All companies, big and small, are realizing that being socially responsible is not optional; instead, it must be part of their way of doing business. Why? Consumers are no longer passive purchasers of a company’s good or services. Instead, they are becoming an informed, and sometimes vociferous, group of buyers who can act en masse, spread information, and have a significant impact on a company’s brand and reputation.
So, the question is no longer whether social responsibility is important, but rather how does a company become socially responsible or better at it. There are three steps that companies can follow to start down the path of becoming socially responsible.
1. Know What It Is
First, a company must understand the parameters of social responsibility. Companies with good intentions sometimes disappear in definitional quicksand. The terms social responsibility may have a record number of synonyms: corporate responsibility, corporate citizenship, social enterprise, sustainability, triple-bottom line (financial, environmental and social) and corporate governance. An additional layer of complexity is that the burgeoning field of business ethics overlaps with the domain of social responsibility.
A definitional starting point is that a company should view social responsibility as the way in which they manage the whole range of impacts their organization has on their circles of influence. Thus, social responsibility is a critical component of how a company conducts its business and is embedded in their overall strategy. “Circles of influence” is somewhat broader than stakeholders; the intent is that the company manages its influences, which can be far-reaching.
2. Find an Approach That Works
With the basis of understanding the scope of social responsibility, a company must next consider how to approach the matter effectively. Social responsibility must be part of the overall strategy of a firm. Rather than being grafted in response to one-off request, it needs to be part of the strategic planning process. The strategy process begins with careful formulation as to the essence of the company. What does the company aspire to become (its vision)? How will it conduct its business (mission)? With that starting point the company then sets out its short, medium and long-term objectives. Thus, clearly the importance of social responsibility must be embedded in the DNA of the firm.
3. Get People Involved (hint: start with your employees) & Implement
To implement a social responsibility program effectively a company must engage employees in the planning process. As with any aspect of effective corporate strategy, it cannot be imposed from above, but must be an outgrowth of consultation and group collaboration in order to be effective. A company must recognize that employees may have different interests. There are many benefits to properly engaging employees: increased commitment, increased trust, motivation, new ideas, reduced turnover, reduced absenteeism, greater productivity. When conducted properly, and embedded in the culture of the organization, there will be a sense of “ownership.”
Thought leaders are in agreement that social responsibility must be embedded in the strategy of the firm. Michael Porter, one of the world’s leading strategists, views “corporate social responsibility” (CSR) (he uses this term rather than simply “social responsibility”) as a potential competitive advantage. His view is that businesses must shift from a fragmented approach and integrate CSR into the way the company operates. Porter and co-author, Mark Kramer, wrote a seminal article in the Harvard Business Review (December 2006) in which they point out that, “CSR can be much more than a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage.” (80)
Porter and Kramer argue that companies need to look for areas of “shared value,” where they have points of intersection, where there interests align, rather than becoming embroiled in areas of friction. (81) Social responsibility should be viewed as a process of building shared value, rather than an exercise in damage control or a superficial PR exercise.
Building on the parameters of social responsibility and an understanding of its value, a company needs to start implementing a social responsibility program. There are a number of aspects of social responsibility. There is an internal dimension of social responsibility that includes issues such as how staff is treated, such as written policies on non-discrimination and respect for human rights. There is the dimension of external relations such as restrictions on child labour and engaging in fair trade practices. Another aspect is corporate citizenship such as support for sustainable development initiatives. Social responsibility also involves accountability and reporting to relevant stakeholders in a transparent manner.
With the three steps outlined a company can begin the process of becoming socially responsible. In some instances, the company may have an opportunity to include the dimension of social responsibility in the planning process from the outset. In other instances, companies will have a pre-existing strategy in which some elements of social responsibility will be tested. Either way, companies who put in the effort are realizing that they are not only doing something positive—which is valuable in its own right—but that they are also building a better company that generally fares better in the marketplace.