Corporate Social Responsibility (CSR) - Global and Bangladeshi Perspectives by Ziaur Rahman

Introduction
The dynamics of business has crossed its boundaries set decades back and have introduced strong motifs of societal well-beings in dispensing business and fiduciary duties. Today's globally Trans National Corporations (TNC) are turning increasingly sensitive to the needs and aspirations of society at large not perhaps for the love of society but for selfish self-sustainability. The business of business is longer driven by the myopic vision of satisfying its owners, the shareholders or its own employees. Therefore, the premise of the existence of corporations is to make profits only has had a fundamental and philosophical shift. Much academic and practical corporate interest has spawned over the last decade, especially during the fierce battles over putting the environment above the greed of uncontrolled productivity and industrial growth. With spurious and unrelenting growth in world trade and commerce the need for industrialization had been the natural logical consequence, however at the cost of destroying global ecology. Globalization, having all its merits and advantages, had to wrestle with rising currents of societal and political unrests by bringing forth a novel idea of integrating society and business under one equation called Corporate Social Responsibility (CSR). The wind of globalization has also touched Bangladesh and CSR is being interwoven into the psyche of local businesses. However, the change process is slow and only in its infancy due to not having the proper acceptance at the senior professional ranks or the board. CSR and organizational sustainability have crossed intellectual boundaries of reason and now are firmly in place, affirming the concept that global corporations need to change their skins on how businesses must be run for continuing to keep clients happy and building future client relations.

CSR and its evolution

Many definitions abound on CSR. The definition of Corporate Social Responsibility (CSR) by the World Business Council for Sustainable Development offers an acceptable definition. They state that "corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (CSR: Meeting Changing Expectations, 1999, Page 6)." Others have defined CSR as being the integration of business values and strategies with values, where interests of all stakeholders ( people or entity directly or indirectly connected to the business itself) are reflected in companies policies and actions. Philanthropic `community development goals' and business objectives were for many years seen as separate goals, however, satisfying similar objectives.

Additionally, the society, especially the reaches of businesses have expanded astronomically with the evolution of technology, ICT, global travels and diversity of human interactions, etc. With such global reach and global power comes global responsibility. This statement speaks of social equity, which aids to improving perception and understanding of corporations which used to be profit- maximizing entities. Today, thanks to human paradigm shifts, corporations are welcoming CSR for building a better and sustainable tomorrow.

CSR, globalization and the changed environment

Reviewing the world specter, at present, fifty two (52) of the largest economies (www.ssireview.org/articles/entry/invention_for_the_common_good) in the world are corporations; with this financial strength, power, reach and presence comes into play. Corporations are having significant impacts having multi-actor, multi-disciplinary, and international hegemonic control and have had also contributed to unsettling governments or robbing investor money completely due to lack of accountability stemming mainly from not having the controls and government scrutiny in place. Increasingly, the corporations began to be under the media scrutiny and lost credibility, clients and revenues. Some companies had even folded (Enron) or took severe economic batterering (TYCO). The urgency brought significant changes in operational proceduces, government mandated rules and regulations and introduced healthier corporate governance. CSR was also added in the equation to show and implement responsible programs that would benefit in promoting positive social face of the corporations to the media and their stakeholders. Regardless of how CSR had arrived in to the world stage, it is becoming an integral part of organizations; more and more companies are integrating CSR into their corporate vision and mission statements and strategies. From a purely business point of view, successful CSR is interlinked with corporate branding and implies a shared set of statements about the company's values towards its external and internal stakeholders. The general public looking at a company that claims to be a CSR friendly organization and has CSR relevant programs on ground will surely evoke public trust and confidence, resulting in registering higher sales of company products and services. Globalization has necessitated academic enquiry into CSR introducing the triple bottom line (TBL) principle which calls for integration of the environmental, social and economic responsibilities in order to maintain a sustainable growth and development of a modern corporation in the globalization era. Interestinglyy, major global investment funds also dictate how investments are channeled to purchase MNC shares based on how responsible a corporation has been. Therefore, CSR is the way forward for Bangladeshis companies that intends to stake out international markets. Global Compact a UN supported association is trying the build a platform of corporate citizenship which addresses aspects of human endeavor, human rights, environmental protection, and non corrupt business practices.

