Being Responsible can Lead to Profitability by Emad Rahim

Corporate Social Citizenship

Corporate Social Citizenship Matters: Being Responsible can Lead to Profitability Emad Rahim »

Business organizations that currently do not use social responsibility initiatives don’t have a clear understanding of how social responsibility can be beneficial to a company’s success. However, this perspective is not common.

growth in the long-run. In addition, CSR can

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ing to stakeholder and stockholder gain. The firms identified as socially responsible and ethical have greater returns than S&P 500 companies, hence confirming it pays to be ethical.

ccording to Bowen, corporate social

these actions are also expected of organiza-

CSR in Action

responsibility (CSR) began as a field

tions. Advocates of the corporate citizenship

Starbucks Corporation is an organization that

of study in 1946 when Fortune maga-

theory employ the same themes and concepts

has an official CSR statement in which they

zine published an article in which the editors

as corporate social responsibility. These advo-

refer to it as a global responsibility, or the

suggested that the term CSR meant that

cates believe that maintaining a positive image

“shared planet” initiative. The program is a

businessmen were responsible for the con-

or good reputation as responsible citizens

major component of Starbucks’ franchise objec-

sequences of their actions in a sphere some-

would greatly enhance an organization’s long-

tives. As part of their global responsibility

what wider than that covered by their profit

term success.

initiatives, Starbucks emphasizes the following activities; coffee purchasing practices, growth

and loss statements. The phenomenon gained traction in later years as evidenced by the

Leveraging Responsibility

and expansion, environmental impacts, health

establishment of business communities, such

A trend in contemporary literature emphasizes

and wellness, and workplace practices.

as Business for Social Responsibility (BSR) in

the use of corporate social responsibility as a

Ben & Jerry’s Homemade Holdings, Inc. is

1992 and Ethical Corporations in 2001.

public relations and marketing strategy. Many

another organization known for its extensive

research studies have found that consumers do

CSR program. To demonstrate the practice

Corporate Citizenship vs. Corporate Social Responsibility (CSR)

care and are paying attention to corporations

and value of CSR, consider that Ben & Jerry’s

contributing to the betterment of society. Con-

hosted a Social Mission Summit, held in Burl-

There has been a global consensus that sus-

sumers care deeply about societal problems

ington, Vermont, home of the organization’s

tainable development should encompass at

such as cancer, the environment, child labor,

headquarters, which included company leaders

least economic growth, social progress, and

and human rights, and will make purchasing

from around the world. The goal of the “Social

stewardship of the environment. Sustainability

decisions based on corporate social responsi-

Mission Summit” was to present the CSR and

is often considered in terms of three pillars;

bility. Business leaders should take note.

social initiatives that the company had under-

economic, social, and environmental considera-

Research reveals that by engaging in CSR

taken. They outlined their major initiatives

tions. The three pillars could also equate into

activities, private firms can increase earnings

including; furthering the cause of peace and

what is known as the triple bottom line (TBL),

justice, harmonizing their global supply chain

measuring a company’s ROI based on its impact

and leading global sustainable practices.

on the people/community, planet and profit/ economy. Both corporate citizenship and corporate social responsibility encompass all three of these pillars when we consider the terms and meaning of these two topics under the umbrella of being sustainable.

Corporate citizenship uses

Southwest

Airlines

(SWA)

found

the

relationship of social responsibility and economic performance enviable, positive and a performing strategy that has sustained both internal and external stakeholders and surrounding communities

inclusively.

SWA

stakeholders have enjoyed sig-

the same themes and con-

nificant dividends based on the

cepts

social

corporate strategic planning

responsibility. A corporation

and strategic implementation

is regarded as a legal entity

that ties down to the vision,

as

corporate

that possesses many of the

mission, value and culture of

rights, duties, and powers,

the organization. The com-

and also assumes some of

pany has outperformed all of

the same obligations, as those

their competitors in the airline

of the individual citizen. Just

industry for decades. Many

as there are expectations that

attribute their success to their

individuals will act as responsible citizens by performing duties that contribute to the common good and welfare of the community at large,

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enhance a firm’s competitive advantage, lead-

CSR mission and vision.

Although Starbucks and Ben & Jerry’s are smaller in scale than organizations such as Ford, IBM, or

Consumers care deeply about societal problems such as cancer, the environment, child labor, and human rights, and will make purchasing decisions based on corporate social responsibility.

Business leaders should take note.

Microsoft, these companies are good exam-

of what is an effective and viable approach.

aforementioned, a corporation’s vision should

ples of what organizations are doing in terms

In addition, business effectiveness is measured

be to have a sustainable future that balances

of their social responsibilities. As mentioned

in other intangible factors beyond financial and

the business model between their employees,

before, the efforts displayed by these pioneers

individualistic emphases. Business behavior

the community, the environment and, primar-

are huge leaps on from 50 or 60 years ago when

has both economic and non-economic impact.

ily, their financial viability.

the concept of corporate social responsibility

As Ben Cohen – author and co-founder of Ben

was emerging.

& Jerry’s – indicates, once consumers see

A study completed by Pederson outlined the

examples of prosperous companies integrating

current business environment relative to CSR.

social concerns into their business practices,

Pederson discovered that corporate activities

they are emboldened to demand the same of

have broad impacts on society, but the findings

other businesses.

from the analysis indicate that managers still

The

strategic

management

tools

and

have a relatively narrow perception of societal

models that organizations implore in the driv-

responsibilities, which can be summarized as

ing wheels of their core activities help in the

taking care of their workers, and making prod-

determination of the sustainability solution of

ucts and services that customers want in an

an organization. These strategic elements, if

environment-friendly way. According to Peder-

developed well with considerable understand-

son, this perception is narrow as a result of the

ing of environmental, political, economic and

traditional line of thought that an organization

social factors, give an organization the desired

is running soundly if profit margins remain

competitive advantage necessary to dominate

high and stakeholders are satisfied.

their market and the industry as a whole.

Implications

that have sustained the company in economic

Corporations looking for sustainability solu-

performance and in their environmental stew-

tions must engage their business both in

ardship. Its core values, goals, mission, vision

economic performance and social responsibil-

and culture have to be sustained regardless.

ity, both of which have a direct relationship

Corporations stand for so many things, such

despite

environmental

as the environmental stewardship across

differences. The current dilemma, with more

their system, and they want to provide their

organizations adopting corporate social respon-

employees with a stable working environ-

sibility initiatives similar to Starbucks and Ben

ment that provides equal opportunity for

and Jerry’s, is that they often lack a clarity

learning and personal growth. Apart from the

BIOGRAPHY ★ Emad Rahim, DM, PMP is Dean of Business and Management at Colorado Technical University..

Corporations should maintain the strategies

organizational

and

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