What is CSR?
Corporate Social Responsibility (CSR) is a still emerging notion for which there still does not exist a set of precisely determined and widely accepted specific criteria in terms of what it entails. Keeping in mind that the primary role of business is creating workplaces and increasing material wealth in society, CSR is generally viewed as a way for companies to achieve a balance among economic, ecological and social imperatives, while simultaneously fulfilling their business aims and the expectations of their owners or shareholders. Corporate Social Responsibility is a requirement for various companies, notwithstanding whether they function in the local or global market. The way a business treats its, especially minor, shareholders, workforce, consumers, state authorities, non-governmental organizations, international organizations and other stakeholders with whom they interact, directly or indirectly, is usually stressed as the main characteristic of this concept. The society expects companies to observe the legal and formal minimum, i.e. to respect the legal regulations; still, social responsibility does not mean that a company should merely fulfill the legal expectations, but should instead take things further and invest "more" in the development of the society and the conservation of the environment.
CSR and sustainable development
Sustainability or sustainable development is an idea of development which fulfills the current needs, but also takes into consideration the needs of future generations; actually, that is a process of transformation towards a more well-off and equal society where the natural environment and cultural achievements are improved, logically spent and conserved for future generations. To achieve a balance among economic interests, socio-economic development and various aspects of protecting the environment and treasuring natural resources is a basic aim towards which the society as a whole should strive. That is why politicians, scientists, the representatives of the civil sector and business leaders gather more often and cooperate on the modalities of global development harmonization and the solutions to the problems it carries. Generally speaking, CSR is the contribution of the business sector to the sustainable development and it is viewed as a response to the question as to how to successfully integrate economic, ecological and social imperatives.
What does society expect from the business sector?
CSR is one of the key solutions for achieving sustained development, since it represents an active contribution to the harmonization of relations between the business world as the main generator and pillar of development, and society as a whole, whose needs must also not be neglected. There are four categories of expectations that a society might have from the business sector. The economic responsibility means that the society expects companies to continue producing goods and services which clients need and want, and that they will be selling them at reasonable prices. They are expected to be efficient and profitable and to keep in mind the interest of their shareholders. Legal responsibility means that the society expects companies to respect the legal requirements in the market. Companies have numerous legal obligations which regulate each aspect of their activities, including the laws for the protection of consumers, product quality, the environment and workforce. Ethical responsibility has to do with the expectations which supersede the law itself, such as those that a company will do business correctly and ethically. That means that they are expected to take things further from purely observing the law, and make an effort to fulfill social norms, albeit they might not be legally formalized at the moment. Finally, discretional or philanthropic responsibility has to do with society's expectations that organizations should act as good citizens and actively contribute to solving social problems (poverty, unemployment, environment conservation, protection of civil rights, etc.) according to their abilities.
The Advantages of the Concept
Although the idea of CSR primarily focuses on encouraging corporate social responsibility for the benefit of the society, that does not necessarily mean that companies should do business without making profit. Incorporating ethical business principles, philanthropic activities and corporate relationships with the broad social and ecological environment are becoming, in the contemporary global system of conducting business, all the more important variables when it comes to decision-making and choosing a product on the part of consumers, or investing on the part of investors. Creating a good image, which is one of the most important resources of a company in the modern business environment, is directly connected to its business achievements; research and practice alike confirm that those companies which have incorporated the CSR policies in their business philosophy are capable of achieving better results and ensuring more stable and long-lasting growth. In other words, social responsibility is an option which brings double benefit - to companies themselves, as well as to the society as a whole.
Companies around the world are all the more motivated to get engaged in solving social problems and involving other social stakeholders (consumers, workforce, local community, etc.) in the process of decision-making because they are becoming more and more aware of how important and influential their decisions could be on the social and natural environment. In the contemporary information technology revolution and omnipresent media, such stakeholders have the power to make informed decisions and thus reward or punish companies for their behavior. In that sense, there are many benefits companies might gain from their socially responsible actions. Such are:
- Strengthening company reputation and its brands;
- Greater trust of investors and easier access to capital;
- Minimized risk by improving connections with the local community;
- Greater loyalty and motivation of the workforce;
- Increased productivity and innovation;
- Competitiveness and market positioning.
