The Role of Social Responsibility in Strategic Planning

A major element of the strategic planning today is the need of corporate social responsibility (CSR) where a varied and increasing demand from stakeholders is faced by the managers. Several claims are considered as the base for the linkage of corporate social responsibility and the profits of the firm, particularly in the publication of professional conduct, in the media, and by the rising international CSR organizations – like the United Nations Global Compact. The motivation is creditable: if a positive CSR – the relationship of financial performance that can be demonstrated, and ultimately the firms will be provoked to increase their spending on the activities for CSR.

However, the academic research up till today is still questionable, in order to find the positive, negative and curvilinear relationships between the financial performance and CSR. However, the companies that incorporate social responsibility as one of their criteria are not leaving any stone unturned so as to ensure that they contribute to the fullest in the way of improving the society on one hand and minimizing any negative impact of their operations on the society on the other.

Hence, there are two core areas of the CSR:  Internal behavior, is a way of the corporation for conducting the day-to-day operations of its core business activities, and the External behaviors, that refers to the engagement of a corporation outside the interest of its direct business.  It moves beyond the good tactics of public relations or being nice to have.

The planning for internal behavior generally starts in the Human Resource Department.  It can be termed as an aid to recruitment and retention.  Examples are ‘going green,’ matching employee charitable contributions; creating ‘help the community’ programs, and sponsoring community events.

Whereas, the external behaviors may incorporate the latter three internal behaviors, they differ from the CSR of internal behavior because the management and public relations will consider the impact of financial decisions because of their stakeholders, such as owners and shareholders.  There may be several reasons behind the survival of the Business but ultimately it depends on profits.