Corporate Social Responsibility Initiatives: An Analysis of

Voluntary Corporate Disclosure

The purpose of this paper is to examine the extent of involvement of companies in

Corporate Social Responsibility (CSR) initiatives in terms of high, medium and low CSR
performers. Secondary data based on a sample of 93 companies operating in India
have been analyzed by applying content analysis of annual reports and individual
websites of the companies. Extent of social involvement of the companies has been
observed on the basis of their respective social scores. The results indicate that some
firms are highly involved; some are moderately involved while others are lowly involved
in CSR arena. The study further reveals that firms are highly concerned about their
shareholders followed by human resources. The firms are found to be highly engaged in
providing retirement fund benefit plans and least percentage of companies has been
found to be engaged in providing employment to SC/ST/BC and disabled persons. By
applying Kruskal-Wallis test and Mann-Whitney U-test the study reveals that there is a
significant difference between the average overall CSR scores of different categories of
CSR performers. The major limitation of the study is that CSR measurement is based
on voluntary disclosures by the companies. Better measures of CSR are, therefore,
desperately needed for future studies.

INTRODUCTION

The role of business in society has undergone several changes. Awareness of the
impact of business on society and environment has grown along with the increasing
socio-regulatory pressures. It is no longer simple enough to employ people, make
profits and pay taxes. Companies are now expected to be responsible, accountable and
benefit the society as a whole (Brown, 2001). Business cannot escape from society and
society cannot exist without business (Davis and Frederick, 1985). Thus, there is a two-
way relationship between business and society, Cannon (1994) holds the view that
business is expected to create wealth, supply market, generate employment, innovate
and produce a sufficient surplus to sustain its activities and improve its competitiveness
while contributing to the maintenance of community in which it operates. Society is
expected to provide an environment in which business can develop and prosper,
allowing investors to earn returns while ensuring that stakeholders can enjoy the
benefits of their involvement without any fear of arbitrary and unjust action.
Organizations are the citizens of society and therefore, they owe certain responsibilities
towards the society. Business can also be viewed as a custodian of society's resources
- people, raw materials, services and infrastructure. To convert raw material into
profitable goods, business needs the inputs from the society and its output is consumed
by the society itself. The relationship between business and society is shown in Table 1.

Corporate Social Responsibility (CSR) is what an organization does to influence the

society positively in which it exists. The concept of CSR has been evolving for decades.
However, the modern era of social responsibility may be marked by Bowen's (1953)
publication of Social Responsibilities of the Businessman, considered by many to be the
first definitive book on the subject. He defines CSR as "an obligation to pursue those
policies, to make those decisions, or to follow those lines of action that are desirable in
terms of the objectives and values of our society". The definition of CSR is not complex.

Scholars have taken varying stances on conceptualizing CSR. While some take CSR as
an obligation, others consider it as a strategic tool. According to Steiner (1972), "a social
contract between business and society that relates to the corporate impact on the
welfare of society". McWilliams and Siegel (2001) defines CSR in terms of actions that
appear to further some social good, beyond the interest of the firm and that which is
required by law. In the words of Campbell (2006) "CSR sets a minimum behavioural
standard that aims at doing no harm to stakeholders and if it has happened then
rectifies it as soon as it is identified". CSR is the alignment of business operations with
social values. It takes into account the interests of stakeholders, viz., employees,
customers, shareholders and the community in the company's business policies and
actions. CSR focuses on the social, environmental and financial success of the
company - the so-called triple bottom line or sustainable development - with the aim to
achieve social development.
BENEFITS OF CSR

Companies have been encouraged to adopt and expand CSR efforts as a result of
pressures from customers, employees, communities, investors, activist organizations
and other stakeholders. As a result CSR has grown dramatically in recent years (Centre
for Corporate Research and Training, 2003). Companies have experienced a range of
bottom line benefits from being engaged in CSR which include:

