Corporate Social Responsibility Model: Changing the Way Corporate Giants Do Business

Enhancing education, partnering with the World Wildlife Fund, committing to Conservation International’s sustainability efforts.

These are just some ways in which big corporations are leaning hard on a corporate social responsibility business model.

Last week, we talked about social responsibility and how it can be passive or active.

Corporate social responsibility (CSR) is an active approach in which businesses consciously change the way they do business in order to positively impact society.

CSR Objectives

There are two main motives to CSR:

  1. To improve quantitative social aspects – including the company’s societal impact
  2. To improve qualitative social aspects – including efficient employee management and processes

This relatively new concept of CSR has evolved as shareholders have. Today’s shareholders are often concerned in a company’s ripple-effect – its impact on the environment and society – rather than simply on the bottom line.

Industrial repercussions are at the forefront of the social conscience, thus shareholders are more apt to hold a corporation responsible for environmental and social impact.

This is not an individualist approach to business; it’s a collectivist approach.

personal values societal resp.jpg

As you can see in the chart above, rule-based/individualist cultures lean towards personal responsibility, while relationship-based cultures lean towards societal responsibility.

In this way, you can see how economic management business models can benefit from cultural values other than our own.

CSR injects rule-based cultures with relationship-based cultural values.

And it’s a beautiful thing.

Mandated CSR

In some cases, governments mandate corporate social responsibility.

India, for example, required that companies donate 2% of net profits to charitable organizations in 2014, becoming the first country to enact such legislation.

The law required that a CSR board committee be established within the company, designating that 2% over the previous three years’ net profit to CSR. The board director would, at fiscal year’s end, review the company’s efforts to ensure compliance.

But, oftentimes, CSR is voluntary, as in the following cases.

Voluntary CSR

Microsoft’s Bill Gates is well known for his charitable efforts.

The Bill and Melinda Gates Foundation has done a huge part in eradicating hunger and poverty.

The Microsoft company, itself, has focused its efforts on social responsibility, with the Reputation Institute’s Chief Research Officer, Stephen Hahn-Griffiths, stating:

“Microsoft is committed to enhancing education as a highly relevant global human issue – and, unlike Apple, operates as an open-source platform that fosters perceptions of good citizenship and good governance.”

Another example of CSR done right is the Danish company, Lego.

Lego promotes sustainability, partnering with the World Wildlife Fund to fulfill its “Build the Change” and “Sustainable Materials Center” initiatives.

In 2017, Lego extended this partnership, with goals to push global action on climate change and reduce manufacturing- and supply chain-CO2 emissions.

These are just two examples of CSR in action.

What do you think of corporations taking an active approach in positive social change? As a conscious consumer, does a corporation’s social responsibility influence your purchases?