Corporate Social Responsibility And Triple Bottom Line Assessment 3 Answer
Corporate Social Responsibility is common in the present business context. According to Carroll's CSR pyramid, the four aspects of the CSR model include economic, legal, ethical, and philanthropic. Economical strategy means the company's liability to generate profit. Legal factors include company policies must adhere to rules and regulations of government. The ground of moral values and ethical considerations are mandatory for any organization. The company must do some philanthropy, work for a social cause, and environmental issues, it should give back to society (Bhasin, 2019).
Figure: Four responsibilities Caroll’s CSR Pyramid
Source: (Tutor2u, 2020)
In the USA CSR is seen as an additional resource for development, UK considers it under Corporate Governance. India is a country where CSR is mandatory in terms of the amount of investment and reporting. France, China Denmark, and South Africa are obliged to report about its expenditures in CSR policy to the government. Following CSR has a positive impact as it encourages innovation that leads to the productivity and sustainability of the company. It is not only a social cause but also gives a competitive advantage over rivals. In India, it is mandatory to spend 2% of the profit made in the previous three years on the social cause for every company with an annual turnover of 1000 crore or more (Thacker, 2019). Most of the developing countries follow CSR as a mandatory cause and keeping it mandatory gives advantages in terms of financial gain, brand positioning, and building trust with consumers and other stakeholders. Contributing to society and the environment has long-term benefits for shareholders in terms of financial gain. Making CSR mandatory helps in maintaining the laws and jurisdictions properly. If it is kept voluntary, the company may choose not to follow the environmental rules which will prove hazardous in the future. Corporate Social Responsibility is closely related to the Triple Bottom Line theory which works on assumption that corporations are part of society and it is their moral duty to contribute to society (Matteson & Metivier, 2020). The theory focuses on the sustainability of organizations that works o three principles: economic, social, and environmental sustainability. Economic sustainability focuses on the company's profit margins and strategies that are beneficial for the long term. Social responsibility is to work for the society and environment so that everyone can thrive. It is about seeing a bigger picture that believes in overall growth rather than the individual profit of any organization. It will allow the company to exist and creates good-will within the companies and the society where it belongs. Environmental sustainability is related to the degradation of the environment and hazards caused by non-biodegradable substances used by industries. The bottom line can be strong if the company can understand the limitation of the environment in terms of exhaustible components. Saving the environment is necessary for keeping it healthy and safe for future generations (Matteson & Metivier, 2020). The bottom lines are in alignment with the philanthropic aspect of CSR which beliefs in society and environment need to be treated carefully for sustainable growth.
2.0 CSR and the drivers for companies to have a CSR Program
Corporate Social Responsibility can be defined as the business model which enables the company to be responsible possible for its activities to itself, its clients, and its stakeholders. The model was popular in the business since 1950. But the modern definition of CSR is based on the ideas of the Archie's Carroll Pyramid. The CSR Carroll Pyramid is a model that discusses the reason and the way for which an organization needs to be responsible (Carroll, 2016). This explanation is based on four main pillars - Economic, Legal, Ethical, and Philanthropic responsibility. The foundation of the pyramid is the profit for which the organizations work and meet the desired goals. Likewise, CSR means corporate mannerism which will help in earning profit for the organization by working in compliance with the company's ethics and by contributing to society.
Figure 1: Carroll’s CSR Pyramid
Source: (Tools Hero, 2020)
Countries like Australia, Sweden, Netherlands, Denmark, France made the CSR mandatory reporting model (Panwar et al. 2018). Other countries still follow volunteer CSR methods. The difference between the voluntary and mandatory approaches are
Voluntary CSR reporting depends on the desire of the organization or the government while the mandatory form reveals that the organizations and government are bound to follow this concept and implement it in every operation.
The voluntary approach believes in supporting economic performance to enhance the market value by minimizing risks whole the mandatory approach believes that social or economic injustice corruptions can never be minimized by CSR legislation (Isaksson & Mitra, 2019).
The voluntary approach does not feel the need for government participation in CSR activities while the mandatory approach states the government as the most significant contributor to the CSR policies and programs
Voluntary CSR activities are conducted with much more clarity and fairness thena mandatory CSR as legislation complies with corruption (Dave, 2017).
The commitments and desires for voluntary CSR activity is greater than the imposed CSR activities in the mandatory approach
Another theory of company social responsibility is that the Triple Bottom Line. Just like the CSR theory Triple Bottom Line works on the idea that the corporation may be a member of the ethical community, and this offers it social responsibilities (Danzinger & Reichmann, 2019). This theory focuses on property, and needs that any company weigh its actions on 3 freelance scales: economic property, social property, and environmental property
The purpose which drives the companies for CSR reporting is it helps to provide the employee performance data in an organization. It helps to monitor and assess the supply chain activity of an organization and lastly, it provides the reports of sustainability funds.