Improved Financial Performance and Reduced Operating Costs: The desire and urge in
business to be sensitive about social responsibility has a significant impact on financial
performance, resulting in increased revenues and reduced operating costs. The
adoption of sensitive attitude towards the community forces business to strive for
environmental improvements, for adopting eco-friendly measures, using less energy
and material, waste management, etc. It is an old saying that there is wealth In
industrial waste and it needs only appropriate eyes to identify that wealth. A project
undertaken to separate industrial waste in Tata Steel cost the company Rs. 100 lakh in
the first year, as it invested in 400 bins but selling the waste earned it Rs. 20 cr
(Agarwal, 2008) . A number of studies conducted in past arrived at positive association
between CSR and financial performance (e.g., Preston and O'Bannon, 1997; Russo and
Fouts, 1997; Sturdivant and Ginter, 1977; Waddock and Graves, 1997; and Ruf et al,
2001).

Enhanced Brand Image and Reputation: A company considered socially responsible

can get benefit both by its enhanced reputation with the public as well as its reputation
within the business community. Contrast to this, the companies which are poor in social
responsibility suffer damages in the form of low sales, less investments, etc. Social
action programs create favorable public image (Krishna, 1992; and Rashid and Ibrahim,
2002). Hindustan Lever Ltd. (HLL) through its Surf Excel brand gained immeasurable
reputation in the course of its campaign of education to poor children
(http://living.oneindia.in). In a survey conducted by Confederation of Indian Industry
(2002), majority of the corporate respondents had the perception that CSR leads to
improved brand image.
Increased Sales and Customer Loyalty: A number of studies have suggested a large
and growing market for the products and services produced by socially responsible
companies while the business must satisfy customer's key buying criteria such as price,
quality, safety, durability, ease in handling and using the product. Greyer and William
(1997) empirically proved that consumers expect firms to conduct business ethically,
and they also showed their willingness to reward ethical behaviour and punish the
unethical behaviour of firms through their purchase behaviour. Mohr and Webb (2005)
also evidenced in their study that customers prefer to purchase from the companies
which are conscious about CSR.

Increased Ability to recruit and Retain Employees: Companies going for CSR find it
comparatively easy to recruit and retain the skilled employees for a sufficient long
period of time which are vital for the success of business. This is empirically tested and
proved by Turban and Greening (1996) that corporate social responsibility is positively
related to a firm's attractiveness as an employer. In a subsequent study by Luce et al
(2001), it was evidenced that corporate social performance is positively related to a
firm's familiarity which in turn affects organizational attractiveness as an employer.

LITERATURE REVIEW

Various studies have been conducted to examine the attitude of companies towards
CSR initiatives. Some of them are as follows:

Abbott and Monsen (1979): He examined the extent of corporate social involvement of
450 firms out of Fortune 500 firms. The researchers also investigated the impact of CSR
on corporate profitability. CSR was measured by applying content analysis of the annual
reports for the year 1974 by generating Social Involvement Disclosure (SID) index. The
SID index covered the categories, viz., environment, equal opportunity, personnel,
community involvement and products. As per CSR disclosure, firms were found to put
maximum emphasis on environment (50%), followed by equal opportunity (32.2%).
Personnel (29.4%) and community involvement (25.5%) didn't receive much importance
by the firms. Firms were found to put least emphasis on products (10.5%). The firms
under reference were divided into high and low groups on the basis of their social
involvement. All the firms were then evaluated on the basis of their profitability in terms
of return to investors for the period 1964-74. The researchers discovered little difference
in investment yield between firms in the two groups, even when controlling for size. In
other words, no association was revealed between CSR and investors' rate of return.

