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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 theirshareholders 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

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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.

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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.

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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 longperiod 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

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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 societyand 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

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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, butlarger 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

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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 organizations 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,

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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

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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 masters 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

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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 Banks 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), McDonalds

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

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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 anopportunity 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

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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

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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**

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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

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"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 legalrequirements 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

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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 incorporateexternalities 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 takenas 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

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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).

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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

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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).