Linking CSR Initiatives To Business Objectives Is A Must For Companies

By CSR Pulse

Corporate social responsibility (CSR) is a term frequently used in the business world today. While some companies really take the matter to heart and want to help their communities, others see CSR simply as a way to improve their image and please customers, investors and stakeholders.

But even though more corporations are getting involved in CSR, Jeanette Teh, assistant professor of Business Administration at the American University in Dubai, says the CSR initiatives generally have no link to companies’ organisational business strategy. Thus, companies which initiate CSR programmes to enhance their image won’t enjoy optimal social or financial return on their investment.

US strategy expert and university professor, Michael Porter, stresses the importance of creating shared value. By that he means creating value for the society through addressing its needs at the same time as increasing profits for the company. This concept serves to show CSR shouldn’t be a footnote or an afterthought. On the contrary, it should be a core strategy, coupling corporate success with social progress.

Of course, this is all great in theory, but how can it be achieved? Professor John Milliman and his colleagues from the University of Colorado might hold the answer. They have developed a five-step process to implement Porter’s notion.

#1 The first step is for the company to determine whether any social issues could become a strategic advantage. For example, with over 30% of UAE population classified as obese, companies ought to consider promoting a healthier lifestyle. Also, since many UAE companies see CSR as the corporate form of Zakat – the Islamic concept regarding one’s duty to contribute to charity – a large portion of the corporate CSR initiatives revolve around charitable donations. These are just examples of how a committee of representatives from various company departments should think when linking social issues to corporate initiatives.

#2 The second step is for that committee to generate ideas of how to make the most of opportunities and reduce threats. For instance, if the company’s CSR is about offering internships to young people, it can also consider training sessions and mentorships as alternative ways to lower the number of jobless youngsters.

#3 The third step involves careful analysis of all alternatives the committee has come up with, judging which one would be best for the company, considering financial, human resource, social and other factors. Employees shouldn’t be neglected in this phase – their opinions matter. They are a company’s driving force and an important, though sometimes overlooked, stakeholder.

#4 The fourth step is implementing the chosen initiative. It is advisable for the company to discuss it with community members, governmental organisations and other stakeholders before implementation.

#5 The fifth step revolves around measurement and reporting. Once the programmes have been implemented, companies need to measure the results, determining whether they are successful in achieving marked objectives and resolving issues, as well as whether stakeholders are happy with the outcomes. Results should be made known across the company, but to the community and other stakeholders too, if the company wishes to improve its corporate image.