Business & Society- Mission, Vision, Values

 Mission, Vision, Values

A mission statement is a statement of the purpose of a company, organization or person, its reason for existing.The mission statement should guide the actions of the organization, spell out its overall goal, provide a path, and guide decision-making. It provides the framework or context within which the company's strategies are formulated. It's like a goal for what the company wants to do for the world. The mission statement should define who your primary customers are, identify the products and services you produce, and describe the geographical location in which you operate.

It's more important to communicate the mission statement to employees than to customers. Your mission statement doesn't have to be clever or catchy just accurate. If your review results in a revision of the statement be sure everyone in the company is aware of the change. Once you have designed a niche for your business, you're ready to create a mission statement. Equally important, the mission statement signals what your business is all about to your customers, employees, suppliers and the community.

The mission statement reflects every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community.

Essentials components:

1. Key market: Who is your target client or customer generalize if needed
2. Contribution: What product or service do you provide to that client
3. Distinction: What makes your product or service unique, so that the client would choose you

Vision

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.In order to determine the future direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue particular courses of action. Generally, strategic planning deals with at least one of three key questions:

1. What do we do
2. For whom do we do it
3. How do we excel

Values

These includes: Standards, Morals, Ethics, Ideals, Principals, Beliefs, Prices and tenets

COCA-COLA as an example of CSR

The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a Roadmap for winning together with our bottling partners.

Our Mission

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.

• To refresh the world...
• To inspire moments of optimism and happiness...
• To create value and make a difference.

Our Vision

Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.

• People: Be a great place to work where people are inspired to be the best they can be.
• Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.
• Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.
• Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.
• Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.
• Productivity: Be a highly effective, lean and fast-moving organization.

Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality.

Live Our Values

Our values serve as a compass for our actions and describe how we behave in the world.

• Leadership: The courage to shape a better future
• Collaboration: Leverage collective genius
• Integrity: Be real
• Accountability: If it is to be, it's up to me
• Passion: Committed in heart and mind
• Diversity: As inclusive as our brands
• Quality: What we do, we do well

Focus on the Market

• Focus on needs of our consumers, customers and franchise partners
• Get out into the market and listen, observe and learn
• Possess a world view
• Focus on execution in the marketplace every day
• Be insatiably curious

Work Smart

• Act with urgency
• Remain responsive to change
• Have the courage to change course when needed
• Remain constructively discontent
• Work efficiently

Act like Owners

• Be accountable for our actions and inactions
• Steward system assets and focus on building value
• Reward our people for taking risks and finding better ways to solve problems
• Learn from our outcomes -- what worked and what didn’t

Be the Brand

• Inspire creativity, passion, optimism and fun

Coca-Cola on social –Face book, Twitter

Business and humanity are not separate to nature

Business must be inspired by and run in harmony with nature if we are to escape our damaging reductionist view of the world. Thewise man, Homo sapiens or clever apes in a spot of bother having traversed through ancient civilizations and the history of man, that if humanity is to have any hope of anything resembling a successful future, we must either radically change our exploitation of natural resources or radically reduce our world population.The message was clear – adapt or die – and business leaders, world thinkers, activists and innovators are increasingly calling for a paradigm shift in our approach to economic and social life.The social and scientific revolutions in modern, early modern and even ancient ages have left their legacies in the modern mind.

Our prevailing reductionist approach to science, technology and business, which we use to understand the nature of complex things by reducing them to the interactions of their parts, has encouraged us to see ourselves as separate from nature, and to view the world around us as something to be analyzed and over-exploited for our own wants and needs, with scant regard for the consequences.

A corruption of survival of the fittest

Our prevailing view of nature as a battleground of competing species, each fighting to survive, is a narrow view of a more complex picture. When Charles Darwin published his Origin of Species, the phrase survival of the fittest was quickly co-opted and distorted by powerful elites to promote the idea that only the biggest, strongest, and most powerful can survive.

Recent scientific discoveries, coupled with advances in systems thinking and quantum theory, continue to build on these findings, and are uncovering a more complex and complete view of nature, the workings of the universe, and the evolution of life.

