Corporate Social Responsibility emerges from the Public Relation field of Community Relations. Which used to be referred as CSR? Corporate Social Responsibility is concerned solely with how to create an enabling environment in the host community so that the company can carry out its activity without hindrance, but rather with the assistance and support of host inhabitants. Community Relations is a problem solving process and this involves strategic analysis of the problem, planning, taking action and evaluating programme effectiveness, inadequacies, or outright failures (Onabanjo 2005:44). According to Wikipedia, the free encyclopedia (2009), Corporate Social Responsibility also called Corporate Responsibility, Corporate Citizenship, Responsible Business, and Corporate Social Opportunity is a concept whereby organizations consider the interest of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and stakeholders as well as the environment.
This obligation is seen to extend beyond the statutory obligation to comply with legislation, and see organizations voluntary taking further steps to improve the quality of life for the local community (Community relations). In 1963, the free market philosopher Milton Friedman described CSR as fundamentally subversive, writing that Corporate Responsibility is the pursuit of individual interest in an unstrained market.The World Business Council for Sustainable Development (WBCSD defines CSR as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and the families as well as the social community and the world at large. (1989:9) classifies CSR into four categories. Enterprise: Supporting and developing initiatives to nurture budding entrepreneurs and boost enterprise, Education: Helping to bring new horizons into the lives of young people, Arts and Culture: Providing assistance to a range of artistic activities and bringing communities together, Environment: Encouraging efforts to safeguard the environment and improve the quality of life. Sietel (1987) as quoted by Onabajo (2005:38) provides what he calls a partial list of CSR categories to include being responsible for: Product Lines: Not producing dangerous products and mainting good product standard that are environmentally safe, Marketing Practices: Responding to consumer complaints, setting fair prices and maintain fair advertising contents, Employee service: Training counseling, granting allowance for the welfare of employees, Corporate Philanthropy: Contributing to community development activities and initiating social projects.
Environmental Activities: Embarking on pollution control projects, adhering to federal government standard and evaluating procedures of new packages; Employee safety and Health: Setting effective work environment policies, accidents safeguard food and medical facilities.The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in the multiple ways by operating with a perspective broader and longer than their own immediate, short term profits. Some critics. However, argue that CSR distracts from the fundamental economic role of business.
The idea of Corporate Social Responsibility has changed over the last decade – Gordon Brown, assumed that CSR goes far beyond the old philanthropy of the past – donating money to good causes at the end of the financial year and instead an all year round responsibility that accompanies accept for the environment in their local communities and for their recognition that brand names depend not only on quality, price and uniqueness but how, cumulatively, they interact with companies workforce, community and environment. Thus, multinationals are engaging in areas which used to be fully under government control with no major private sector input. This progress reflects current trends in global consumer’s priorities and the way how they perceive the corporation in a broader sense –not only the final products but also the image of the company and the activities going beyond the production itself.
The need of corporate responsible conduct towards socially sensitive areas has also been reflected in the development of written norms of company’s desired behavior. These codes of conduct enumerate essential guidelines of internationally acceptable behavior which is expected from multinational (e.g careful adherence to local law, respect for local custom, willingness to train local workers, support of local customs. Support of local social projects, ploughing back proportion of local profits, and engage in local R&D activities). Current codes of conduct can be general or specific depending on which body, corporation or international organization is issuing them. Naturally, these codes of conduct are not legally binding and adherence to them depends on the company’s will.
Nevertheless, the same applies to these codes of conduct as to the CSR, the difference is in the light in which the MNC is presented to final consumers as well as host country citizen and authorities.