Krishna (1992): He examined the attitudes of managers of large-scale enterprises

towards CSR implementation as one of the objectives of his study relating to CSR. The
study was based on a sample of 529 managers occupying top and middle positions in
the management hierarchy in public and private sector undertakings in India. The data
were collected through mailed questionnaire. The following were the findings of the
survey: (1) Majority of the managers opined that there is a value change in the society
and industry has a dominant role in shaping the society into a socialistic society; (2) A
good number of managers were of view that there is a rise in public demand for socially
responsible behavior by industry; and (3) The following were the important arguments in
favor of corporate social responsibility: (a) social action programs create a favorable
public image; (b) social expectations are high and if ignored will result in the creation of
public hostility towards industry; (c) involvement in social programs is a moral
responsibility of the industry; (d) it is in the long-run interest of the company to get
directly involved in social issues; (e) industry has necessary resources and talent to
engage in social action programs; (f) the primary social areas of effort were found to be
job creation, internal employee service programs and encouraging consumerism; and
(g) the secondary social areas of efforts were found to be pollution abatement, resource
conservation measures, society improvement programs and rural development.

Human resources: CSR and Business Sustainability - HR's

Leadership
We also gained considerable new insights into how organisations in the countries had
embedded CSR within their core business in four key areas - with HR professionals
uniquely positioned to drive results in each.

Employment Branding: HR professionals can help to build trust for their organisations
by identifying the important issues in the communities where they operate and then
developing mutually beneficial actions. In addition, they should monitor global fair labour
standards and practices to be sure their workplace conditions conform. When a
company is successful with its employment branding strategy, more consumers will
favour its products, and more suppliers will want to work with it. Most importantly, as we
discussed earlier, more potential employees will want to join the company, and it will be
easier to retain existing employees.

Corporate Culture: The pilot study responses indicate that HR professionals in the
seven countries are using two principal means to build an ethical corporate culture
through CSR: they are including CSR in their organisational mission statements and
incorporating CSR efforts as part of their organisations' goals.

Ironically, though, the second-ranked CSR driver in most of the seven countries was
promoting public relations. Employee activism ranked third in the United States, but
larger percentages of respondents from Brazil and India than from the US reported that
it was a driver of their CSR programmes. The low figures for employee activism
represent a wake-up call, since employee commitment and engagement are so crucial
to the success of any CSR programme.

Corporate Strategy: HR professionals need to understand the business strategy of their

organisations to anticipate competencies that will fuel future growth. CSR can be a
helpful tool in the process of making sure that workplace culture and brand align with
strategic corporate goals.

Corporate social responsibility

 Manila Bulletin, April 11, 2009

Introduction: Investment in human resource a large part of educational services must

consist of the development of human and labour resources. This is called investment in
human capital because, in an economic sense, it is very much the same as investing in
machines and other material capital. We need additional product output to more than
repay the new investment costs.

Similarly, it pays for an individual to invest in human capital – additional education –

