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Richard Branson: Why Is Corporate Social Responsibility A True Business Challenge..?

Richard Branson offers valuable advice on corporate social responsibility, during this period of difficult economic times. It is clear that businesses do not only sell services or goods but also can have a serious social role inside society by taking special initiatives and developing a strong social character:

Richard Branson

Richard Branson on Taking a Stand for What’s Right | Entrepreneur …

When I was 16, I dropped out of school to start up a small magazine called Student. It was the height of the turbulent 1960s, and my friends and I wanted to give our generation a stronger voice. We didn’t stop there. Following the magazine’s success, we started a student advisory center where young people could get guidance on issues ranging from birth control to mental health. Looking back, it’s clear I’ve always felt that business — small or large – has the opportunity and the responsibility to do good in a community. Abuses are common, both by corporations and in the public sphere. So many readers of this column send me questions about how to deal with corruption and demands for kickbacks as they try to launch small businesses in countries where such practices happen all the time. Over more than four decades of doing business around the world, I have seen what happens when companies and corrupt officials conspire to serve their own selfish interests: They wreak havoc on our planet and its fragile ecosystems, destroy communities and perpetuate the cycle of poverty. As a result, many people distrust business and public institutions. And why wouldn’t they? Such practices aren’t only morally wrong, they are bad for business. Business should be a champion of good governance, taking a strong stand against corruption and lobbying for a better world. We should be fighting to build and support strong and healthy communities because the people who live in them are ouremployees and our customers, our suppliers and investors; a business and the community it serves are interdependent. These days, Virgin is a lot bigger — we have launched more than 400 businesses over the years — and we have learned quite a bit about the ways that big businesses can make a difference. One is through sheer scale. Many large corporations control vast supply chains that involve thousands of smaller businesses operating in dozens of countries. Choices made by the management team at the top of the chain — anything from using more sustainable raw materials to improving gender diversity — trickle down through the entire system, and can often bring about change faster than governments can. An example that I learned from was Wal-Mart’s decision a few years back to source and sell more energy-saving compact fluorescent light bulbs. Their suppliers weren’t happy, of course, but they went along with it and started shifting production within months. By comparison, it took European legislators years to reach consensus on phasing out inefficient bulbs. Effective environmental regulations are necessary, for sure, but big business can lead the way.

But what is the definition of Corporate Social Responsibility..?

Corporate Social Responsibility Definition | Investopedia

There is an impressive history associated with the evolution of the concept and definition of corporate social responsibility (CSR). In this article, the author traces the evolution of the CSR construct beginning in the 1950s, which marks the modern era of CSR. Definitions expanded during the 1960s and proliferated during the 1970s. In the 1980s, there were fewer new definitions, more empirical research, and alternative themes began to mature. These alternative themes included corporate social performance (CSP), stakeholder theory, and business ethics theory. In the 1990s, CSR continues to serve as a core construct but yields to or is transformed into alternative thematic frameworks.

More importantly, we can consider corporate social responsibility as a new and innovative business model:

Corporate social responsibility – Wikipedia, the free encyclopedia

Corporate social responsibility (CSR, also called corporate consciencecorporate citizenshipsocial performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-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. The term “corporate social responsibility” became popular in the 1960s and has remained a term used indiscriminately by many to cover legal and moral responsibility more narrowly construed. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. McWilliams and Siegel’s article (2000) published in Strategic Management Journal, cited by over 1000 academics, compared existing econometric studies of the relationship between social and financial performance. They concluded that the contradictory results of previous studies reporting positive, negative, and neutral financial impact, were due to flawed empirical analysis. McWilliams and Siegel demonstrated that when the model is properly specified; that is, when you control for investment inResearch and Development, an important determinant of financial performance, CSR has a neutral impact on financial outcomes.

Finally, businesses today have no other alternative but to take serious social responsibility initiative. Richard Branson is here…


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