Managing Corporate Social Responsibility through labour standards as a means for promoting sustainable development.

Managing Corporate Social Responsibility through labour standards as a means for promoting sustainable development.

Introduction.

According to Kakabadse et al., (2005), Corporate Social Responsibility (CSR) is the ethical behaviour that leads the business towards the constitutes of the stakeholders. Thus, it is a concept that incorporates the cues of acceptable civilized society and defines how an organization should hold the stakeholders both inside and outside the business environment. The stakeholders and organization create the natural environment should, therefore, responsibly treat them. The broader aim of corporate social responsibility develops higher standards of stakeholders’ value. In the process, the organization can promote sustainable development and eventually improves its productivity. As such, CRS creates a set of guidelines that the organization can use for people both within and outside the organization. Safe to say, while the organizations seek on promoting sustainable development, there may lack a universal language that leads to poor interpretation of the corporate responsibility on the terms of labour. For instance, the mere responsibility of assuming an obligation for promoting the wellbeing of the employees may get assumed. Such is mostly because many organizations put more emphasis on improving performance levels and end up forgetting their social responsibility of promoting motivation among the workers.

The paper places emphasis on managing corporate social responsibility that related to the development of labour codes that should get followed in the organization. Researchers believe that improving performance levels is not enough and should preferably get coupled with social responsiveness. Manager must begin by accepting that they have a role of social responsibility. Once they have accepted, the next step is responding in a way that makes social, economic, ethical, philosophical, political, and economic sense.

Why should companies get engaged in CSR?

Socially responsible companies, accrue more profits and develop an environment that promotes the wellbeing of the stakeholders (Moir, 2001). For in instance if a company’s practices impact both within and outside the firm, the manager can introduce more attractive labour benefits that attract employees. While it may involve some costs, the benefits will outweigh the costs in the long run. Corporate social responsibility is not a new issue many organizations have been having problems relating to the work environment. Such is mostly because they have an extremely restrictive work environment or the employees feel that they are not getting enough benefits according to their responsibilities in the organization. The issue has been a theory in the practice of law as many guidelines outline the treatment of the employees who are crucial stakeholders in the organization. The debate has been simmering over the decades until it became a global concern added to the awful events of sustainable development. All came into the limelight after the collapse of the Enron and WorldCom after the employees got involved in dubious accounting practices (Hopkins, 2006). After the probe into the matter, it got identified that despite the friendliness of its CEO, employees got held in less repute that shifted their interest and commitment away from the organization.

The company had failed to address the low living standards, poverty, and exploitation of the employees which is a huge aspect of social responsibility. They had not taken their role in promoting sustainability among the employees. The company had continued its practices along the autonomous path ignoring the critics of employee exploitation. The employees were distrustful to the company, and the fragile nature of the organization began until the company finally collapsed. The focus should be on how the large organizations that contribute a large portion of the global trade balance treat their employees. There are dangerous consequences that may result from the improper distribution of factor endowments regarding the treatment of employees. Companies should not assume the crucial importance of their labour codes on social wellbeing.

Today, it can get seen that consumers are quick to avoid products from companies perceived as socially responsible. Enterprises are increasingly acting on the societies best interest, which can only get ensured through the way that they treat their employees. Employees are crucial stakeholders who have a significant effect on potential investors, business partners and customer relations. In countries like the USA and UK, companies incorporate social responsibility policy in their investment principles (Jamali, 2008). They are required to document the aims, scope, and the restrictions that they put to their employees. The government identified that the employees form part of the community, and any mistreatment would impact the society at large. Also, the Ethical Investment Research Services has identified guidelines that can help the organization from being implicated as socially irresponsible. Of course, there are penalties on professional found guilty of overlooking the concept of social responsibility while amid sustainable development. However, the biggest challenge comes in learning the conducts of the business from the inside. Such is because large companies face a two-sided verdict, i.e., the multimillion verdict and adhering to compliance requirements. Thus, there lack whistle-blowers on the public perception of the corporate social responsibility of the particular organization.

