“As long as any business depends on its customers, their concerns, at whatever level, should also be the concerns of the business.” This quote from Forbes magazine succinctly describes the philosophy behind corporate social responsibility, or CSR. Proponents of CSR laud its capacity to combine success in business with sustainable practices. Yet despite these positive associations, CSR is often criticized as being little more than a publicity stunt and a far cry from the fundamental profit-seeking role of business.
When practiced with integrity, CSR can go above and beyond blatant attempts to gain favorable press or to meet minimum statutory obligations. Companies can better their public image while also helping their customers, employees, communities, and the environment.
Vodafone, the world leader in mobile telecommunications, is one company which has excelled in its CSR practices. In 2006, the company was ranked first on the Fortune 500 list of the world’s largest companies according to six criteria which measure socially responsible business practice (source: www.money.cnn.com). Vodafone fosters positive relationships with the communities it serves by proactively addressing concerns and implementing standardized practices amongst its operating companies.
Vodafone has also worked to make its products more accessible by introducing low cost, easy-to-use phones. Additionally, their supply chain management ethics serve to eliminate both forced and child labor and discriminatory practices as well as to provide good wages and hours for employees at every level of the supply chain.
Finally, a phone-recycling program was implemented by the company to re-use old phones or break them down into component parts to be recycled. All proceeds from this campaign are donated to the YMCA.
These practices enhance the company’s image and directly contribute to positive public relations, but many Vodafone investors questioned how a doctrine of social responsibility would impact short-term profits. The company has addressed these concerns by introducing a “One Strategy” business model in which CSR and business objectives are aligned toward a common goal. By increasing access to phones for the world’s poor, for example, the company is granted access to developing markets.
The overarching goal of increasing a company’s profile and profits can only be achieved by delivering a consistent, positive customer and community experience. Fostering these kinds of relationships requires socially responsible behaviors. In this way, business objectives and CSR can act as mutually dependent concepts.
What do you think about incorporating CSR into a business model? Do you have any examples of companies who have excelled in this area? We’d love to hear your thoughts.
