-2-billion-on-corporate-social-invest-in-2019/
Cont…

Since 2009 social responsibility has

shifted from philantrophy to self-
Reasons for CSR/CSI have been interest by the private sector, and
noted to have shifted from the question that we need to ask
philanthropic to market interests – ourselves is where does
brand loyalty or for tax rebates. development of our societies fit?
Does the private sector care about
community development?
Sources consulted
Davids, I. and Theron, F., 2014. Development, the state and civil society
in South Africa. Van Schaik.
Trilogue, 2029. companies-in-sa-spent-r10-2-billion-on-corporate-
social-invest-in-2019. Retrieved from:
https://trialogue.co.za/companies-in-sa-spent-r10-2-billion-on-
corporate-social-invest-in-2019/, accessed 15 April 2025.
Thank you!