• Re-designing new ways of operating and innovating beyond less bad into doing well.

• Re-connecting and reconciling our human relationship with life and nature and our own authentic human nature this involves re-establishing our vital bond with ourselves, our neighbor’s and the web of life.

• Re-kindling wisdom by working with nature and operating within the rules of life on Earth.

 

 

Social business

Social Business and the future of capitalism and Building Social business. The new kind of capitalism that serves humanity's most pressing needs. A Social Business is defined as: business

• Created and designed to address a social problem
• A non-loss, non-dividend company, i.e.

1. It is financially self-sustainable and
2. Profits realized by the business are reinvested in the business itself (or used to start other social businesses), with the aim of increasing social impact, for example expanding the company’s reach, improving the products or services or in other ways subsidizing the social mission.

Unlike a profit-maximizing business, the prime aim of a Social Business is not to maximize profits (although generating profits is desired). Furthermore, business owners are not receiving any dividend out of the business profits, if any.On the other hand, unlike a non-profit, a Social Business is not dependent on donations or on private or public grants to survive and to operate, because, as any other business, it is self-sustainable. Furthermore, unlike a non-profit, where funds are spent only once on the field, funds in a Social Business are invested to increase and improve the business' operations on the field on an indefinite basis.

Seven Principles of Social Business

• Business objective will be to overcome poverty, or one or more problems such as education, health, technology access, and environment which threaten people and society; not profit maximization
• Financial and economic sustainability
• Investors get back their investment amount only; no dividend is given beyond investment money
• When investment amount is paid back, company profit stays with the company for expansion and improvement
• Environmentally conscious
• Workforce gets market wage with better working conditions
• Do it with joy

Corporate social responsibility

Corporate social responsibility (CSR), also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business is a form of corporateself-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. In some models, a firm's implementation of CSR goes beyond compliance and engages in actions that appear to further some social good, beyond the interests of the firm and that which is required by law. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.

Why social corporate responsibility

Cost-benefit analysis with a resource-based view

In competitive markets the cost-benefit analysis regarding positive financial outcomes upon implementing a CSR-based strategy, can be examined with a lens of the resource-based-view (RBV) of sustainable competitive advantage. inimitable (I) and non-substitutable  A firm can conduct a cost benefit analysis through a RBV-based lens to determine the optimal and appropriate level of investment in CSR, as it would with any other investments. A firm introducing a CSR-based strategy might only sustain high returns on their investment if their CSR-based strategy were inimitable (I) by their competitors. In competitive markets, a firm introducing a CSR-based strategy might only sustain high returns on their investment and there may only be a short-lived strategic competitive advantage to implementing CSR as their competitors may adopt similar strategies.

Social accounting, auditing, and reporting

For a business to take responsibility for its actions, that business must be fully accountable. Social accounting, a concept describing the communication of social and environmental effects of a company's economic actions to particular interest groups within society and to society at large, is thus an important element of CSR.

Social accounting emphasizes the notion of corporate accountability is defines social accounting in this sense as an approach to reporting a firm’s activities which stresses the need for the identification of socially relevant behavior, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques

Social license

Social license generally refers to a local community’s acceptance or approval of a company’s project or ongoing presence in an area. It is increasingly recognized by various stakeholders and communities as a prerequisite to development. The development of social license occurs outside of formal permitting or regulatory processes, and requires sustained investment by proponents to acquire and maintain social capital within the context of trust-based relationships. Often intangible and informal, social license can nevertheless be realized through a robust suite of actions centered on timely and effective communication, meaningful dialogue, and ethical and responsible behavior.

