The true economic growth of a country is reflected in the state of health, education, earnings and the quality of life that its citizens live. Besides government, corporate too has the responsibility in fostering growth. However, as the world has entered the twenty-first century, the modern corporation has become more than a corporate legal person established by shareholders to maximize their wealth through specific activities in the market place. In almost every country, firms are being regarded as a major element in the process of governance and several states have established tripartite commissions which have also as much power as elected legislatures. These so-called ‘mixed commissions of government, business and labour representatives’ have been popular in Europe and are regarded as a foundation of modern governance. The World Business Council for Sustainable Development in its publication defined Corporate Social Responsibility as the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large.
Social responsibility becomes an integral part of the wealth creation process, which if managed properly should enhance the competitiveness of business and maximise the value of wealth creation to society. Corporate Social Responsibility may be viewed at three different levels, primary, secondary and tertiary level. At the primary level, the firm attempts to meet its legal obligations and to address the concerns of its primary stakeholders (customers and employees). At this level, the firm is not reaching out beyond the borders of its core concerns. Then at the secondary level the firm reaches out to its secondary stakeholders (its neighboring community), organizations affiliated with its staff, groups likely to consume its products and pet concerns of its directors and managers. Finally at the tertiary level, the firm is reaching out to the wider community, basing its decisions on criteria not related to the immediate benefit of the firm. It is at this level that we may regard the firm as acting socially responsibly.
At the other levels, it is acting enlightened self-interest. Companies have a lot of power in the community and in the national economy. They control a lot of assets and may have billions in cash at their disposal for socially conscious investments and programs. Some companies may engage in “greenwashing”, or feigning interest in corporate responsibility, but many large corporations are devoting real time and money to environmental sustainability programs, alternately energy and various social welfare initiatives to benefit employees, customers and the community at large. The two basic principles that govern CSR are charity principle and stewardship principle. Charity principle is the idea that the wealthiest members of society should be charitable towards those who are less fortunate. On the other hand stewardship principle is the idea that business leaders have an obligation to see that everyone, particularly those in need or at risk, benefits from their firms action.
When times get hard, there is the incentive to practice CSR more and better, if it is a philanthropic exercise which is peripheral to the main business, it will always be the first thing to do when push comes to shove. In different countries, there will be different priorities, and values that will shape how business act. In Jamaica people have gathered strong opinions as it relates to CSR believe that all companies have obligations to the society and environment in which they operate that go beyond simply following the law. There are certain ethical or political philosophy which argue that social goals are pursued by discussing the kinds of characteristics people should have especially those of rules. Two of the most important work that follow this approach is Machavelli’s the prince and Plato’s Republic. Machiavelli, chief focus of the ruler is to ensure the survival of the state which is done best by ensure the survival of the state which is done best best by ensuring his own survival. CSR is useful
A company being socially responsible brings about benefits in many different forms however there may be consequences that society have to face. As a result there have been arguments that have been developed to support CSR in both a positive and a negative light. The good of CSR is that: 1. it can improve a company’s image -embracing a policy of corporate social responsibility, paired with genuine action, can serve to build or improve the reputation of a business. Corporate social responsibility becomes a method to repair reputation damage and restore profitability. In other cases, adopting such a policy works as part of a business’ essential brand, and consumers often demonstrate more loyalty to brands that can demonstrate a commitment to environmental concerns. This leads into the second benefit of CSR, therefore 2. Better customer relations – one of the hallmarks of corporate social responsibility is staying involved in the communities where the business operates. This community involvement goes a long way toward building trust between customers and the business.
If a business builds trust with its customers, they tend to give the business the benefit of the doubt if something goes wrong, rather than assuming malicious intent or raw negligence. Customers also tend to stick with businesses they trust, rather than actively seeking out new companies, which helps keep a business profitable over the long haul. The final of the many benefits of being socially responsible is long run profits. Socially responsible businesses tend to have more and secure long run profits. This is the normal result of the better community relations and improved business image. The consistent increase in profits also contributes to the long term existence of businesses to continue to provide their services to the society at large.
A major reason why some companies may not be receptive towards being socially responsible is because of the cost of doing so. Many socially responsible activities do not pay their own way. Someone has to pay these costs. Business must absorb these costs or pass them on to consumers in higher prices. Programs to reduce environmental impact often require expensive changes in equipment or ongoing costs without any clear way to recoup those losses. The decision to maintain domestic production facilities or call centers or to buy from domestic producers rather than outsource or move production overseas can drive up costs for a business. Additionally, there is no clear evidence that adhering to a policy of corporate social responsibility generates a significant increase in sales or profit.
In addition companies may acquire too much power over time on a given environment or a social group of any form who they were being of assistance to. Business is already one of the most powerful institutions in our society. If it pursued social goals, it would have even more power. Society has given business enough power.
Well established organizations in Jamaica are dedicated to being socially responsible. The National Commercial Bank Jamaica Limited (NCB) stated how it is committed to engaging in those actions that will ensure its continued viability while recognizing its role as a corporate leader in the Country. The scope of NCB’s CSR Policy includes: 1. ethics – ethical standards and practices are governed by the NCB Code of Business Conduct. Commitment to ethical behavior is widely communicated in an explicit statement and rigorously upheld. NCB expects all its employees to display the attributes of decency, fairness and honesty.
2. Employment practices the Company’s human resource management practices promote personal and professional employee development, diversity at all levels and empowerment. Employees are recognized as valid partners with the right to fair labour practices, competitive wages and benefits as well as a safe, harassment free, family-friendly work environment. 3. Community outreach – the Company fosters an open relationship that is sensitive to community culture and plays a proactive, co-operative and collaborative role to make the communities in which we operate better places to live and conduct business. .