Overview:
The following essay is aimed at the critical reflection on the various approaches that can be followed by organizations for implementing CSR through opting for various CSR standards. The critical reflection comprised of an illustration of the necessity for CSR to ensure sustainable development of an organization followed by the common standards accepted for CSR strategy formulations such as ISO standards.
The essay also focused on the scope for integrating Voluntary Sustainability Standards (VSS) in the organization’s CSR framework. The final sections of the essay were focused on outlining the advantages and disadvantages of the CSR standards in order to find out the feasibility of applying CSR standards in contemporary business practice (Christensen et al., 2007).
Introduction:
The prominence of corporate social responsibility has increased substantially over the course of the recent decade and is necessary for promoting business accountability among stakeholders other than investors and shareholders. The specific areas of concern that are identified in the case of CSR initiatives include references to environmental safeguarding, improved wellbeing of employees, civil society, and the surrounding community in the existing scenarios as well as for the long-term sustainability (Allresearchjournal.com, 2018).
Some of the critical factors that can be considered responsible for driving businesses to adopt CSR practices refer to the improved customer interest, competitive labor markets, increasing investor pressure, supplier relations, reducing the involvement of government in social and environmental objectives as well as demands for higher transparency and disclosure (Blowfield & Murray, 2014).
An organization could leverage the features of a CSR framework to obtain credible benefits such as higher productivity, improved access to capital, limited operating costs, enhanced financial performance, increased sales and customer loyalty as well as product safety and reduced liabilities. However, the preparation of an effective CSR strategy would have to be aligned with the relevant standards that would imply the formation of appropriate precedents for executing CSR activities (Morhardt, 2010). The following essay presents a critical evaluation of the advantages and disadvantages of adopting the CSR standards for establishing the organization’s reputation as a responsible business.
CSR and need for standards:
The reputation of an organization as a social actor leads to the requirements of addressing the objectives of external and internal human communities. As per Canada Business Network (2018), the organization has to identify and respond effectively to the expectations, demands, rights and needs of the communities for improving the wellbeing of the communities (Canada Business Network, 2018). The primary elements of a CSR agenda which are responsible for various issues identified in the domain of human rights, labour rights and practices and significant social issues.
The labor rights and practices are profoundly reflective of the various core labour standards and basic working conditions according to the ILO conventions and recommendations as well as the ILO Tripartite Declaration related to Multinational Enterprises and Social Policy. According to Davies & Crane (2010), some of the insights into the core labour rights could be identified in the form of rights for collective bargaining, promise of acceptable working conditions, abolishing child labour, freedom of association and the limitations on compulsory or forced labour. Corporate social standards are also guided by the international human rights standards in the context of specific jurisdictions in which the organization operates (Davies & Crane, 2010).
The regulations of the UN Global Compact imply that business organizations should support the international human rights within their jurisdiction of influence. As per Giovannucci, von Hagen & Wozniak (2014), the operational activities of business organizations have a considerably detrimental impact on the natural resources in vicinity of the organizational processes extending towards the ecosystems, water, air, and land. Therefore, the international guidelines that dictate standards for CSR of business enterprises are directed towards the objective of environmental protection (Giovannucci, von Hagen & Wozniak, 2014).
The examples of the three mandatory responsibilities highlighted in the ten principles cited in the UN Global Compact could be presented as evidence for validating the influence of CSR standards on the capabilities of organizations to accomplish the reputation of a responsible enterprise. The principles suggest the adoption of preventive measures to address environmental challenges, promoting the development and integration of environment-friendly technology, and the execution of initiatives for promoting superior standards of environmental responsibilities (Salzmann, Ionescu-Somers & Steger, 2005). Hence it can be perceived that the majority of international normative standards for CSR are reflective of social, environmental, and economic issues. The adoption of standards is influenced by the factors such as measures for addressing bribery, ensuring product quality, industrial relations, human rights, labour rights, safeguarding customer interests, responsibilities in context of the marketplace and environmental protection (Iosrjournals.org, 2018).
Standards and trends:
The reflection on the advantages and disadvantages of adopting CSR standards could be supported with the review of the scope of CSR from the perspective of ISO standards. The promotion of CSR has been largely attributed to the massive difference between the scope, power and inventiveness of private sector and public sector institutions (Schaltegger, Lüdeke-Freund & Hansen, 2012).