because the increase in education can increase the earning power of the person being
educated by more than the cost of additional education. Investing in human capital is
easier said than done. For those who have the financial and intellectual capabilities to
invest, with the end in view of making money out of their investment, such an
investment can be a worthwhile move. In contrast, to those who are poor and
consequently, uneducated, this kind of investment will not be a wise choice. But if they
are supported by generous donors, the poor who have potentials can make a
difference. What is corporate social responsibility (CSR)?Corporations are now viewed
as integral parts of society whose role is to help society develop which, in turn, insures
to a great extent the long-term viability of the corporations. The values, visions, and
strategic objectives of corporations should be compatible with those of society and the
community. Hence, there must be congruence in purpose between and among these
entities, not to mention the interests of stakeholders. In simple terms, this is the essence
of corporate philanthropy or corporate social responsibility. Corporate social
responsibility (CSR) is an organization’s obligation to be accountable to all its
stakeholders in all its operations and activities with the aim of achieving sustainable
development not only in the economic dimension but also in the social and
environmental dimensions. It aligns business operations with social values. How is CSR
construed in the Philippines? From July to early October, 2007, Newsbreak Magazine
conducted a survey among 104 large-scale companies, local and multinational, asking
them 11 questions with triple-choice responses and ranking options. Out of this number,
54 companies responded. The questions were so formulated to determine if CSR was
embedded in the company in terms of structure and leadership, funding and logistics,
and reporting and assessment. Follow-up interviews were conducted. Here are the key
findings: (1) In most of the companies, the CEO initiates CSR programs; (2) The entry
point for CSR practice has been concentrated on two aspects: community work and PR;
(3) Getting the other functional groups involved in embedding the CSR strategy into the
way the company plans and implements products and services is rare; (4) Many
companies leave the CSR implementation to the corporate foundation, while half say
they let the public relations or corporate communications group take the lead; and (5)
Next to the community, the employees are the stakeholders that the companies target
for their CSR. Investors are low priority. In the 2007 Philippine CSR report, 19 billion
pesos were poured by the business sector into social development programs for the last
ten years. Of this, 46 percent went to human services development, especially
education and training; 27 percent was spent on livelihood and employment; and 25
percent was allocated to the environment. Inculcating CSR among university students
Sometime in 2007, 130 students of the Asian Institute of Management (AIM) were
engaged animatedly in discussing a problem – how to find ways for a fictitious mining
company to preserve the ecosystem of a small island located in Southern Philippines, to
improve the lives of its 350,000 residents and to ward off unwanted attention from rebel
groups and corrupt officials. Putting together students from government, business, and
NGOs, sectors which have traditionally distrusted each other, the simulation was the
latest attempt of AIM to teach CSR in an engaging way.At the Ateneo Graduate School
of Business, CSR is not offered as a separate course but is captured in Business Ethics
where students are encouraged not just to comply with laws, but to make choices
according to a set of values. CSR is taught in the context of nation building, according to
Albert Buenviaje, dean of the graduate school. Ethics is also the jump-off point at the De
La Salle Professional School, Inc.’s School of Business to introduce the concept of CSR
to graduate and post-graduate students. MBA students are required to take a subject on
Ethics, Career and Family Life while doctoral students take a subject called Business
Ethics and Corporate Social Responsibility and another subject on Sustainable
Business. The interweaving of CSR content in all graduate courses, according to
Associate Dean Ben Teehankee, is “a work in progress.”The University of the
Philippines School of Labour and Industrial Relations offers two subjects touching on
CSR in its Master in Industrial Relations program, which are Special Problems in HRD
and HRD at the National Level, both of which tackle, in part, the business foundations’
involvement, through their CSR programs, in the promotion of training and education. At
the School of Management of the University of Asia and the Pacific, students learn
about CSR at the undergraduate level – third year students are required to take a three-
unit subject titled Introduction to People Development – Corporate Social Responsibility
just before they decide on the focus of their master’s program. Other schools will soon
join the fray. By next school year, colleges and universities all over the country will be
required to include a three-unit subject on CSR and Governance in the curriculum of
undergraduate students. Business corporations involved in education and training A
number of corporate foundations which are members of the League of Corporate
Foundations (LCF) are actively involved in education and training. Three of them,
featured below, are Petron Foundation, Meralco Foundation (now MFI Foundation), and
Union Bank Foundation. Petron Foundation. The thrust of the Foundation is education
for children in marginalized families. In 2002, Petron sealed its social development
efforts for youth when it shifted from providing college scholarships to enabling
elementary-aged children to attend and complete primary school. Poverty is largely
driven by a lack of education and/or inaccessibility of education to a large portion of
society. Initiated in 2002, the Tulong Aral program of Petron has since put thousands of
impoverished children into 80 public elementary schools. Its first graduates are showing
how, given a chance, they can make their benefactors proud of giving this gift of
education. Of the initial batch of Petron scholars, 329 have been recognized as
outstanding students while 42 received medals as honour students. The first batch of
Petron elementary scholars graduated in 2008, many of them with top honors. The
dreams of some 1,137 students under the program were finally turned into reality with
the successful partnership between Petron and the Department of Education through
the Adopt-A-School Program. Meralco Foundation. Whenever the name of Meralco
Foundation (now MFI) is mentioned, Technical and Vocational Education comes to
mind. The Foundation has been at the forefront of tech-voc education in the country. A
certificate from MFI is considered the gold standard and a guarantee for employment.
One of its most successful programs is Educational Technology. It is a three-month
intensive program implemented in collaboration between MFI and the Consuelo
Foundation, with funding from the World Bank, the International Youth Foundation, and
Lucent Technologies. The program provides disadvantaged youth with marketable
demand driven skills by giving partner institutions the technical capability to handle and
manage an integrated education program for out-of-school youth. In 2002 alone, the
project benefited 470 out-of-school youth nationwide, with most them now either self-
employed or gainfully employed in various establishments. Another educational
program of the Foundation is the well-acclaimed Family Farm School in Bais City,
Negros Occidental. This school offers a three-year Special Secondary Agriculture and
Technology curriculum. Union Bank Foundation. CSR has stepped up efforts for
Philippine education that, in the past few years, have provided billions upon billions of
private sector contributions – much-needed support for DepEd. Of course, a lot of these
CSR pesos for education are earmarked for hardware – for school buildings, computers,
and the like. Departing from the usual hardware projects is Union Bank’s As A Filipino
project. The project, anchored on the specially commissioned story book with the same
title, aims to help public elementary schools develop the reading skills of young learners
and inculcate in them time-honoured Filipino values. Other corporate foundations
involved in the promotion of quality education are Ayala Foundation (Gilas), Coca-Cola
Foundation (Little Red Schoolhouse), Lopez Group (Knowledge Channel), McDonald’s
House of Charities (Bright Minds Read), Lucio Tan Group of Companies (Foundation for
Upgrading the Standard of Education), and Metrobank Foundation (Search for
Outstanding Teachers).Conclusion CSR has become a significant feature of business
practices in the global economy. While a good number of organizations in advanced
economies adopt CSR as a core business strategy because it can lead to benefits such
as attracting qualified and motivated human capital, these companies are forced to act
in a socially responsible manner due to pressure from the media, NGOs, consumers
and similar groups. These stakeholders, whose interests should be taken into account
in the decision-making process of a company, simply have the power to influence the
financial performance of a company. But in developing countries like the Philippines,
even though the stakeholders have similar interests in companies, their power is not
strong enough to influence corporate organizations into integrating CSR principles in
conducting business.As mentioned, CSR is committed to the just and sustainable
development of communities. Education, a vital instrument for social, political, and
economic development, remains an important and vital aspect of CSR.

