Strategic Corporate Social Responsibility (SCSR), Challenges & Benefits

According to Chandler (2001) corporate social responsibility refers to transparent business practices that are based on the ethical values, compliance with legal requirements and respect for people, communities and the environment. In other words beyond making profits, companies are responsible for the whole impact they create on people and environment. Nowadays stakeholders expect that companies should be more environment friendly and socially responsible in conducting their business.

What is Triple Bottom Line ?

Figure 1-Corporate ethics and social responsibility

In traditional business accounting and common usage "bottom line" refers to profit or loss. Nowadays most of the companies adopted the TBL framework to evaluate the performance levels in a broader aspect to create a great business value. According to Elkinton (1998) triple bottom line consists of 3 stages and commonly known as 3P's

1. Profit - Refers to the economic value created by the organization after deducting the cost of all inputs.

2. People - Refers to fair business practices toward labors, community and region which conducts the business.

3. Planet -  Refers to sustainable environmental practices as environmental sustainability is the more profitable course for a business in the long run.


Strategic CSR & It's Activities  

It is about deciding to which extent the firm should be involved in social issues and creating a corporate social agenda considering current social issues.
According to Porter & Crammer (2006) through strategic CSR, organizations can create a huge social impact to gain a great business benefits. They further clarified that strategy is always about choice and  organizations which make the right choice, build focus and social interactions can increasingly separate them from the rest of the organizations.

According Mcwilliams et al (2006) CSR activities can include social characteristics into products and manufacturing process, addressing higher levels of environmental issues through recycling and minimizing pollution and advancing the goals of community. 

For example, Google Green is a corporate effort to use resources efficiently and support renewable power. But recycling and turning off the lights does more for Google than lower costs. 

Benefits of CSR

CIPD (2013) stated that, through CSR activities organizations can build its credibility, positioned higher in the market, protect the reputation and ultimately securing the company's license to operate the business. Therefor most of the companies are adopted to TBL framework while they are more concerned about CSR activities.


References 

Chandler, G. (2001). Defining Corporate Social Responsibility, Ethical Performance Best Practice.

CIPD (2003). Corporate Social Responsibility and HR’s Role, London

Elkinton, J. (1998). Cannibals with forks : The Triple Bottom Line of 21st Century Business

Mcwilliams, A., Siegal, D. and Wright, P. (2006). Corporate Social Responsibility : Strategic
Implications

Porter, M. & Kramer, M. (2006). Strategy and society: The link between competitive advantage
and corporate social responsibility, Harvard Business Review, pp 78

Benefits and Compensation : Issues And Challenges

Companies provide a variety of compensation and benefits to employees for performing their jobs as success or failure of these companies are largely depends on the performance of their employees.

The Society for Human Resource Management (2012) has defined compensation as a systematic approach to provide a financial value in exchange of work performed by the employees. Financially, salaries must be competitive and fair according to employees' contribution.

Compensation & Job Satisfaction

Armstrong (2006) defined "job satisfaction" as positive and favorable attitudes people have towards the job and it is commonly believed that job satisfaction and morale are affected by compensation. Therefor compensation is a primary motivation factor for any kind of employee.

Janelle Gale, VP of HR at Facebook stated that compensation fairness is a important factor & they are spending quite a lot of time on deciding them to keep employees happy & motivated.

Figure 1-How Facebook Decides an Employee's Salary

According to MBAskool magazine(2011) there are 4 components of compensation and benefits.

1. Fixed Pay - This is clearly stated in the employment contract and it is considered as basic salary or wage paid to the employee irrespective of any other factor.

2. Variable Pay - It is an additional compensation paid to the employee based on the performance levels of the employee & employer.

3. Equity Pay - Employees are awarded shares of the company at a discounted prices and they can make money out of them with the appreciation of  stock prices.

4. Other Benefits - Benefits such as medical facilities, insurance facilities, company owned car or flat are included to other benefits category.

As per Mulligan & Finkelstein, (2007) employee pay levels may vary across national borders due to the market and industry factors,  traditional practices and values included in the concept of salary. Nevertheless, compensation and benefits are regularly among the top three factors, affecting employee job satisfaction across the world. Therefore,it is commonly believed that offering a competitive salary and benefits or reducing the gap between employees' salary expectations will immensely help to upkeep the valuable human resource and attract more diverse people to the organization.

References

Armstrong, M.(2006). A Handbook of Human Resource Management Practice, London: Kogan Page

Society for Human Resource Management (2012). Employee Job Satisfaction and Engagement. Available at :
www.shrmstore.shrm.org.

MBASkool (2011).Human Resources Terms. Available at :
https://www.mbaskool.com/ (Accessed on 01st July 2018 at 4.30pm)

Mulligan, I. & Finkelstein, D. (2007). Innovations in International HR. Available at :
https://cdn.ymaws.com/www.shrmmorrisnj.org/resource/resmgr/imported/globalcomp[1].pdf