Introduction

In the past few years, organizations worldwide have begun to embrace corporate social responsibility (CSR) both as a social responsibility and for competitive advantage. As HR leaders continue to take greater responsibility and initiative regarding corporate social responsibility policies, practices and activities, it is useful to reflect upon the drivers of CSR and HR’s expanding leadership role in CSR strategy and implementation. Given the complexity of corporate social responsibility combined with globalization—such as the potential benefits to society as well as to the company—this discussion requires thoughtful consideration of not only the primary reasons organizations in many countries are beginning to now view corporate social responsibility as a vital part of their business strategy but also a solid understanding of the link between the key drivers and the benefits of corporate social responsibility and HR’s role.

Despite the extensive body of literature examining firms’ strategies for CSR, majority of this research are as case studies and surveys of the CSR initiatives and CSR reporting. Little insight exists into the implementation CSR for sustainable development. This paper seeks to address this gap by examining issues surrounding the implementation and sustenance of CSR programs. Specifically, the question of how to implement the CSR initiatives systematically for the long term benefit of the organization is examined.

Concept of CSR

The World Business Council for Sustainable Development (1998) defines corporate social responsibility as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”. According to Goralski, (1972), any working definition of Corporate Social Responsibility requires three aspects: A business expenditure or activity must be ‘one for which the marginal returns to the corporation are less than the returns available from some alternative expenditure’; it must be purely voluntary; and must be an actual corporate expenditure rather than a conduit for individual largess. Then Davis (1973) propounded, the much known, ‘Iron Law of responsibility’. According to Mehta (2004) social responsibility is essentially a subjective term. Some interpret it as no more than the ‘price’ that needs to be paid to mitigate the possibly adverse implications of a company’s activities on the local community; and others as a good proxy for ‘corporate citizenship’ whilst others as the index for corporate ethics. Other definitions have been given by Wharton & Clifton (2002). Saxena & Gupta (2005) and define CSR as ‘Part – lying with corporates – of total commitment required to achieve complete harmony between terms and demands, even conflicting ones, of three core players – Society, Government and Corporates – for growth of healthy, meaningful and sustainable ‘Business’’.

As Gillis & Spring (2001) emphasize, consumers, investors, community members and potential employees are all seeking and demanding information on a corporation’s social performance; thereby asking corporates to be conscious of their responsibilities towards society. Khandwalla, (2004) voices similar sentiments that the fundamental idea embedded in CSR is that business corporations can no longer act as isolated entities, detached from the broader issues of society. As Cherunilam (1998) puts it, there is a symbiotic relationship that needs to exist between Business and Society. He further adds that business survives using resources of society, and has responsibility to society.

Key potential benefits for firms implementing CSR

Orlitzky, Schmidt, and Rynes (2003) provide a “breakthrough” in the CSR literature with meta-analytic evidence showing a significant positive effect of corporate social/environmental performance on corporate financial performance. Mackey, and Barney (2005) theorize with a supply and demand model that investing in socially responsible initiatives will maximize the market value of the firm. These studies should bring some closure on the long-running debate (Margolis & Walsh, 2003; McWilliams & Siegel, 2000, 2001; Roman, Hayibor, & Alge, 1999; Ullmann, 1985; Wood & Jones, 1995) about whether it is in an organization’s financial best interest to engage in CSR. In two studies Greening and Turban (2000; Turban & Greening, 1997) found that job applicants’ perceptions of a firm’s corporate social performance influenced their desire to work for the firm. With regard to CSR initiatives within the organization, it was found that under unjust conditions, employees reciprocate through lowered performance and vengeful behaviors (Ambrose et.al., 2002; Aquino et.al, 2001; Tripp et.al., 2002). Research shows that when organizational authorities are trustworthy, unbiased, and honest, employees feel pride and affiliation and behave in ways that are beneficial to the organization (Huo et.al., 1996; Tyler & Degoey, 1995; Tyler et al., 1996). Organizational actors are likely to engage in CSR to emulate their peers in order to preserve their social legitimacy (Schuman, 2004) by preventing negative perceptions, and to ensure the organization’s long-term survival(Meyer & Rowan, 1977) and social license to operate (Livesey, 2001). Corporate social responsibility (CSR) has become a key component of a firm’s reputation (Argenti and Druckenmiller, 2004; Fombrun, 2005; Schnietz and Epstein, 2005).

Challenges in CSR implementation

But generally speaking, every CSR instrument has some major challenges to address.  The challenges identified are securing funds, Securing partners in implementation, Securing commitment from management, Securing commitment from employees, Securing commitment from company headquarters, Skepticism of other stakeholders on the real motives of CSR, lack of time, lack of cooperation from beneficiaries (Yoro, 2006). In India CSR lacks transparency, specific standards and often amount to little more than window-dressing and must be compared to violations of social and environmental standards within companies (Tatjana Chahoud et al.,2007). In India the CSR multi-stakeholder approachis still rather fragmented, and interaction between business and civil society organizations, especially trade unions, is still rare and takes place, at best, on an ad-hoc basis (Tatjana Chahoud et al., 2007). According to various surveys (including UNDP et al. (2002), WEF 2003), the monitoring problem persists and constitutes a possible obstacle to further CSR engagement. The extent to which companies incorporate CSR into their business processes was questioned by several of the stakeholders included in the survey, and doubts have been expressed by other empirical studies (Arora and Puranik 2004, 97). The vast majority of Indian companies include only the external dimension in their understanding of CSR. Indian companies put considerable effort into identifying beneficiaries, since they regard correct identification as one of the major challenges in their CSR engagement (Tatjana Chahoud et al., 2007). Generally Indian companies claim that they try to engage with their external stakeholders in a sustainable manner. However, what they meant by “sustainable engagement” was not absolutely clear from the companies’ answers (Tatjana Chahoud et al., 2007) The empirical results of the present study show that Indian CSR is still in a confused state in India (Arora and Puranik 2004, 98).

These clearly indicate that in many Indian organizations CSR implementation is not carried out in systematic manner except in few organizations. Hence a clear plan for implementation would aid the organizations in sustainable CSR initiatives.

Framework for CSR Implementation

There is no one-size-fits-all method for implementing a corporate social responsibility (CSR) approach: each firm has unique characteristics and circumstances that will affect how it views its social responsibilities; and each will vary in its awareness of CSR issues and how much work it has already done towards implementing a CSR approach. That being said, there is considerable value in proceeding with CSR implementation in a systematic way — in harmony with the firm’s mission, and sensitive to its business culture, environment and risk profile, and operating conditions. The bottom line is that CSR needs to be integrated into the firm’s core decision making, strategy, management processes and activities, be it incrementally or comprehensively.

This paper proposes an implementation framework comprising six key tasks (see chart below). In recognition of the fact that firms are at different levels of sophistication and development with respect to CSR, it is understood that firms may choose to forego a particular aspect or task when it has already been undertaken.

When?
(Conceptual phase)

What?
(Task delineation)

How?
(Checkpoints on the journey)