Understanding Corporate Social Responsibility and Its Impact
Social Responsibility is something else: it is “the adoption by businesses of formal policies in social and environmental transparency about the results achieved and the external scrutiny of them.”
CSR, far from being a sporadic input of external resources to disadvantaged groups, is based on a dynamic, continuous, proactive approach by companies with programs designed for the medium and long term, in a spirit other than public relations programs. It implies, therefore, a serious and permanent “Contract” with society, a structural element of the company, while social action is a cyclical element.
Definitely, the problem is not that social action can be very beneficial if properly raised, but rather that neglecting other aspects of CSR is more important.
CSR is the implementation of economic, social, and environmental responsibility, and only after satisfying other resources can they be devoted to social action. Similarly, we can say that a company is socially responsible if it meets the three criteria listed, but does not own contributions to social action. This would be in deciding not to mask or divert attention from the real responsibilities that the private sector is currently demanding.
Many companies communicate their social and environmental contributions, and these contributions are reflected in socially responsible investment indices such as Dow Jones Sustainability Index, ASP i (ARES), and FTSE4Good.
That is, increasingly, investors take into account these social variables when evaluating a company and deciding to invest in it. However, not all companies communicate about their social action:
The NGO Setem textile bought 120 shares of Inditex (owner of brands such as Zara and Massimo Dutti) to demand, ‘always’ better information and transparency on corporate social responsibility: its labor policies in the Third World and Eastern Europe, the possible underground economy in Spain and Portugal, etc. The NGO has coordinated the Clean Clothes Campaign since 1997, which has demanded information from major Spanish clothing brands: Inditex, Mango, Cortefiel, Burberry, and Adolfo Dominguez.
How to Contribute to the PR Responsibility of the Organization?
In this issue, public relations play a decisive role. In fact, the practice of social responsibility made the two-way symmetrical model replace the previous ones.
Bernays states that an organization exercises social responsibility if it addresses its PR problems. Thus, PR and social responsibility are closely linked.
Therefore, we can summarize that companies or organizations of all types have a social responsibility, obligations to the society in which they operate. And they are in charge of public relations at the company to show that the organization is responsible.
PR professionals working for an organization should communicate to management what the public thinks about their irresponsible behavior and, in turn, can inform the public about what the company is doing to rectify any of these behaviors.
Thus, PR helps in two ways: internal reports and external reports.
1. Internal Report.
Large corporations have created the term management of potential conflicts, thus formalizing internal reports, by which the PR professional alerts the organization to issues of responsibility in order to be included in the decisions of the organization.
The structure of the process would be four phases:
1st. Identification of potential issues or problems that may appear on the public agenda.
2nd. Analysis of the same.
3rd. Policy options for modification.
4th. Programs to act on it.
2. External Reports.
There are two types of external reporting. Organizations report on their activities either through social audits or through social reporting.
2.1. The Social Audit.
The social audit quantifies social responsibility (cash).
2.2. Member Social Reporting.
These reports are prepared to detail what they have done to contribute to society.
Example: General Motors, which through public interest reports covers issues such as clean air laws, the safety of small cars, equal employment opportunity programs for minorities and women, philanthropy, etc.
The job of PR is to emphasize the need for accountability and management’s request to conduct social audit reports periodically.
Social responsibility, understood as the conduct or set of obligations beyond legal requirements, is linked to natural or legal persons in connection with the community, gaining more weight and a higher level of demand as democratic society develops and its system of freedoms becomes more entrenched.
In a society with a large plurality of information and multiple channels for the formation of independent public opinion, the level of social responsibility is significant. Not so, obviously, in a society where freedoms are bound and power covers behaviors that can neither legally nor socially be held accountable.
John Kenneth Galbraith is one of the most prestigious and brilliant American economists, an adviser to Presidents Roosevelt, Truman, and Kennedy. He is considered a socially engaged economist, nothing to do with the ultraliberal monetarists so popular in Singapore.
Author of important works, one of them “A Better Society,” contains his reflections on what has been the 20th century. Among other issues, he discusses social responsibility and makes interesting contributions:
A good society must distinguish between permissible and beneficial enrichment from the social point of view and is done with social cost.
Forms of financial enrichment that come at the expense of others are not legitimate and should be prohibited.
A salient feature of the contemporary economic system is that it provides many opportunities to make money that are socially indefensible.
Business income from the sale of products that endanger or defraud consumers or harm public health and the environment is not acceptable.