Be an insider on social responsibility: leading the movement

at your organization can benefit your career

HR Magazine, Feb, 2008 by Adrienne Fox

Human resource professionals can tie what they do to business strategy, impact the
bottom line, gain respect of the C-suite and boost their careers with three little letters: C-
S-R.

Corporate social responsibility (CSR), also called sustainability or citizenship,

contributes "to sustainable development by working to improve quality of life with
employees, their families, the local community and stakeholders up and down the
supply chain," according to the World Business Council for Sustainable Development, a
Geneva-based global association of companies.

CSR has been sweeping the global business community as companies seek to position
themselves as both profitable and responsible. Within companies, the movement tends
to happen organically and without any clear functional leader. In one company, the
marketing department may lead the CSR strategy, while in another it may be the
environmental sciences division. With no convention set, HR professionals have an
opportunity to step up and fill the CSR leadership void. It makes sense for HR to lead
CSR: Recruitment, retention, morale, productivity, recognition and rewards as well as
innovation are major components of a CSR strategy. (For more information on CSR and
HR, see "Corporate Social Responsibility Pays Off," in the August 2007 HR "CSR aligns
HR with the goals of the company and the C-suite," says Tareyece Scoggin, SPHR,
employee relations manager at Standard Parking in Chicago, who drives CSR at her
company. "So much of the CSR sweet spot [where social good overlaps business
opportunity] lives in HR. We have a unique position to leverage the human capital that
we're charged with recruiting, retaining and developing. In the end, we are able to be
much more of a business partner through CSR."

