Summary of Evolution and Revolution of CSR (By Wayne Visser)

NAME: Warda Khawar

ROLL NUMBER: 048

CLASS: MBO-3

SUBMITTED TO: Sir Uzair Farooq

SUBMITTED ON: 17th May , 2012

COMSATS Institute of Information and Technology , Lahore

The introduction of the paper starts with a brief introduction of the rise and fall of CSR. It

states that CSR is not a new concept rather it is being practiced under different names by

different people. The modern concept evolved in 1800 but it was with a book called "the

Social Responsibilities of a businessman" in 1950 that it gained popularity. Over the time

different people have defined it and so many different definition of CSR exist today.

However, the 1st generally accepted definition was given in 1970 by Archie Caroll who

focused on the economic, legal, ethical and philanthropic responsibilities. Many different

standards and CG codes are now in practice.

The writer states that having a look at a broader picture, CSR has failed on the entire four

dimension mentioned above and has presented some facts and figures. The CSR is declining

and we all should accept the fact that the old concept of CSR and the old CSR practices are

no longer viable.

Now that the CSR is failed, what are the reasons of its failure or what basically caused it. The

3 reasons for the failure are as follows:

Though the international standards are being adopted which require continuous

improvement and the companies are in fact adopting them. The CSR and the solutions

to the concerns and problems are still not meeting the required speed and scale. There

should be an incremental CSR that matches the pace of the evils like poverty,

environmental degradation, sustainability crisis and other such concerns.

CSR in the organization lack the top management commitment. This is because the

top management focuses more on the interests of the shareholders. Moreover, it is

regarded as a secondary function and not as a way of doing the business. Just a CSR

department or a CSR manager is appointed for the purpose.

CSR is regarded as uneconomic by many CEOs. A little number of the CSR activities

may pay the company back positively in a shorter span of time. But it is something

that is long-term oriented. And the CEOs wonder if the CSR pays back at all.

Moreover this is uneconomic for the companies to fulfill their social responsibility as

the financial markets do not regard and appreciate it up till now.

The paper states that we should come out of the illusion that CSR is good and effective and

should accept the fact that CSR's first phase (CSR 1.0) is over. We should move on towards

the next generation of CSR like the web 1.0 has moved to web 2.0. Just like Web 2.0 is more

collaborative, CSR 2.0 should also be more interactive and stakeholder driven (not just

stockholder driven). Two tables are presented, one relating Web 1.0 to CSR 1.0 and the other

relating Web 2.0 to CSR 2.0. This is done to show how the new CSR can come into existence

following the route taken by web. CSR 2.0 should have the following:

Stakeholder involvement, panels and innovative partnership

Transparent reporting

Shift of power from centralized to decentralized

CSR 2.0 should stand on five pillars or the five principles which are mentioned below:

Connectedness: Companies should move towards being more connected to all the

stakeholders than to the shareholders only, pursuing the collective interest and

taking care of the concerns of all.

Scalability: CSR should move towards being a massive scale effort than to being

mere pilot projects that do not match the scale and urgency of the problems like

poverty and climate change.

Responsiveness: Companies should be responsive to stakeholders' concerns in an

entirely new way. There should be an analysis as to whether a company is a part

of a problem or a solution and the responsiveness should be directed accordingly.

Moreover this unique responsiveness requires more transparency regarding their

reporting and the methods used for dealing with wastes, pollution, global warming

and other such issues.

Duality: Duality requires the companies to come out of their 'either this or that'

thinking. Rather companies should adopt more of an 'and/both thinking'. This

means that a company is following the international standards as well as being

responsive to the local requirements. They are culturally responsive without

ignoring the universal principles.

Circularity: This principle states that the companies should realize the

importance of recycling and the product sales economy should now become a

service lease economy. By doing this a product after being used by the consumers

will be returned to the company, recycled and used for making a new company.

Moreover a company should deal with its own wastes, should start making

products of the wastes after recycling processing and should also groom its human

and social capital by every mean.

When CSR 2.0 will be in place the companies will not work for the defense of their

reputation. Rather they will adopt CSR as a way of doing business. CSR 2.0 will become the

part of the operations of a business, performance appraisals, and the market incentive

systems. CSR indexes will move towards CSR rating systems (Like credit Rating) which will

be used to for decision making and the analysis.

In CSR 2.0, the new DNA of a business (as the writer names it) focuses on the new

interpretation of CSR as the "Corporate Sustainability and Responsibility". "Sustainability"

should be the ultimate objective of the new "CSR 2.0 businesses" and the "Responsibilities"

should be a roadmap to that sustainability. A Double-Helix Model is also presented in the

paper to gain a better understanding of this new interpretation of CSR.

Having said all that was mentioned in the paper, what should be the purpose of the business

now? Clearly it shouldn’t be making profit rather there should be the reorientation of the

business to make positive contributions to the society in a productive way. CSR should

become more of a way of doing the business now. A new responsible and sustainable

business model should be adopted by the companies that contributes in making the world a

better place and hence very easy by the means of conducting the business.