Local conditions, needs, and customs vary considerably and are often opaque, but have a significant impact on the likely success of various approaches to building social capital and trust. These regional and cultural differences demand a flexible and responsive approach and must be understood early in order to enable the development and implementation of an effective strategy to earn and maintain social license. Governments could facilitate the necessary stakeholder mapping in regions for which they are responsible and provide a regulatory framework that sets companies on the right path for engagement with communities and stakeholders. Social media tools empower stakeholders and communities to access and share information on company behaviors, technologies, and projects as they are implemented around the world. Understanding and managing this reality will be important for companies seeking social license. Voluntary measures integral to corporate-responsibility frameworks contribute to achieving social license, particularly through enhancing a company’s reputation and strengthening its capacity for effective communication, engagement, and collaboration. However, such measures do not obviate the need for project-specific action to earn and maintain social license. The growing reliance on social media tools by stakeholders and proponents alike, and the risks associated with disclosure through them, may lead to an increase.

Potential business benefits

The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones found a correlation between social/environmental performance and financial performance. However, businesses may not be looking at short-run financial returns when developing their CSR strategy. Intel employs a 5-year CSR planning cycle.The definition of CSR used within an organization can vary from the strict stakeholder impacts definition used by many CSR advocates and will often include charitable efforts and volunteering. CSR may be based within the human resources, business development or public relations departments of an organization, or may be given a separate unit reporting to the CEO or in some cases directly to the board. Some companies may implement CSR-type values without a clearly defined team or programme.

Triple bottom line

People planet profit, also known as the triple bottom line, are words that should be used and practiced in every move an organization makes. People relates to fair and beneficial business practices toward labor, the community and region where corporation conducts its business. Planet refers to sustainable environmental practices. A triple bottom line company does not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals for example. Profit is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit.

Despite the fact that adopting this triple measure has helped some companies be more conscious of their social and moral responsibilities the triple bottom line has its critics. The first criticism is that the reporting of environmental and social/moral responsibilities is selective and ignores some real moral demands, thus substituting the adopted list for a company or its members paying attention to its myriad moral obligations. The second criticism is that there is no guaranteed-upon way to carry out the environmental and social/moral audits comparable to the way that companies carry out their financial audits-much of which is governed by government requirements. An inherent difficulty with any social reporting is that it is not quantifiable in the way that a financial report is. There is no quantitative method that captures what is significantly at issue and no agreed-upon way to represent qualitative measures.

Human resources

A CSR program can be an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering. CSR has been found to encourage customer orientation among frontline employees.

 

Risk management

Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks

Brand differentiation

In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group, The Body Shop and American Apparel are built on ethical values. Business service organizations can benefit too from building a reputation for integrity and best practice.

Engagement plan

An engagement plan will assist in reaching a desired audience. A corporate social responsibility team or individual is needed to effectively plan the goals and objectives of the organization. Determining a budget should be of high priority. The function of corporate social responsibility planning: 1. To add discussion and analysis of a new set of risks into corporate decision-making. 2. To represent issues within the corporation that watchdogs, NGOs and advocates represent within society. 3. To assess the future. An organizations long term and short term future needs to be thought of. 4. To help prioritize consideration of socially and environmentally friendly projects that might otherwise lack a corporate advocate. 5. To keep corporations aware of potential major societal impacts even when a negative impact may not be immediate, and thus lessen liability. 6. To positively influence decision making where societal impacts are maximized, whilst ensuring efforts are within a given budget.

Developing an engagement plan

Commit to coming up with and improving on your companies goals. CSR commitments communicate the nature and direction of the firm's social and environmental activities and, will help others understand how the organization is likely to behave in a particular situation

1. Do a scan of CSR commitments
2. Hold discussions with major stakeholders
3. Create a working group to develop the commitments
4. Prepare a preliminary draft
5. Consult with affected stakeholders
6. Revise and publish the commitments
7. Consider what is feasible within the budget
8. To ensure employee buy-in, include employees in the process of developing the vision and values. To spark the process, create a CSR working group or hold a contest for the best suggestions, encouraging employees and their representatives to put some thought into their submissions.
9. Host a visioning session and ask participants to think about what the firm could look like in the future as a CSR leader.
10. Review the CSR priorities to determine which codes of ethics or conduct fit best with the firm's goals.

Consultants are recommended when planning for CSR activities involving small, medium and large sized corporations. All levels of management should be on board, and the support of high ranking corporate officials should be given.

License to operate

Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity, or the environment seriously as good corporate citizens with respect to labor standards and impacts on the environment.