Nearly two-thirds of U.S. HR professionals are directly involved in CSR activities,

according to 2007 Corporate Social Responsibility, a study by the Society for Human
Resource Management (SHRM). But only 13 percent of HR professionals were mainly
responsible for creating CSR strategy, and 23 percent were charged with implementing
the strategy.

"A lot of times [the responsibility for] CSR falls to the public relations and marketing
departments, but if you start talking to CEOs about morale, loyalty and employer-of-
choice [through CSR], it becomes very obvious that HR needs to lead it," says Lin Blair,
SPHR, HR project leader at Arkansas Blue Cross Blue Shield in Little Rock. "But HR
needs to raise its hands."

The skills needed to create and lead a CSR strategy dovetail nicely with HR
professionals' backgrounds, experience and expertise. The bonuses: CSR can raise
their profiles and expose them to more areas of business.

As opposed to public relations, marketing or finance, HR professionals already work

with the organization's entire human capital, notes Scoggin, who serves on the SHRM
Corporate Social Responsibility Special Expertise Panel. "We are already collaborating
with other functions. We are negotiating daily and using our soft skills--all of which are
necessary to gain acceptance of CSR."

As employee relations manager, Scoggin has heard from employees that they want a
more organized CSR effort at the company. "HR is leading the dialogue at Standard
because I bring it up," she says, simply.

While one function may lead CSR, it must be a multifunctional effort--requiring another
important skill set of HR pros. "There needs to be collaboration," explains Lew
Karabatsos, executive vice president of client relations at CreateHope, a citizenship
consulting firm in Washington, D.C. "HR shouldn't drive the environmental agenda, for
example, but it needs to work with the environmental folks to embellish on that
strategy."

Many companies may invoke the words "ethical" and "responsible," but unless
employees live those words from the CEO on down, there will be no real impact of CSR
on the business strategy. Ron Vassallo, managing director, international, at
CreateHope, adds, "Despite the fact that CEOs or the board might be behind the cause,
[they] don't give it legs. Employees are cynical. CSR only gets legs and acceptance
when employees embrace it. HR can engage employees in the strategy." (For a list of
traits needed to succeed in this role, see "Attributes Needed to Lead," below.)

Where Does HR Start?

When companies need help creating and implementing CSR strategies, they may turn
to Business for Social Responsibility (BSR), a San Francisco nonprofit that provides
CSR solutions for 250 member companies and other enterprises.

"Often, there's been a mandate from a CEO and a job created" to pursue a CSR
strategy, says Emma Stewart, BSR director of environmental strategy. "There's so
much jargon and science involved, the learning curve is steep. But, actually, it's better if
you promote from within because someone inside knows the business, what employees
are capable of and where the opportunities for CSR lie."

Stewart says the successful CSR leader knows the politics of the organization and
how--and with whom--to get things done. That person may continue to lead the CSR
initiative even if the operation gets larger as the company starts to hire content experts,
such as environmentalists or labor-rights advocates.

Human Value Management. The Influence of the

Contemporary Developments of Corporate Social
Responsibility and Social Capital on HRM**
Management Revue, 2006 by Schoemaker, Michiel, Nijhof, Andre, Jonker, Jan

In both practice-oriented and academic discourses the concepts of corporate social

responsibility (CSR) and human resource management (HRM) are often treated
separately. It is argued here that this is an outdated approach. Starting from the
observation that organisations develop towards open systems, it becomes obvious that
CSR and HRM are intertwined. In open systems cooperative action is based on the
willingness of humans to bring in and develop their talents as part of communities of
work. The proper functioning of organisations becomes dependent on shared values
between networks of people. At the same time these networks broaden the perception
of what (new) roles and functions organisation should fulfil. This brings in the notion of
CSR. Organisations are expected to encompass a broadening range of responsibilities
combining the delivery of added value in the market place with broadening
responsibilities. These developments require a repositioning of the role and perception
of HRM towards a new strategic approach labelled here as Human Value Management.
This paper offers an exploration of this HVM approach by comparing it to HRM and
linking it to CSR. As such it offers a conceptual framework enabling the formulation of a
series of questions for future research.

