Corporate Social Responsibility
Value-driven engagement for business success
It’s not enough to do good business. Today’s companies must also do good in order to maintain legitimacy, meet societal expectations and foster healthy client and stakeholder relationships. This is why corporate social responsibility (CSR) increasingly takes centre stage in conversations about corporate excellence, business leadership and the future of work.
When looking at CSR in the context of higher education and training colleges in Gauteng, Andries Lebakeng found that institutions recognise that they “have to play a major role in developing entrepreneurs in their communities, responding to the needs of industries and improving the standards of living within communities” while “forcing organisations to involve stakeholders in their decision-making”.
In his research, Lebakeng describes CSR as “the commitment of organisations to act in the interest of both business and sustainable economic development based on ethical values, compliance with legal requirements and respect for engagement with people, communities and the environment.” He adds that CRS does not stop with the company’s employees and investors, but extends to how a company responds to, and continuously interacts with, its vital stakeholders.
While it is justifiable for a company to make a profit, says Lebakeng, business should do more than that by being philanthropic, taking an active interest in the communities it operates in and by showing a commitment and responsibility to the natural and built environment.
“The findings from the study indicate that CSR is critical for the survival of colleges; CSR has many benefits and is the only way to proceed if they want to stay in business,” writes Lebakeng, adding that companies and institutions must recognise that successful CSR strategies benefit not only the stakeholders, but also the inner workings of the company itself.
How well a business does in cultivating these values and engaging with its stakeholders can influence the social and financial support it receives as well as the perceived corporate culture and buy-in from employees. Business leaders and captains of industry can no longer deny that corporate social responsibility is vital for business sustainability and operational longevity — the future demands heart and soul, not just brains and brawn.
Lived values for employee satisfaction
Internally, CSR initiatives influence company culture through its employees. According to a survey by Brunswick, employees increasingly expect their leaders to take a value-driven moral stand and make their voices heard when it comes to social and societal issues. According to the survey, employees believe that it is vital for CEOS to not only communicate, but live the values of the company.
“As a group, respondents ranked communicating values higher even than company strategy or profitability,” the study found.
Furthermore, it was discovered that employees value transparency from their leaders to the extent that it is likely to influence whether they remain with a company or not. More than 70% of respondents stated that they consider a company’s stance on societal issues when deciding on whether to stay or seek employment elsewhere. A business’ stance on social responsibility and its community-engagement strategy play an integral role in employee well-being and job satisfaction.
Companies don’t operate in a vacuum
Modern companies have a broader responsibility and no longer just answer to investors. Other stakeholder relationships are as important for operational success. These include customers and clients, who are increasingly value driven in where they take their business, as well as the communities that these companies operate within. An active and authentic CSR strategy that communicates the company values can make or break a business.
According to Just Capital’s 2020 survey on stakeholder capitalism, around 92% of people expect large corporations to promote an economy that serves all stakeholders as awell as to address societal issues that are prevalent in the areas in which they operate.
Customers and clients also take an organisation’s history and stance on prevalent social issues into account when they choose their products or services. The study found that almost 40% of consumers are, at any given time, boycotting at least one company on the basis of politics and values.
A deeper look at this decision reveals that 23% of boycotting consumers have made this decision based on accusations of racism from a company or its employees, with the diversity of a company’s executives also playing a role in whether they choose to do business with a company or not.
CSR and value-driven community engagement is therefore not just important for a company’s bottom line, but also for its future sutainability and corporate survival. Social responsibility is a vehicle for business success and growth.
When it comes to social and societal issues, it cannot be business as usual. Companies and their executives are expected to have a voice — and to make that voice heard when it matters most.