Supplier relations

Businesses are constantly relying on suppliers to reduce overall costs, while improving the quality of their goods or services. Many North American companies have downgraded the volume of suppliers they do business with, and award contracts to a select few, in order to lower operating costs. By establishing a strong supply chain, companies are able to push for continuous quality improvements, and price reductions. The long-term benefits of the listed above create a better value for stakeholders.

Some multi-national companies like General Motors can shift suppliers, if a lower offer is made by the competition. As a result, competitiveness, and greater profits are created, in turn contributing to a stronger market

The strategic use of supplier relations can benefit single, double and triple bottom-lines. Corporations excelling in supply relations include Wal-Mart, Ford, General Motors, Toyota and Nestle. All companies listed above have gained tangeable results through the practice of ensuring sound supply chains, and sourcing materials from ethical sources.

Emphasizing the importance of practicing CSR to suppliers, researching their existing supply chain, and sending out CSR check-sheets to existing suppliers is important to staying on-track of a company’s implemented CSR activity.

Common Types of Corporate Social Responsibility Actions

There are many aspects of corporate social responsibility; whether a company decides to develop one area of CSR, or multiple, the end result is a more profitable company experiencing a higher level of employee engagement. The following is a list of common ways corporate social responsibility is implemented by organizations.

1. Environmental Sustainability: Areas include recycling, waste management, water management, using renewable energy sources, utilizing reusable resources, creating 'greener' supply chains, using digital technology instead of hard copies, developing buildings according to Leadership in Energy and Environmental Design (LEED)® standards, etc. There is a business sector dedicated to specifically to environmental sustainability consulting for businesses of any size to utilize. The highest ranked sustainability consulting firm is Ernst & Young

2. Community Involvement: This can include raising money for local charities, supporting community volunteerism, sponsoring local events, employing people from a community, supporting a community's economic growth, engaging in fair trade practices, etc.Starbucks is an example of a company that focuses on community involvement and engagement; since these programs began the company has seen higher profits and greater employee engagement.

3. Ethical Marketing Practices: Companies that ethically market to consumers are placing a higher value on their customers and respecting them as people who are ends in themselves. They do not try to manipulate or falsely advertise to potential consumers. This is important for companies that want to be viewed as ethical.

Criticisms and concerns

Critics of CSR as well as proponents debate a number of concerns related to it. These include CSR's relationship to the fundamental purpose and nature of business and questionable motives for engaging in CSR, including concerns about insincerity and hypocrisy.

Nature of business

Milton Friedman and others have argued that a corporation's purpose is to maximize returns to its shareholders, and that since only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Although they accept that corporations should obey the laws of the countries within which they work, they assert that corporations have no other obligation to society. Some people perceive CSR as incongruent with the very nature and purpose of business, and indeed a hindrance to free trade. Those who assert that CSR is contrasting with capitalism and are in favor of the free market argue that improvements in health, longevity and/or infant mortality have been created by economic growth attributed to free enterprise.

Critics of this argument perceive the free market as opposed to the well-being of society and a hindrance to human freedom. They claim that the type of capitalism practiced in many developing countries is a form of economic and cultural imperialism, noting that these countries usually have fewer labor protections, and thus their citizens are at a higher risk of exploitation by multinational corporations.

A wide variety of individuals and organizations operate in between these poles. For example, the REALeadership Alliance asserts that the business of leadership be it corporate or otherwise is to change the world for the better. Many religious and cultural traditions hold that the economy exists to serve human beings, so all economic entities have an obligation to society. Moreover, as discussed above, many CSR proponents point out that CSR can significantly improve long-term corporate profitability because it reduces risks and inefficiencies while offering a host of potential benefits such as enhanced brand reputation and employee engagement.

Motives

Some critics believe that CSR programs are undertaken by companies such as British American Tobacco (BAT), the petroleum giant BP well known for its high-profile advertising campaigns on environmental aspects of its operations, and McDonald's to distract the public from ethical questions posed by their core operations. They argue that some corporations start CSR programs for the commercial benefit they enjoy through raising their reputation with the public or with government. They suggest that corporations which exist solely to maximize profits are unable to advance the interests of society as a whole. Companies claim to promote CSR and be committed to sustainable development but simultaneously engage in harmful business practices.