Sustainable development involves a series of principles that lead the organization in structuring its costs and benefits. In all the principles, the organization must seek to provide value and a clear and stakeholders model. That said, corporate social responsibility is a voluntary principle for every organization which a massive cost of compliance. Companies should view CSR as a gradual movement rather than a substitute for legislation. They must put more concern on developing a proper regulatory framework that defines the basis of social responsibility through integrating social and environmental standards for the employees. In correspondence, there should be more dialogue and engagements between the organization and the stakeholders. Proper engagement of the CSR issues promotes sustainable development in the organization as the behaviour both within and outside the organization exceeds the set standards, especially for competitors in their level (O’riordan and Fairbrass, 2008). The biggest problem would be getting identified as a rogue company that limits legislation for holding the interests of the stakeholders in a minimalistic position.

Concepts of corporate social responsibility.

• Avoid excessive exploitation of labour and bribery during performance appraisals.
• Put more emphasis on the wellbeing of human resources by branding and making it easier to build a good working environment that would generate more profitability, sustainability and overall growth.
• Help increase the balance between the company and its employees.
• Build a broader community that is more competitive, thus increasing organizational development around the world.
• Eliminate bureaucracy, thus reducing the cost of employee observations.
• Develop a criterion that fosters constant business evolution.
• The cost of sustainability and profitability would reduce as all stakeholders are working as a community.

More and more organizations are increasingly focusing on voluntarily embracing CSR in their operations. However, in light of many cases of poor corporate governance, it becomes tough to exert efforts on the necessary legislation. There is a big question on who should regulate CSR principles. Below are the probable regulators:

At the national level, there are strict regulations that aim at creating corporate sustainability. However, the institutions are more concerned with making it a voluntary measure for every organization rather than regular lobbying. The problem is that only a few organizations will include the legislations in their operations.

• The corporate sector.

The corporate sector states that voluntary CSR is the foreseeable future. The corporate sector emphasizes on making companies hire CSR consultancies and advocates who become the legislators of humanity in the organization. The consultants and advocates will help the companies in finding their way to proper utilization of the CSR principles. If the organization comes to admiring transparency, honesty, and good corporate governance, the characteristics of CSR and sustainable development would be visible.

The business case for CSR.

Many organizations hold the belief that social responsibility begins with increasing the profits of the organizations. However, the internationalization of the economy has created a new impact on human development. Such has increased the pressure on the problems of underdevelopment on employee relations. In the long term, organizations should get maximum efforts and increase anticipation for the best interests of the people (Bhattacharya, 2009). As such, it is possible to link the CSR actions to the financial indicators in organizations like market value, return on assets and economic value. It is because the correlation occurs due to the underlying level of human development as the employees are the most significant commentators and create more chance for growth. Several primary issues may lead to a qualitative understanding of the business case on CSR. These include:

• The problem of developing equity in a company reputation. Employees may harm or build an organization’s reputation. Reputation gets built through enhancing transparency, credibility, consistency, quality, and intangibles such as investment in the employees and enhancing diversity in the work environment (Dowling, 2004).
• Setting more finances for employee development. Organizations are unwilling to put more socially responsible investments on their stakeholders. There is a growing case on the need to support employees from the market and societal pressure. There is an increasing concern about making environmental and social performance a trend throughout the industry.
• Many organizations, due not create emphasis on employee motivation to attract and retain top-level talents. Given that the greatest percentage of the value of the economy comes from the intellectual capital, organizations need to ensure favourable treatment of the internal stakeholders.
• Factor such are changing trends in technologies, market expectations, and societal regulation has a substantial impact on how the organization embraces the broader perspective of cross-border business relationships. Lose of investments may hamper proper investment decisions. As a result, more organizations are concerned with the risk of investment rather than building the reputation and credibility among the employees.
• Lastly, there is a massive difference between the public expectations of CSR and the perceived role of the organization.

Benefits of CSR to an organization.

Many companies do not view the concept of developing corporate citizenship that is parallel to the CSR principles. In the context, building a good relationship with the employees has several benefits that include:

• Reputation management.
• Learning and innovation.
• Competitiveness and market positioning.
• Build investors relations.
• Employee recruitment and motivation.
• Risk management and reducing the risk profile.
• Improve operational efficiency.

Benchmarks for CSR.

