4.1 Creating CSR Framework – to align CSR and Profits
CSR practices in an organization have to be woven into the fabric of operations of the organization. CSR activities can no more remain a separate voluntary function of an organization. Hence, a Three-Level CSR Implementation Framework has been proposed. This framework for implementation has to be integrated through the following three stages:
1. The Inner Corporate Level
2. The Intermediate National Level
3. The Outer Universal Level
- The Inner Corporate Level
The foundation of core values of an organization should be based on integrity, accountability and transparency. This would act as a guiding force for strategic decision makers while choosing between alternatives. Choosing between right and wrong alternative is still simple but when it comes to choosing between two right alternatives, for instance, the right to information and the right to privacy, both being fundamental rights, choosing definitely becomes difficult. This is where the concept of CSR, when woven into the operational fabric of a business, makes it easier for the decision makers to determine which ‘right’ needs priority at the given time and location.
The law and order situation of a country also depends on its economics. It often has its roots embedded in an unfair distribution of benefits to the local community of both organizational benefits and government schemes. The resultant anger is generally directed towards the big businesses, which become symbols of bodies disrupting local sustenance in collusion with the government. The promises towards larger growth are not trusted as very often development does not return anything to the local society. The unprecedented demands for community based settlements such as Gorkhaland Movement in West Bengal, the ULFA Movement in Assam and North East, and also the recent Maoist Movements in India are examples of such angered emotions.
Thus, unless the business community contributes to the crucial development needs of the surroundings, its very survival would be at threat. Participating the ‘Nation-Building’ effort is very much in the interests of the business community.
CSR is recommended to be integrated at the Operational and Process Level of an organization. This can be ensured by scrutinizing the organizational production and operational flowchart together with analyzing if the responsibilities are being handled diligently and ethically. This would avoid a poor substitute for collective agreements. This would ensure removal of the danger of many stakeholders becoming docile and flexible at the cost of overall profit mongering. As quality would be monitored at every stage, long term viability would be addressed. This would also address the potential danger of companies partnering with pseudo NGOs who suit them and setting aside the real partners for growth behind the façade of CSR.
If a firm, while pursuing its activities from sourcing raw materials to supplying products to consumers, integrates CSR at each level, it would enable it to emerge as a responsible company in the business world. The firm can begin by ensuring the following aspects:
- Resources – These cover energy, labor, capital, material and information. It should be ensured that these are sourced and allocated for the most profitable and most socially sustainable economic activity. This would make sure that social concern is built into the working of the firm from the very beginning of their production process.
- Production Processes – Processes should ensure that the satisfaction of the internal and external stakeholders is given utmost priority by the organization. These processes should include labor welfare, conservation of scarce resources, ergonomics, strict vigilance of information sharing, protection of the environment, collection and disbursement of funds by transparent and legal methods and other such activities ensuring corporate responsibility is not compromised.
- Production of Goods – When the product specifications are met, the selection of materials and design should be done responsibly so that there is no danger from it either to the human life or to the environment.
- Planning – When planning the selection of men and machinery in ‘need based marketing’ (which analyses the product) if basic need, already existing solution and current problem are taken into account, it would help understand the ethical impacts related to these aspects.
- Organizing – This function caters to decisions regarding processes, plant layout, plant location, line balancing, routings, stores and record keeping. In order to build the concept of CSR into the system, it should be ensured that the impact study of the above mentioned decisions on the internal and external conditions is done.
- Control – This refers to studying the progress of the process vis-à-vis the plan. This step should include an audit of the processes to ensure easy measurability of CSR.
- Operations – An operations strategy brings about implementation of the plans formulated by finance, marketing and general management. CSR should also be integrated at this level to ensure enterprise wide consistency in decision making. This would help the company gain a competitive advantage over the competitors.
- Human resources – The work force should be adequately managed as this would ensure satisfaction of one of the key internal stakeholder, i.e. the employees. The key areas amongst others under scrutiny should be the work culture, leadership, people, allocation of work, remuneration, performance appraisal, growth and opportunities, compensation and benefits and social awareness.