CSR in a season of economic downturn

corporate social responsibility CSR on wikipedia

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an Analysis published on Business Day, by Bimbola Ashiru, Sept. 17, 2010.

Corporate Social Responsibility, CSR, may become one of the biggest victims of the raging economic downturn especially in our part of the world. In a clime like ours where CSR as an integral aspect of the corporate philosophy is yet to be fully understood, much less entrenched, CSR is likely to be badly affected by the hurricane of the economic recession in which we are still embroiled. 

CSR, by the way, is now more commonly regarded as the sum total of the approaches that are adopted by private sector organizations at integrating the economic, social and environmental imperatives of their activities. CSR has in many developed countries been increasingly integrated into corporate structures and processes and frequently involves the creation of collaborative and proactive solutions to social challenges.

In developing countries like ours, the lines between government responsibility and the citizen’s responsibility are increasingly blurred, putting increasing pressure on private corporations to deploy initiatives that ordinarily ought to fall squarely in the purview of government. In recent years, for instance, private sector companies in Nigeria have been involved in equipping public hospitals, constructing roads, providing wells and even power transformers and other such amenities. While this points to a failure of governance on one hand, it has however been a welcome relief to many communities across Nigeria. A handful of corporations have had a consistent and apparently very strategic disposition to CSR over the years. Clearly, in addition to the direct and indirect impact of these interventions on the communities, these corporates have also managed to enhance the profile of CSR in Nigeria and stimulate greater public awareness especially as to the imperative of CSR as it pertains to helping redress societal problems.

The current economic downturn, however, is tending to slow things down. As is typical of economic downturns many corporations are facing rather precarious financial pressures at the moment. The result is the instinctive recourse to survival mechanisms: safeguard cash, cut spending and minimize costs as much as possible. Consequently, “right sizings” have led to significant job losses across the economy, and “unproductive” branches and subsidiaries are being merged or closed down altogether. In some places, spending cuts have even affected age-old worker benefits which have either been drastically reduced or scrapped altogether … //

… Imbibing the CSR philosophy helps to streamline and optimize corporate returns on investment in the area of CSR. For instance, it helps to ensure that in the choice of corporate social investment initiatives, the corporation is deft and strategic, with a keen eye on value delivery. Doing so would imply for instance that corporate social investment initiatives are those about which the company’s key stakeholders including staff, shareholders and communities feel most passionate and yet for which the company can provide meaningful and competent interventions. (Here, there is a balance between good intention and competence). Experience has shown that CSR interventions about which staff feel a strong connection and passion ultimately deliver more to the bottomline than those to which they neither truly fully subscribe or indeed believe in. Many examples abound in the corporate world of initiatives that are handed down straight from the top to the bottom, with hardly a buy-in of staff.

Very importantly, corporates need to refocus their thinking towards value optimization even in the face of budgetary restrictions. How best can my organization deliver value to our communities now that our CSR budget has been cut by xxx percent? How best can we save on cost by eliminating waste in for instance, encouraging email recipients to think twice before printing a possibly needless email? In serving our communities, would the provision of proper training on the imperative of consistency in hand-washing before and after meals and after voiding, deliver on our long-term objectives better than providing a local dispensary?

These are the sort of debates that corporates ought to be having now. Reduced budgetary spending need not short-circuit the gains that have been made in gradually entrenching the CSR philosophy in Nigeria. Rather it should unearth such creativity among corporations that leads to geometric improvements in the impact derivable by communities, staff and other stakeholders, from CSR. (full text).

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