Can corporate social responsibility bring business culture back from the brink?
The growing sense that something hasn't been 'right' in the way companies do things - whether in how they interact with the environment, other businesses, society and their own employees - has been leading to ever stronger calls for fundamental reforms. Many argue that making short-term profit and shareholder value the core of business strategy at the exclusion of all else has brought our current crop of woes upon us - from the global economic downturn to environmental catastrophes to societal breakdown.
Some of this may be overstated, but there's no doubt that trust in corporations and business leaders has taken quite a knocking recently. Many organisations have responded to the problem and are trying to change. Corporate social responsibility (CSR) seeks to foster sustainable growth while taking account of the needs of other stakeholders beyond just shareholders, particularly employees and relevant communities.
Research shows that CSR is not only creating opportunities for revenue growth, but is also strengthening relationships with and between customers, investors, suppliers and employees. Perhaps it is counter-intuitive, particularly during a difficult economic period, but investment in CSR has been found to boost competitiveness and increase levels of morale, loyalty and engagement in employees - which is known to have a significant impact on the bottom line.
A recent report from the Chartered Institute of Personnel Development points out that to be truly effective and to rebuild trust, CSR has to be more than a publicity stunt. It has to 'run throughout business strategy and practices' and be part of the '"DNA" of the organisation'.