Critics concerned with corporate hypocrisy and insincerity generally suggest that better governmental and international regulation and enforcement, rather than voluntary measures, are necessary to ensure that companies behave in a socially responsible manner. A major area of necessary international regulation is the reduction of the capacity of corporations to sue states under investor state dispute settlement provisions in trade or investment treaties if otherwise necessary public health or environment protection legislation has impeded corporate investments. CSR should be considered more as a corporate moral responsibility, and limit the reach of CSR by focusing more on direct impacts of the organization as viewed through a systems perspective to identify stakeholders.

Principles

The main principles involving corporate social responsibility involve economic, legal, ethical and discretionary aspects. A corporation needs to generate profits, while operating within the laws of the state. The corporation also needs to be ethical, but has the right to be discretionary about the decisions it makes. Levels of corporate social responsiveness to an issue include being reactive, defensive, responsive and interactive. All terms are useful in issues management. Selecting when and how to act can make a difference in the outcome of the action taken.

Ethical consumerism

The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand. Industrialization, in many developing countries, is booming as a result of both technology and globalization. Consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are therefore beginning to make purchasing decisions related to their environmental and ethical concerns. However, this practice is far from consistent or universal.

Globalization and market forces

As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental restrictions and varying standards of what constitutes labor exploitation are problems that can cost organizations millions of dollars. Some view ethical issues as simply a costly hindrance, while some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. Global competition places a particular pressure on multinational corporations to examine not only their own labor practices, but those of their entire supply chain, from a CSR perspective that all government is controlling.

Social awareness and education

The role among corporate stakeholders is to work collectively to pressure corporations that are changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly. The extension of SRI bodies driving corporations to include an element of ‘ethical investment’ into their corporate agenda’s generates socially embedded issues. The main issue correlates to the development and overall idea of ethical investing or SRI, a concept that is constructed as a general social perspective. The problem becomes defining what is classified as ethical investing. The ethics or values of one SRI body will likely different from the next since ethical opinions are inherently paradoxical.

Ethics training

The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behavior and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. There is the need for learning normative values and rules in human behavior. The most direct benefit is reducing the likelihood of dirty hands, fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization.Caterpillar and Best Buy are examples of organizations that have taken such steps.

Geography

In a geographical context, CSR is fundamentally an intangible populist idea without a conclusive definition. Corporations who employ CSR behaviors are empirically dissimilar in various parts of the world. The issue of CSR diversity is produced through the perpetual differences embedded in the social, political, cultural, and economic structures within individual countries. The immense geographical separations feasibly contribute to the loosely defined concept of CSR and difficulty for corporate regulation.

Public policies

CSR has inspired national governments to include CSR issues into their national public policy agendas. The increased importance driven by CSR, has prompted governments to promote socially and environmentally responsible corporate practices. Over the past decade governments have considered CSR as a public issue that requires national governmental involvement to address the very issues relevant to CSR. The heightened role of government in CSR has facilitated the development of numerous CSR programs and policies. Specifically, various European governments have implemented public policies on CSR enhancing their competence to develop sustainable corporate practices. CSR critics such as Robert Reich argue that governments should set the agenda for social responsibility by the way of laws and regulation that will allow a business to conduct them responsibly. Actors engaged in CSR:

• governments
• corporations
• civil societies

Recently15 European Union countries have actively engaged in CSR regulation and public policy development. Recognizably, the CSR efforts and policies are vastly different amongst countries resultant to the complexity and diversity of governments’, corporations’, and civil societies’ roles. Scholars have analyzed each body that promotes CSR based policies and programs concluding that the role and effectiveness of these actors are case-specific. Global issues so broadly defined such as CSR generate numerous relationships between the different socio-geographic players.A key debate in CSR is determining what actors are responsible to ensure that corporation’s are behaving in a socio-economic and environmentally sustainable manner.

