Corporate Social Responsibility (Csr): Bangladesh Perspectives

Categories: Bangladesh Business Responsibility

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Corporate means formed into an association and endowed by law with the rights and liabilities of an individual. Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society- at- large. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. To find a universally agreed definition of CSR is difficult if not impossible. Rather than adding to the futile debate on what elements constitute CSR, we choose to focus on the broader principles upheld by CSR.

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We view CSR as a universal business strategic imperative that can be 'localized' to suit organization’s business objectives. It is not a question of 'one size fits all'.

A definition of CSR has come up in Bangladesh as "a set of business practices based on ethical norms and transparency that contributes to the sustainable development of internal and external stakeholder in the best interest of business, society and environment".

While debate continues regarding elements that define CSR, few can deny that CSR practice improves operational efficiency, increases standards and reliability in the supply chain, and positively affects employee motivation and loyalty which, in turn, leads to greater productivity.

Other drivers for companies to engage their stakeholders include the fact that CSR practice strengthens a business's license to operate. By facilitating services needed in the community in which a company is seeking entry, CSR practice often enables the company to gain popularity with its customer base, which, in turn, leads to increase sales or retention of market share.

It is important to note, however, that CSR practice is not exclusively for the large companies; neither is it only for those whose concerns are in the export business. Such prevalent misperceptions need immediate rectification, particularly in Bangladesh, where all businesses, both large and small, can enhance their competitiveness through greater adoption and implementation of CSR. By embracing the values of CSR, the Bangladesh private sector can send a strong signal to the global market that they are discharging their commitments to society. Failing to do so voluntarily inevitably leads to adverse external pressure, often with more strict guidelines and under extremely tight timelines. The Centre will help the private sector be more proactive rather than reactive.

CSR practice in Bangladesh is a relatively new phenomenon and is often misperceived as philanthropy or charity. Also, very often, there is a clear lack of integration of CSR with core business strategy. Perhaps the greatest challenge in CSR implementation is the fact that CSR practice is perceived by many as a cost – a threat – rather than as a business opportunity. There is also a lack of quality data and resources to develop a business case for CSR and enable the private sector to relate better by learning from peers.

It is these observations and learning that led us to develop the CSR Centre Concept. Through the Centre, we hope to make available better products and tools that will increase awareness on CSR practice benefits, and will also help quantify the intangibles of CSR. By championing CSR under a specialized institutionalized framework, we hope that the CSR Centre will have greater economic impact and value addition that have so far eluded business in Bangladesh.

It is very true that few of us have the luxury of committing additional resources to new initiatives. That is where the benefits of CSR come to the fore. CSR is about partnerships and sharing resources, and is not limited to just financial commitments. Partnerships based on equity principles, where businesses can reach out to others with complementary strengths, is a cornerstone of good CSR practice. Through such resource collaborations, businesses can find long term win-win solutions to complex problems, expand their network and find new business opportunities in an increasingly competitive world, and, more importantly, free up resources to concentrate on core competencies.

Strategic CSR practices, consistently applied in Bangladesh, will improve the general competitiveness of the private sector vis-à-vis global competition, as well as develop Bangladesh's international image as a responsible global manufacturer and service provider.

Corporate Social Responsibility (CSR) as defined by the CSR Centre is a set of business practices based on ethical norms and transparency that contributes to the sustainable development of internal and external stakeholders in the best interest of business , society and the environment. While debate continues regarding elements that define CSR, few can deny that CSR practice improves operational efficiency, increases standards and reliability in the supply chain, and positively affects employee motivation and loyalty which, in turn, leads to greater productivity.

Corporate Social Responsibility (CSR) when defined at this age of changes world over is a set of business practices based on ethical norms and transparency that contributes to the sustainable development of business and society where environment is being built-in as an essential element. While debate continues regarding elements that define CSR, few can deny that CSR practice improves operational efficiency, increases standards and reliability in the supply chain, and positively affects employee motivation and loyalty, which, in turn, leads to greater productivity. For such reasons the term “stakeholders” is being redefined to include all the apparent external stakeholders. Because of the inclusion of environment into CSR, even the bottled water businesses are now under threat to abandon the plastic bottles and the petroleum companies are under threat to find out alternative energy sources.

For companies to engage all their stakeholders, internal and external include the fact that CSR practice strengthens a business's license to operate. By facilitating services needed in the community in which a company is seeking entry, CSR practice often enables the company to gain popularity with its customer base, which, in turn, leads to increased sales or retention of market share. Business Executives and leaders are being encountered in Talk Shows as to how they are reinventing their corporate missions to combat climate change, give back to local communities, communicate in an age of Facebook, blogs and they cannot opt for the option to remain unspoken.

