There are a number of new challenges ahead of businesses in the face of increasing competition between companies. The most important competitive advantage of the company is the preparation of its development strategy, which is focused on meeting the social needs of both staff and all stakeholders. Therefore, all companies have to look for new ways to interact effectively with different market participants, implementing them in numerous CSR projects. Why do companies have to develop Corporate Social Responsibility (hereinafter – CSR) why is it really important for business?
CSR is a vector of strategic business development
A prerequisite for a long-term and effective business operation is to understand the dependence of financial indicators on the quality of the image created by the company for investors, top management, consumers and the public.
For many market players, it becomes apparent that the success of the company depends largely not only on the quality of services provided and the skills of the staff, but also on the volume of its investments in the social sphere of the country. As practice shows, a well-thought-out corporate social responsibility policy helps to create a positive image of the company. This, in turn, brings some benefits: it helps in expanding the client base, facilitates attracting investments, makes more constructive interaction with government agencies, strengthens rating positions.
Implementing CSR projects, companies seek to achieve two goals: to increase their impact and reduce their risks. Solving the problems of society, they provide themselves with the necessary number of employees and clients, and create a worthy reputation.
Most often, a company's social responsibility implies a minimum set of components, namely, taxes paid on time, compliance with labor laws, regular payment of dividends, provision of a social package to company employees and certain charitable events. However, society expects companies to be responsible for doing business as a whole, not just one-off charity initiatives.
Development of CSR strategy
Current requirements for social initiatives necessitate the integration of social policy and corporate strategy, considering the allocation of funds for social needs as a form of strategic investment. Therefore, the development of CSR strategy should involve the implementation of measures in two main dimensions: internal – implementation of social activity inside the company and external – conducting CSR activities in interaction with the external environment.
Internal social programs are related to staff development, health care and creating safe working conditions, addressing socially responsible company restructuring, and improving business efficiency. External – focused on infrastructure and social projects, responsible business management, environmental activities, as well as strengthening the reputation and image of the company.
In order to meet the high demands of society and the market, the companies need to focus their attention not on point-based social activities, but on purposefully building a comprehensive CSR policy.
The implementation of social initiatives contributes to:
- increase of the loyalty and trust on the part of the stakeholders with whom the company interacts;
- reduction of reputational risks and critical perception of the company's activity;
- introduction of innovative technologies (finding of solutions to meet social, environmental needs and business problems drives innovation);
- attraction of investments and entering new markets;
- sustainable business development in the long run.
Steps of CSR projects implementation
Analysis of company activity
First of all, it is necessary to analyze the activity of the company, check the availability of assets, consider possible directions of investing funds and further prospects for business.
Formulation of CSR development scenarios
Based on the results of the strategic analysis, the social mission of the company is formulated, as well as the medium and long-term goals of not only the implementation of social initiatives, but of the business as a whole. Further, alternative programs are being developed that provide for measures aimed at achieving the sustainable development goals and define the CSR implementation strategy.
Choosing the optimal CSR development strategy
Possible scenarios for corporate social responsibility development need to be analyzed for the effectiveness of each social initiative and project.
Documentation of the chosen CSR strategy
The chosen CSR strategy is set out in the relevant document. This may be CSR Policy. Usually, companies create a department that implements CSR projects, strategic planning in this direction, and analysis of interim results. They also appoint people responsible for implementing CSR initiatives and achieving the intended performance indicators.
Implementation of measures included in the approved CSR strategy
In accordance with the developed strategy and plan for the implementation of CSR projects, preparation and implementation are underway
Summarizing the interim results of each stage of the CSR strategy implementation
At this stage, the results of the implementation of the targeted projects are evaluated, necessary adjustments are made in the long-term CSR program in accordance with the new challenges of the market and the conditions of the company (both internal and external).
With a well-thought-out organization, CSR projects become a mutually beneficial collaboration or an additional opportunity to communicate with clients and partners.