Regulation

The issues surrounding corporate regulation pose several problems. The concept of regulation is inherently difficult to address because of the numerous corporations that exist are vastly dissimilar in terms of corporate behavior and nature. Thus, regulation in itself is unable to cover every aspect in detail of a corporation's operations. Government regulation or public institutional regulation is difficult to achieve. Depending on the political regime and form of government – democracy, parliamentary, presidential – issues of governmental ineffectiveness may transpire. As a result, attempts at CSR policy development and implementation may be unattainable.

The second issue is the financial burden that regulation can place on a nation's economy, on the concerns of economic loss and national interest. Critics of CSR also point out that organization pay taxes to government to ensure that society and the environment are not adversely affected by business activities.

The government of Canada has adopted a national position that expects Canadian corporations to practice behaviors parallel to CSR. In 2007, Prime Minister Harper was aware of Canada’s abundant investment into the resource/mineral extractive sector and encouraged the Canadian mining companies to meet Canada’s newly developed CSR standards and expectations. The method of developing and implementing CSR policies was achieved through government-company consultation and government stakeholder cooperation. The successful relationship between the CSR actors within Canada’s government and country, may advocate that cooperation amongst constituencies is the most imperative element to CSR regulation.The European Union has recently done extensive work to try and find the best form of regulation. Some critics argue that the creation of a CSR organization with a democratically appointed minister focused solely on monitoring and enforcing socially responsible behavior will be extremely effective.

Laws

In the 1800s,the government in the primary establishment of corporate legislation could take away a firm's license if it acted socially irresponsible. This was due to corporations being viewed as "creatures of the state under the law. The laws legally binding the corporation’s behavior and activity are quite insignificant in relation to the global consequences. Only recently have countries included CSR policies in government agendas legislature. Common types of countries who have implemented legislation and CSR laws generally consist of socio-economic and politically sophisticated countries. The level of political stability and effectiveness is inextricably linked to a countries capacity to ensure national CSR policies.

The increasing ability and influence corporations have on the economic, political, and social dynamics of society correlate to the recent studies by the UN Commission on Human Rights. More research and international political instruments are being explored to protect and prevent corporations from violating human rights.

Denmark has a law on CSR. On 16 December 2008, the Danish parliament adopted a bill making it mandatory for the 1100 largest Danish companies, investors and state-owned companies to include information on corporate social responsibility (CSR) in their annual financial reports. The reporting requirements became effective on 1 January 2009. The required information includes:

• information on the companies’ policies for CSR or socially responsible investments (SRI)
• information on how such policies are implemented in practice, and
• Information on what results have been obtained so far and management’s expectations for the future with regard to CSR/SRI.

CSR/SRI is still voluntary in Denmark, but if a company has no policy on this it must state its positioning on CSR in their annual financial report. More on the Danish law can be found at CSRgov.dk

Crises and their consequences

Often it takes a crisis to precipitate attention to CSR. One of the most active stands against environmental mismanagement is the CERES Principles that resulted after the Exxon Valdez incident in Alaska in 1989 (Grace and Cohen 2006). Other examples include the lead poisoning paint used by toy giant Mattel, which required a recall of millions of toys globally and caused the company to initiate new risk management and quality control processes. In another example, Magellan Metals in the West Australian town of Esperance was responsible for lead contamination killing thousands of birds in the area. The company had to cease business immediately and work with independent regulatory bodies to execute a cleanup.

Stakeholder priorities

Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors) and communities in the areas where the corporation operates its facilities, regulators, academics, and the media.

Branco and Rodrigues (2007) describe the stakeholder perspective of CSR as the inclusion of all groups or constituents (rather than just shareholders) in managerial decision making related to the organization’s portfolio of socially responsible activities. This normative model implies that the CSR collaborations are positively accepted when they are in the interests of stakeholders and may have no effect or be detrimental to the organization if they are not directly related to stakeholder interests. The stakeholder perspective suffers from a wheel and spoke network metaphor that does not acknowledge the complexity of network interactions that can occur in cross sector partnerships. It also relegates communication to a maintenance function, similar to the exchange perspective.