The benefits for multinational corporations have increased substantially over the course of the last two decades with promising improvements noted in the field of bilateral deal pacts, domestic liberalization, and multiparty trade agreements (Iisd.org, 2018). The expansion in the scope of global rights as well as the improving reach of private sector institutions has resulted in the revision of concepts regarding the social expectations from the roles of business corporations. However, the impact of various imbalances within the scope of CSR is considered as a major setback for the sustainability of firms in the global business environment.
The first aspect to be considered in this case refers to the imbalance in the system for establishing global precedents with the increasing sternness and restrictions being observed explicitly in the regulations supporting global market expansion. The dilemma pertaining to the sustainability of existing CSR standards is also associated with the actual impact of the strategies in practice (Crane & Matten, 2016).
As per Kim, Li & Li (2014), the multinational corporate sector is capable of a global reach and potential alongside promising competencies for developing and executing decisions (Kim, Li & Li, 2014). Therefore, various other social actors are able to identify opportunities to leverage the corporate sector for accomplishing broader social objectives referring to the resolution of governance gaps and compensation for government insufficiencies. Hence, the adoption of CSR standards has to be based on the identification of dynamics that exist between the society and business, the relative efficiency of voluntary and regulatory approaches for addressing social needs and the mandatory rights and obligations of various social agents and domains (Luo & Bhattacharya, 2006).
ISO standards for CSR:
The first initiative taken by ISO for establishing CSR standards was observed in 2002 when the ISO Consumer Policy Committee (COPOLCO) presented a report for identifying opportunities to frame standards of corporate social responsibility. The formation of a Strategic Advisory Group (SAG) in 2004 by the Technical Management Board of ISO was aimed at reviewing the possibilities for developing standards for CSR and the potential for determining the scope and nature of the standard (Sitnikov & Bocean, 2012). The release of the final draft of ISO 26000 on September 12, 2010 laid the foundation for ISO corporate social responsibility standards.
The ISO 26000 standard is considered as a coordinated source of guidance for best practices in global social responsibility that could assist public as well as private sector organizations distinctly according to the nature of international agreements among the representatives of major stakeholder groups (Bansal & DesJardine, 2014). The future direction of the standard is associated with four vital dimensions referring to the requirements for obtaining feedback in order to address the objectives of review and adaptation, conversion of guidance into empirical tools, the inclusion of all stakeholders in the development of a broader CSR framework and implementation of the guidelines in the national context (SECO, 2018).
The effectiveness of ISO 26000 can be observed explicitly in the two basic characteristics such as limited guidelines regarding employee’s resources and compensation guidelines as well as voluntary features ensure that the standard is aptly suited to the interests of corporate institutions. Corporate organizations could select the favourable entities from the standard and exclude the guidelines which are deemed inappropriate by them that validate the effect of ISO 26000 as an appropriate tool for corporate interests alongside promoting the realization of social responsibilities (Schaltegger & Wagner, 2017).
ISO 9001 is directed towards the provision of a framework that can execute the objectives of a quality management system focused on customers thereby leading to improvement in the performance of the enterprise. The standard is accepted widely as the benchmark for addressing quality requirements and customer satisfaction implications in context of supplier-consumer relationships.
The increasing preferences for ISO 9001 certifications are based on the capabilities for resolution of significant issues arising from the operations of an enterprise (Giovannucci, von Hagen & Wozniak, 2014). The factors of compounding economic growth and the improved awareness pertaining to the superior quality of supply chain components have also exerted potential influence on the popularity of ISO 9001.
The sustainability risk issues that can be addressed through the guidelines of ISO 9001 would indicate towards the feasibility of the standard as a viable choice for organizations to integrate in their CSR frameworks (Kang et al., 2015). The issues include addressing customer needs, monitoring and measurement of processes, process and product planning, acquisitions, customer satisfaction and communication that can be realized through ISO 9001 thereby implying contribution of corporate social responsibility (Canada Business Network, 2018).