CSR and Bangladesh

A study of CSR in Bangladesh provides a bird's eye view of how CSR engagements are being structured and whether CSR initiatives are home grown within companies or being partnered with other specialized entities, private consulting companies, NGOs, research organizations or the government. While exploring the market conditions of corporations from various sectors in the field of corporate responsibility, the possibility of partnership brokering and partnerships in place were also explored among the corporations in Bangladesh. Partnerships are a way forward for increasingly complex global interactions and for taking ideas forward and being implemented as a methodology in the Western world. Fourteen companies from various sectors were directly approached and questions on Community relations, Strategic Partnership Perspectives, Stakeholder engagement, etc were asked. For the purpose confidentiality the names of the visited companies are not given in this article. The August 2007 issue of the The Executive Times also provided solid secondary information on CSR activities performed by some companies (16) that was published on corporate outlook of corporate heads or concerned departmental heads. The primary and secondary information were indicative that some companies equated CSR with Corporate Giving or Philanthropy. These entities were not considering at sustaining an enterprise by giving responsibly; they were focusing on giving to the community without thinking ahead of sustaining the community efforts. This was the fundamental shift in reasoning between the local professionals and testimonials read at corporate websites and literature of global corporations overseas. On the Bangladeshi part, the concept of CSR was not particularly framed in the context of seeing to it that the money being given as corporate donations had been part of strategic road map of the organization. CSR was done by certain companies in Bangladesh with a particular cause in mind and its interaction with the brand of that company (an example of cause related branding). Additionally, the executives of these organizations purported to make themselves believe that they are responsible corporate citizens for their contribution to the welfare of society without truly understanding the percentage of their contribution to the welfare of society. Only a handful of these companies were truly engaged in CSR and partnerships for sustainability. At KDS accessories, they had noted of taking a comprehensive plan to design their CSR initiative in the coming year. At the same token, Brac Bank and Marico Bangladesh Ltd. seemed to show tokenism in their CSR activities. The comments made by these companies point to the fact that they are either not aware of CSR or that CSR is a concept not akin to them or they lightly subscribe to the overarching goals of CSR and its social ramifications. Some companies like Rahimafrooz talked about working with Bangladesh Enterprise Institute (BEI) to sponsor some costs of their CSR center. Through this project Rahimafrooz has attempted to sustain the benefits of CSR. Similarly, Prime Bank and South East Bank discussed of being active in corporate philanthropy and had contributed to activities that are part and parcel of CSR. Chevron had also practiced the idea of sustaining CSR by funding the expansion project of Bibiyana Clinic and had setup two Smiling Sun Clinics, ensuring that the clinic's sustainability. Similarly DHL Express, Bangladesh was working to

support UCEP, which is a large NGO in Bangladesh working for the welfare of children. Expeditors had programs of corporate giving and they also work through the Rotary Club for various awareness programs. The companies that had no information volunteered on CSR were Asian Paints, BASF, Commercial Bank, Pran-RFL Group, Getco, TNT Express-Bangladesh in this published report in The Executive Times. The information on CSR and partnership assessment in place in Bangladesh were collected.from secondary source. The following companies were reviewed: 1 Asian Paints 9 Rahimafrooz 2 BASF 10 GETCO Trading Ltd. 3 Prime Bank 11 Cairn 4 Commercial Bank 12 Chevron 5 Brac Bank 13 DHL Express, Bangladesh 6 South East Bank 14 Expeditors 7 KDS Accessories 15 TNT Express- Bangladesh 8 PRAN-RFL Group 16 Marico Bangladesh Ltd.

Comments and Reflections on CSR

A bank executive suggested that CSR has been taken one step up at our organization. We call it sustainability and each bank account holder is also being judged whether he/she is socially responsible to conduct business with this bank or not. Starting in 2008, the company policy is to have a sustainability fund of 0.75% of net profits to show their commitment to sustaining a CSR initiative. Being in the health business, we are already doing CSR. We do a lot CSR we donate a lot. This statement shows misperception of some corporate executives. We welcome outsourcing and we look at some CSR as outsourced engagement. We do not encourage local vendors to submit CSR programs unless we really are interested to explore CSR engagement, especially since we follow global mandates. Effective relationship with stakeholders creates many opportunities for the company such as: the partners give innovative idea for business growth and employment opportunity increases Starting next year, we are building CSR strategy into our corporate plan Most companies had some form of partnerships; however, the true form of partnerships that we theoretically have come to know virtually did not exist. Corporations had spent money on community projects, the endowment of scholarships, health care, support for victims of different kinds and the establishment of Foundations. They have also often encouraged their employees to volunteer in community work thereby creating goodwill in the community which have directly enhanced their organizational reputation. However, most organizations visited had not articulated their philantrophic activities as CSR engagements. Only a handful of organizations have termed their efforts as CSR initiatives while others have promoted as charitable donations or community giving. CSR was called sustainability, community giving, philanthropy, corporate giving, corporate citizenship, etc.