In Bangladesh, a global food conglomerate Nestle has some operations but zero stakes in bottled water business though this particular company has about 50% share in this particular business in some of the countries of the world. Under their CSR practice in Bangladesh, as it is understood they have drilled a Deep well in Gazipore, Dhaka and built a water storage tank in order to serve the local habitation with water. By providing free water to the surrounding community, from a deep tube well they are virtually laying the foundation of their future bottled water business.

Therefore, this free supply by a company is not free in fact. Same Nestle was assailed by environmental activists on Facebook and Twitter globally for business practices that contribute to deforestation; within weeks, Nestle had announced a partnership with an independent non-profit, somewhere in the world to eliminate its dependence on unsustainable forest products. Internet with social media facebook and twitter already revolutionized our social communications not only at local level but also globally for day-to-day changes in a complex reality of urbanization, globalization, commercialization together with reshape-up of regulations world over.

In this age of gradually reducing Government stake in businesses world over, businesses are taking up the responsibilities by way of commercialization of public goods. Alongside tap waters, people are taking bottled waters; alongside Ramna Park, people are using Nandan Park; alongside free roads, people are being pursued to get prepared for Toll Roads, instead of partly export oriented units investors are being motivated for setting up cent percent exporting units. Instead of 100% local investments a free flow of factors of productions including both labour and capital (such as inflow and outflow of Foreign Direct Investments) world over is in demand which would gradually help a reduction of dependence upon the systems of Governments. With development of a consumer-base, investors are being motivated to invest in locally marketable products with surplus only to export.

Moreover, there is a growing concern over environmental degradation world over endangering human habitation on the earth so the emerging comparative systems of economics and social transformations are incorporating environment as an important element for socio-economic proportion. Bangladesh as well as whole of the deltaic region on the southern side of Himalaya is under a threat due to changing water flows in the down streams of Himalayas caused by increased melting of ice in Himalayas as well as landslide causing movements of billions of tons of silts towards downstream. Tectonic plates in the north and south of Himalayas are in clash at the point in line of Himalayas, which is threatening habitation in entire South Asia, down not only flow of silts and changing flows of water streams, but also series of earthquakes ranging from mild to severe are going to take place. It is not a threat to a particular country like Bangladesh but to the whole region.

Therefore, it will have to be addressed in CSR practices. In Bangladesh, the companies are directly, involved in CSR practices alongside independent organizations formed by volunteers who are being aided by the corporate. National budget of Bangladesh of fiscal 2011-12 created provisions for tax-deductible contributions under CSR. Similar provisions exist in countries around the world. CSR activities are always non-partisan around the world to help advancement of holistic and free play of thoughts and actions in a pluralistic social framework.

It is important to note, however, that CSR practice is not exclusively for the large companies; neither is it only for those whose concerns are in the export business. Such prevalent misperceptions need immediate adaptation, particularly in Bangladesh, where all businesses, both large and small, can enhance their competitiveness through greater adoption and implementation of CSR. By embracing the values of CSR, the Bangladesh private sector can send a strong signal to the global market that they are discharging their commitments to society. Failing to do so voluntarily inevitably leads to adverse external pressure, often with more strict guidelines and under extremely tight timelines. This is a situation, in which the private sector needs to be more proactive rather than reactive. Particularly in the area of housing/habitation in industrial cluster zones, the CSR should contribute by building high-rise dormitories through trade bodies. This will help strengthening of local Bangladesh Taka in view of the demand for wage-hikes.

CSR practice in Bangladesh is a relatively new phenomenon and is prone to frequent misperceptions as philanthropy or charity. In addition, very often, there is a clear lack of integration of CSR with core business strategy. Nestlé’s case has shown this but others are yet to follow the same. Perhaps the greatest challenge in CSR implementation is the fact that CSR practice is perceived by many as a cost, a sort of threat rather than as a business opportunity. Nestlé’s case as enunciated is a good example of CSR. From which it is clear that CSR does not only implies cost but also lays the foundation of business. There is a lack of quality data and resources to develop a business case for CSR and enable the private sector to relate better by learning from peers. It is necessary for businesses to assimilate data from all over such as the one of Nestle. Global changes in post Washington consensus era are giving the messages of corporate leadership for societal changes as the days of governments, on the points of views are over.

It is very true that few of us have the luxury of committing additional resources to new initiatives. That is where the benefits of CSR come to the fore. CSR is about partnerships and sharing resources, and is not limited to just financial commitments. Partnerships based on equity principles, where businesses can reach out to others with complementary strengths, is a cornerstone of good CSR practice. Through such resource collaborations, businesses can find long-term win-win solutions to complex problems expand their network and find new business opportunities in an increasingly competitive world, and, more importantly, free up resources to concentrate on core competencies.

Strategically drawn CSR practices, consistently applied in Bangladesh, will improve the general competitiveness of the private sector vis-à-vis global competition, as well as develop Bangladesh's international image as a responsible global manufacturer and service provider.