ISO 14001 is considered as one of the first international standards to venture towards common environmental management practices. This standard proves to be effective in addressing the concerns of stakeholders emerging from the necessity of environmental management in order to address the requirements of sustainable growth and development. The requirements for addressing environmental management could be derived from the interplay between proactive management of environmental management practices, corporate governance, organizational risk management, and performance (Blowfield & Murray, 2014).
The ISO 14000 standards are designed for providing equally supportive implications alongside providing options for using them separately for addressing alternative environmental objectives. The ISO 14000 family of standards is recognized for the wide assortment of management tools for enterprises that can assist in the management of environmental features and assessment of environmental performance (Giovannucci, von Hagen & Wozniak, 2014).
From a generic perspective, these aspects identified in the ISO 14000 standard for CSR management would provide significant tangible benefits in the context of resource and raw material utilization and the depreciation in consumption of energy and waste generated. Therefore, the role of ISO is presenting standards for CSR which could be adopted by organizations can be identified in the form of increasing adoption of the ISO 9000 and ISO 14000 family of standards for designing CSR strategies of contemporary organizations. Therefore, the favourability of ISO 26000 could be ascertained effectively in its brand name and the adoption rate of the standard.
Voluntary guidelines:
The role of business institutions in the promotion of social wellbeing and the betterment of life in the nearby communities and social contexts of their operations has been an explicit highlight of the majority of business research studies. Voluntary national guidelines can also be considered as another significant element in the framework for developing CSR standards which address the insufficiencies noted in the case of practical implementation of CSR on an operational level and the management of CSR for obtaining the desired objectives at the ground level (Canada Business Network, 2018).
The definition of voluntary sustainability standards indicates the independently formed standards by the public for addressing the general criteria of economic guidelines, environmental and social regulations and mandatory requirements for compliance. Voluntary sustainability standard audits are characterized with transparency and the authority of enforcement mechanisms is vested generally in third-party. The reasons for which voluntary sustainability standards could be introduced as promising elements of the CSR framework of an organization include references to the necessity of a consumer environment, business environment, regulatory environment, and communication developments (Quarshie, Salmi & Leuschner, 2016).
The business environment could be associated with higher competitiveness alongside higher concentration which would imply the use of novel methods for differentiation, sophistication in supply chain management, and agility of the reputation risk management principles of the organization. The consumer environment could be addressed effectively by VSS through a profound emphasis on health and socio-environmental concerns in the area of operation of the enterprise. The rationale of organizations for preferring VSS as appropriate CSR standards could also be highlighted in the form of opportunities for social communication improvements that increase the exposure of corporations and associated individuals to higher levels of scrutiny (Iisd.org, 2018).
The social communication improvements could be primarily noted in the contexts of labor violations, responsibilities pertaining to food safety and environmental consequences. The preferences for VSS could also be validated on the grounds of institutions of a novel regulatory environment that is characterized by novel regulations directed towards improved safety requirements alongside coping with the contemporary trends in the fast-paced global trade. The reflection on the advantages and disadvantages of adopting CSR standards in order to project an enterprise as a socially responsible entity would provide a clear impression of the prolific avenues for practical application of the standards to accomplish desired objectives. It is essential to focus on the scope and nature of the individual standards highlighted in the essay as well as their contribution to the improvement of a CSR framework for business organizations in national as well as international jurisdiction.
Advantages of standards:
The primary benefit that could be derived from the adoption of CSR standards in a strategic framework for a business is the provision of a clear outline of the strategy that must be followed for executing socially responsible activities. The standards can provide appropriate alignment with prevalent regulations in a specific business environment regarding the aspects of bribery, corruption and labor (Luo & Bhattacharya, 2006). This factor ensures that the components of CSR strategy derived by an organization are compliant with the national and international legal precedents.
The employees could be able to understand the scope of limitations and privileges available to them in the context of CSR activities that contribute to the effectiveness of outcomes derived from the strategic approach of the organization towards social responsibility (Giovannucci, von Hagen & Wozniak, 2014). The common impact of forming regulations and standards for CSR also ensures that the business is able to coordinate distinct organizational aspects such as human resources, reputation, accessibility, and branding with the legislative dimension.