The larger organizations, especially the banks have their own departments that deal with various community related affairs, which comes under public relations and/or administration. Some banks and other organizations have set-up their own Foundation to support the cause of the needy of Bangladesh. Under these Foundations, these organizations have been supporting various community development initiatives; these foundations have their own staff and manage their activities without much external help. CSR partnership outsourcing, although a novel idea, were taken positively by these organizations who showed interest in exploring the concept. The challenges most companies faced were around finding the righting vendor/partner/outsourcing agents. As a result, the companies have become hesitant or reluctant to new entry for a company that has not been tested in the market. While visiting some of the websites of major corporates, I found no mention of CSR driven initiatives ( Monno Ceramic); however, this company runs or had funded a school in its name and a mosque, but there was no visible comments in their websites. This point proves anew that CSR is a new concept that the corporations are slowly incorporating into their strategy and cause related branding initiatives.

Facilitating CSR practices in Bangladesh

CSR has strong societal ramifications in Bangladesh where at least forty percent of the people live in poverty. In order for CSR to gain momentum in Bangladesh, some of the following ideas may be incorporated. 1. CSR, corporate giving, philanthropy, community giving, etc. must be clearly defined and invite corporations to build more innovative CSR practice within their organizations.

2. CSR has strategic and financial value have to be properly communicated by

value-mapping the benefits of CSR. The economic impact of CSR has to be clearly defined with solid case studies. 3. CSR education has to be ongoing to keep aware corporate Bangladesh. 4. A strategic interplay between CSR and publicity is apprarent and in circulation globally, but turning CSR into strategic advantage is not noticed ( apart from a few companies) in Bangladesh. Companies may design their CSR partnership opportunities keeping these views in place. 5. CSR case studies may be developed by companies for wider dissemination. A set of case studies may be commissioned on CSR to champion the initiative of building CSR mindset among the corporates. 6. CSR has a tertiary level focus in Bangladesh and, therefore, more advocacy campaigns may be rolled-out citing real stories of CSR impacting the bottomline profitability of a company, globally or locally.

7. Corporations may retain CSR/partnership learning aide as they had nebulous idea of how CSR practices can offer value to both society and the organization. 8. Build CSR practices in the SME sector.

9. Corporations need to actively develop CSR departments so as to support CSR

partnerships. Some pressure may be accorded by the government, NGOs, trade bodies, trade facilitative organizations and research bodies to bring in some fundamental changes in the way the corporations of Bangladesh run.

10. Legal enforceability may also push the companies to follow good-business
practice; from an ethical point of view, the companies that are highly profitable in Bangladesh or producing products/service that are risky like tobacco must be sanctioned to have a decent budget for CSR partnership implementations.

11. Tax rebate for donation/ investment in CSR partnership may be introduced by the
government.

12. Corporations themselves may organize CSR/partnership trainings and invite key
personnel to participate, giving a full breadth of sharing CSR concepts and CSR engagements for adoption and implementation. 13. Corporates may support in solving some persistent social issues that may ultimately buy-in the committment to champion other partnership projects. 14. Corporations may introduce CSR newsletters to potential clients, slowly building their interests. 15. CSR education at the college and university level may be introduced so that future employees of the corporate understand the benefits of CSR and may work as a catalyst for the top management to introduce CSR programs. 16. Promote CSR through local trade bodies and people's organization. 17. CSR ideas and partnering trainings need to be organized either at the NGO, Government or the private level so as to build the knowledge base to promote effective CSR and partnerships. 18. Myth that corporate giving is CSR has to be broken through information sharing. 19. Build countrywide CSR awareness and send signal to the corporate sector that CSR offers social and commercial benefit to the companies implementing CSR programs.

Conclusion
CSR has meant different things to different people. It is viewed as corporate giving or donation and its real impact that connects back to the organization is not properly understood. This lack of understanding is an opportunity and threat at the same time. CSR in the SME sector has not entered in Bangladesh; therefore, the great majority of people working in the SME sector is being deprived of the benefits of any CSR partnerships. Given the corporate culture in Bangladesh, CSR practices may be worked into smaller entities that are open to suggestions and based on available experience larger corporations can build their CSR practices. The market review presented above showed that the corporate bodies pay less attention to CSR due to not being particularly convinced that it can add to strengthening company image and ensure sustainability. The common belief of CSR being a cost center rather than a profit center have not entered the corporate mindsets; therefore, practical examples need to be placed in front of them and develop a sturdy academic and practical understanding of how the CSR practices are adding to company image, sales and profitability, while keeping the lines of communication open with the corporate bodies. Finally, for CSR to take shape in Bangladesh it is vital to dissect real life cases pertaining to CSR and partnerships within Bangladesh and beyond and develop a community of CSR practioneers and facilitators/consultants. (1st Published in the Executive Times, November 2007 issue. This is a slightly updated version.)