There is no absolute benchmark for CSR principles. However, some companies such as Body Shop, Shell, Telecom get seen as role models. Subsequently, there are many codes of conduct and principles that organizations around the world opt to follow. The codes have been increasing, and new codes get developed now then. As such, there is no specific principle that can be generally applied. Thus, every organization should adopt behaviours that promote the appropriate governance and proliferate the outcomes of the employees. CSR has primary implications that many managers do not understand. First is that in the process of improving labour conditions, they end up building an excellent reputation for the government. Second, it raises stakeholder confidence as they begin to see their significance in the success of the organization. Thirdly, it establishes management commitment to ethical behaviours that promote the overall corporate governance. As such, it demonstrates more corporate prevention and response to issues within the organization. Fourthly, it promotes high standards of transparency and accountability.

Conceptual difficulties.

One of the biggest challenge that organizations face in the process of devising a conceptual basis for CSR. The principle that the organization should seek to incorporate in their labour codes should include corporate sustainability, corporate citizenship, and proper business ethics. If the conceptual basis is poor, the organization may not find it easy to develop codes of conduct that have a useful framework. The conceptual basis used by the organization raises concerns on its approach for a clear statement of principles. CSR should measure on the following concepts:

• Principles of social responsibility.
• Principle of societal relationships.
• Process of social responsiveness.

In practice, the notion of CSR on labour conditions should describe sustainable ways of developing a good environment for the employees (Fox, 2004). It must also create concern on the economic and social considerations through the basis of a code of conduct. The initial attraction should get maintained on the employees alongside the usual notion of organization productivity. Although the two notions cannot get placed at the same level, it is clear that no organization can survive without embracing social and environmental considerations. Therefore, corporations should focus on creating stakeholders value which can then impact their profits.

A company that does poorly on one line say focusing on productivity cannot build sustainable development. Such an organization is unable to achieve success in the competitive world. The idea of improving labour conditions at an international level has become a social clause with the efforts of promoting fair competition and ensuring the standard of labour and human development. The ILO has been active in producing labour standards and new instruments for employee treatment (Blanpain and Colucci, 2004). The standards involved include the freedom of association for the employees, employee discrimination, recognizing the rights for collective bargaining, the minimum age for employment, and forced labour. Analysts are increasingly adding a range of areas that need to be covered. The analysts are trying to build general principles that would get used for countries with weak administrative machinery.  Thus, there remains a considerable gap between the international recognitions of core labour standards and the proper application.

Conclusion.

There is a piece of accumulating evidence that corporate social responsibility and sustainable development is becoming a global concern. Companies are blazing a path of spending on social impacts.  There has been a mandatory demand for greater transparency and in-depth analytical work in all processes. There is a range of institutions that have developed concerns on the set of labour standards and social protection for employees in organizations. They are seeking to develop an international agreement on working conditions. Since the beginning of the paper, the concern has been on developing global principles that all organizations should adhere and report. Institutions such as the Global Reporting Initiative and the OECD Principles of Governance should put more concern on developing sanctions for non-compliance on labour conditions. Such negotiation should be a once-and-for-all engagement and should not be subject to regular alterations. It should be a form of a continuing process that should only get developed through global guidelines.

Stakeholders groups such as trade unions, non-unionized workers have a role in ensuring the implementation of corporate social responsibility. Every organization should view CSR levels as Key Performance Indicators based on its obligations to the employees who are members of the general public. Every level of the proper application of corporate social responsibility should define the relationship between the organization and the society. Safe to say, the achievement of the objectives has long term benefits to the organization as it increases productivity. Having identified the motivating principles, power of stakeholders and internal identities promote a responsibility to give back to the community through proper treatment of employees.

References.

Bhattacharya, C.B., Korschun, D. and Sen, S., 2009. Strengthening stakeholder–company relationships through mutually beneficial corporate social responsibility initiatives. Journal of Business

Blanpain, R. and Colucci, M., 2004. The globalization of labour standards: The soft law track. Kluwer Law International BV.

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Kakabadse, N.K., Rozuel, C. and Lee-Davies, L., 2005. Corporate social responsibility and stakeholder approach: a conceptual review. International Journal of Business Governance and Ethics, 1(4), pp.277-302.

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O’riordan, L. and Fairbrass, J., 2008. Corporate social responsibility (CSR): Models and theories in stakeholder dialogue. Journal of business ethics, 83(4), pp.745-758.