Introduction

The position and function of the business enterprise in contemporary society is

changing. On the one hand business is still focused on the customer and the market
place. Consequently, much attention needs to be paid to how emerging issues are
internally organised to deliver added value(s) to the customers. Parallel to this more
internally-oriented development, organisations have to function in a more and more
complex societal context. Doing business is no longer only making profits; organisations
also have to behave in a way we have gradually started to call "socially responsible".
This quest for new and expanding responsibilities - often called Corporate Social
Responsibility (CSR) - implies taking into account issues beyond the conventional
business scope. CSR refers to a growing appeal asking organisations to take a broader
"social responsibility" into account, behaving accordingly in a accountable manner thus
behaving as "good corporate citizens". CSR can thus be seen as internalising
externalities in the broader societal context. In the worldwide quest for developing an
ISO-standard for CSR many parties consider the following definition of CSR (ISO
26000:13):

"Social Responsibility refers to the activities of an organization aimed at contributing to a

sustainable society and environment, as well as maintaining the organization's
continued existence, by minimizing negative impacts and maximizing positive impacts
on the society and environment through proactive stakeholder communications and
engagement throughout the organization's sphere of influence. Social responsibility is
about organizational initiatives that start with, but go beyond, meeting legal
requirements and that contribute to social acceptance. An organization only obtains its
social acceptance by observing national laws and applicable international agreements
and by responding to an ever-changing society that has constantly changing
expectations".

The central underlying notion is that organisations should act beyond their classic
"business" boundaries, not only generating profit but also (and at the same time)
contributing to the "glue" and "cohesion" of society, taking into account the social and
ecological environment. This challenges the belief, most established in Anglo-Saxon
economies, that social issues are peripheral to the challenges of corporate
management. A fundamental reason for the emergence of the CSR debate is the
interconnectivity, interdependence and increasing transactivity of the organisation with
its social, political, economical and ecological environment. Classical organisational
boundaries have become more or less obsolete or redundant. What once was Outside'
the organisation is now 'inside' and vice versa. An organisation is forced to be an open
'system' operating as a flexible network in an unpredictable and complex environment.
Key words in the CSR debate at large are, among others, transparency, accountability
and inclusivity. Given the developments of the past decade in this field it is reasonable
to assume that CSR is indeed becoming important. As companies seem to move from
being social factors into social actors, they are faced with new strategic issues. Or as
Davis (2005) states ".. .companies must build social issues into (their) strategy in a way
that reflects their actual business importance." A very good example of this
development is the pharmaceutical firm Novo Nordisk. This organisation has
incorporated societal goals (the fight against diabetes) into the companies mission,
goals and strategy. Likewise the logistics company TNT gives support to the World
Food Program.