CSR standards also enable the provision of opportunities for organizations to address critical situations such as downsizing where the standard guidelines would help the organization to address the balance between the organization and its existing employees. The implementation of the CSR standards is also reflective of a sophisticated business framework that cannot be subject to competition from companies with limited scope for power and business potential which are liable to struggle with the lower echelons of CSR standards (Schaltegger & Wagner, 2017). The CSR standard of ISO 14000 family set of standards is directed towards addressing environmental concerns solely which can be considered as a source for dedicated environmental protection guidelines for CSR activities of an organization.
The three key aspects of the standard imply sustainable development of organizations without detrimental consequences for the nearby communities and the environment. Therefore, organizations could be able to reach out effectively to the wider communities through stewardship initiatives that are contemporary examples of CSR initiatives undertaken by organizations (Canada Business Network, 2018). The standards of CSR are also reflective of mandatory implications for safeguarding the interests of the organization itself through references to the flexibility for organizations to select the preferred guidelines according to the ISO 26000 standard which is accepted as the general international guideline from ISO for CSR. The example of excluding the aspects referring to the compensation for employees and means for them can be considered as a privilege for organizations that can be derived from CSR standards.
The impact of the ISO 9001 standard for CSR could be considered effective for resolution of a commonly accepted framework that would comprise of influence on the long term strategy, business plans, and policy and management values of the organization. The capabilities of CSR standards to present benchmarks for sustainable performance could also provide flexibility of monitoring the effectiveness of the organization in implementing the CSR strategy. The standards would also ensure that the external stakeholders are assured about the quality of information regarding the organizational value as well as the intangible pitfalls and assets. Another promising advantage that can be derived in the context of CSR standards reflects on the induction of voluntary sustainability standards (Allresearchjournal.com, 2018).
The VSS are responsible for inducing transparency which is considered as one of the core characteristics of CSR initiatives since the VSS are liable to scrutinize firms on the basis of certain social responsibility criteria and communicate the information in public. The VSS ensures that the organization adheres to its social responsibility obligations without any fail in order to prevent loss of brand reputation. Amongst all the advantages the use of standards in CSR enables the limitations over possibilities of personal judgments regarding CSR within an organization. The CSR standards help in creating a profound demarcation between the domain of social responsibility and sustainability thereby implying precision of objectives and relevance to the existing contextual scenarios.
Disadvantages:
The adoption of CSR standards should also be preceded by a critical reflection on their disadvantages which would facilitate an impression of the contingency measures that must be put in place to ensure that the CSR strategy is able to accomplish the objectives of the organization in external as well as internal contexts. First of all, the precedents established in CSR standards could alter the organizational structure and require additional reforms in terms of bureaucracy exercise thereby leading to additional costs (Giovannucci, von Hagen & Wozniak, 2014). The standardization of CSR guidelines leaves limited scope for introduction of innovative approaches in sustainability and risk management that could have proved substantially successful in CSR initiatives. The objective of adaptation and improvising over the existing standards is limited which leads to the profound setbacks of the CSR standards and their capabilities for promoting an organization as a socially responsible entity.
The contribution of CSR standards to the benefits of companies can also be considered as another setback since majority of CSR initiatives of organizations are directed towards monetary benefits and the use of specific legislation would only emphasize over the concerns of the enterprise rather than reflecting on social, environmental and community needs. The diversity of geographical, social, cultural and political factors also has a considerable impact on the adoption of CSR standards which has not been reviewed aptly in research albeit presenting the indications for increasing preferences for certification with every year (Luo & Bhattacharya, 2006).
Ethical treatment of stakeholders could be marginalized according to CSR standards which focus for a major part on addressing the sustainability risks for the organization that could imply the leveraging of interests of particular stakeholders to accomplish long-term profitability and growth. These aspects of CSR standards create notable pitfalls for perceiving them as a productive element for addressing the concerns of sustainable development of business enterprises in international as well as international jurisdictions. The limitations of CSR standards could also be identified in the restrictions over national guidance as found in the case of ISO 26000.
Conclusion:
The essay presented a critical review of the different acceptable standards for CSR framework of an organization alongside an illustration of ISO standards and voluntary sustainability standards. The discussion on the advantages and disadvantages of the CSR standards could be accounted as a crucial highlight of the essay that enabled a reflection into the possibilities for utilizing CSR standards to establish a responsible business organization.
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