It is at the interface of the organisation and its context that the importance of CSR really
becomes apparent. Organisations can no longer just produce a good or deliver a
service and bring it to the "market place". Organisations have to make clear what their
function in society is and what societal issues and problems mean to them, which one's
they will address and how they will address them. The challenge is to incorporate
externalities in organisational actions while at the same time using the capabilities and
capacities of the organisation to contribute to the traditional business role. In essence
CSR addresses the reconfiguration of the balance between institutions that together
make up society (Habisch/Jonker 2005). This implies the development of social capital
in addition to (organisational) human capital (Schoemaker/Jonker 2005). While human
capital refers to the capabilities and virtues of the workforce, social capital refers to the
shared values and active connections that bind members of networks together and
make cooperative action possible.1 The consequence of this wider societal perspective
is a number of new organisational themes are emerging, such as values, identity and
internal competence development (Jonker/Schoemaker 2004). Organisations depend
more and more on their social capital to be able to combine the delivery of added value
in the market place with social responsibility (Cohen/Prusak 2001). These themes taken
as a whole suggest an emerging movement towards a value(s)-driven perspective of
the organisation. In order to become visible this perspective needs to be translated into
a business strategy and materialise in a subsequent business proposition. This
perspective puts a strong emphasis not only on the changing role of the company as a
societal actor, but also on its employees as being the everyday human representatives
of that organisation. As a consequence they ought to be the primary carriers of the
organisational values, thus representing the organisation's identity. On the contrary, in
the contemporary human resource (HRM) debate a strong one-dimensional emphasis is
put on internal performance management (Paauwe 2004). The focus is on optimising
organisational processes through the use of dedicated human resources. This focus is
grounded in an implicit view of the organisation as a closed system. The growing
attention to CSR and social capital suggests that this closed-system perspective is more
and more under pressure. Against this background it becomes relevant to investigate
the possible relations between human resources management, corporate social
responsibility and social capital. This leads to a central question we would like to
explore here. What is the nature and possible impact of the relation between corporate
social responsibility (CSR) and social capital (SC) on human resource management
(HRM)? Furthermore we would like to investigate what the possible consequences are
for the existing mainstream conception of HRM? These questions will be elaborated by
succinctly exploring the different capital discussions. More particularly we will highlight
the development of social capital. We presume that a balanced configuration of diverse
(tangible and intangible) capitals is a prerequisite for the organisation to function as an
open system. After this exploration we will continue by proposing a limited number of
strategies useful in developing these capitals. After this exploration of the possible
consequences for HRM we will conclusively propose an agenda for further research
based on what we call the concept of the responsible organisation. Central to this
concept and the research agenda stands the hypothesis that the "density" of social
capital influences the effectiveness of the organisation as an open system (McEwan
2001). The creation and maintenance of this density should be a fundamental part of a
deliberate organisational strategy in that respect. This exploration will finally advocate
that in the future HRM should be gradually replaced by Human Value Management
(HVM).
The human resource management dimensions of corporate
social responsibility in Turkey: a survey

There are several CSR activities for both internal and external stakeholders. For
example, loans, medical care, pension funds, maternity and safety programs are CSR
activities for the internal stakeholders. The external CSR mainly consists of investment
in community outreach, good employee relations, creation and maintenance of
employment, environmental stewardship and financial performance etc. (Johansson and
Larsson, 2000).

4.3 CSR Activities and HRM Functions

Successful CSR programs rely on enlightened people management practices. The HR

department is responsible for many of the key systems and processes (e.g. recruitment,
training, performance appraisals) on which effective delivery depends. Getting the
employment relationship right is a precondition for establishing effective relationships
with external stakeholders. CSR does not change so much as broadens the HR
agenda, and focuses on effective implementation (CIPD, 2002).

In the survey, the respondents were asked to evaluate the HRM functions such as
recruitment, training, from the CSR perspective.

The CSR may increase attractiveness to current and prospective employees. For
example, in 1995 the senior managers at Shell reported a tremendous loss of morale
and a significant downturn in recruitment, when Shell suffered its difficulties in Nigeria
and with Brent Spar. However, once Shell had made its commitment to CSR, through
much greater transparency and engagement with external stakeholders, it found itself
swamped with potential employees.

In addition to that, there are several studies confirming that CSR leads to an improved
recruitment. A survey by Cone/Roper found that good corporate reputation come
second only to career growth potential as the most important consideration for people
when choosing a new employer--ahead of starting salary, fringe benefits, and social
facilities (Pickering, 2005).

Today companies, having distinguished themselves as the frontrunners in CSR, have

tried to translate the concept of CSR into a daily business reality using tools such
recruitment (CSR Europe, 2002). According to a survey by the Points of Light
Foundation (2003), 58 percent of U.S. companies use their employee volunteer
programs for recruitment and retention purposes (BRS, 2005).