3.0 CSR Programs
Support Volunteer Efforts
One of the most popular CSR programs is supporting the volunteer efforts of the employees of an organization. Employee volunteerism is a technique of corporate social responsibility that helps in cooperating by enhancing employee satisfaction and corporate image and relation with the stakeholders (Tyagi & Mallya, 2019). Recognition of the employee's work always works for the enhancement of the employee's motivation and commitment towards work. For any organization the employee satisfaction depends on various issues such as recognition of work, performance increment, and rewards, etc. but for charitable or volunteer work the employees do it with their wish and the company needs to encourage this effort as their effort enhances the organization's reputation. So the organizations need to give those employees importance may be in the form of some recognition or by providing flexible hours to them. The programs include donating money for the pandemic situation, building schools, facilitate the access to drinking water
Philanthropy in CSR is utilizing the company's resources for the welfare of the people and the community. This aspect reveals the organizational social responsibility being a major contributor to society. Organizations also have commitments towards the society and for that purpose, the organization can use its available resources for any welfare work (Meyers & Weaver, 2018). These programs will include the donation of money or books to the poor children, funding a charitable organization, organize free medical camps for the community people, etc. the philanthropic aspect may not provide an organization with monetary profit but it heightens the reputation of the organization.
Another aspect on which an organization focuses is on maintaining the ecological balance of the environment. For this purpose, the organization is committed to enhancing the ecology of the region through their work. It also includes that no projects of the organization will be executed in a way that will disturb or harm the ecological balance in any aspect. This is because every organization is aware that environmental factors are significant for the economic stability of the organizations (Fordham et al. 2018). Most organizations depend on natural resources for their raw materials. Some of the important CSR programs for this aspect are reduction of the energy consumption, investments in renewable materials, encouraging and motivating employees for working, and promoting waste management.
Most of the organizations in today's business world want to globalize the business by encouraging diversified culture within the workplace. Diversity in the context of the corporate world means equal opportunity and representation of the human resource in the workplace irrespective of their caste, age, culture, etc. through diversification the organization not only unifying the diverse background people under a particular workplace but also including them as a contributor of the organization equally (Zutshi et al. 2020). This inclusion creates a sense of belongingness and togetherness within the organization. By achieving so the company is justifying its CSR by enhancing the community and its people relating to employment and quality of life. Programs such as encouraging women leadership in an organization etc.
4.0 FCM Travel Solutions
FCM is considered as an award-winning global travel company, part of Flight Centre Travel Group based in Australia. It is now operating in 95 countries providing innovative and customized services by maintaining customer safety and security. It is the only organization in the travel and tourism business that works globally and is ready to provide 24X7 service to people across the globe. The company walks in the path of sustainable development and following CSR policy that is beneficial to shareholders and stakeholders like employees, consumers, suppliers, and distributors. The company channelizes its efforts by contributing to the society and environment in several ways. The company has an organization called FCM care initiatives that supports community around the globe. It believes in sustainability by taking responsibility for the environment. It supports the environmental cause at local levels by planting trees and launching carbon emission programs. Supporting young entrepreneurs is also included in the company's project and it gives funds to institutions, corporate awards, and educational programs. Strong environmental practices are followed by the organization in urban and local environments. The company believes in long-term benefits by contributing to society which will impact the consumers and the employee's shareholders who are all part of the society. Working for a cause will help in brand image creation and increase the profit margins that will be beneficial for shareholders (FCM Travel, 2020).
The Flight Centre Foundations work for an initiative to bring a brighter future for those in need. The FCM travel is empowered to give back to its society by following the path of social equality, environment, and wildlife protection and making an economic contribution in a place where they live, work, or travel. Several donation schemes have been organized by the bright center foundation since 2008 which includes Bush Heritage, Cambodian Children's trust, Foodbank, and YoungCare (FCM Travel, 2020). The organization gained huge benefits as it promoted the impoverished of society and helped the employees in providing a better future. The paid staff program encouraged the staff in volunteering a charitable program which earned them some profit. It is due to its environmental consciousness it achieved awards of global excellence and gained a reputation all over the world. Organizing a program involving the employees was never an easy job. It required a lot of effort and financial investment was also a huge factor in this issue. But the company has followed the path of social responsibility which gives it higher points in the triple bottom line strategy. All these efforts are in alignment with the Triple bottom line of social responsibility, working towards environmental sustainability and economic sustainability.
Due to the covid-19 pandemic, travel and hospitality organizations need to put extra effort into ensuring the safety of customers in terms of proper hygiene, sanitization facilities, and restrictions to travel rules laid down by some countries. The various approaches that need to be taken include valuable insights regarding the situation from eminent personals, having relevant information about the customers traveling with them, and also the condition of their employees. Previously, FCM followed the approach of leisure that is business with leisure. Post the pandemic, it is necessary to consider the necessity of any travel and restrict traveling twice to any destination for reducing health risks in employees. The employees will now be working from home which may bring fatigue and emotional stress. For encouraging them various measures can be taken. Some countries and cities are restricting visits and the company should align its travel schedule accordingly. Pre-booking confirmations must be subject to policies and laws of the country. Ensuring hygienic and sanitized travel is mandatory for fighting the pandemic and survive in this situation of new normal (FCM Travel, 2020b).
5.0 The role of the Australian government
Being the highest administrative authority the Government of Australia is also committed to contributing to different CSR programs held in the country. The first and foremost role of the government is to frame policy according to which the CSR programs in the country are conducted. The policy not only includes the ways and considerations that will be required to organize a CSR program but also the laws which reflect the responsibility of the organization for the promotion of CSR. Secondly, the government provides subsidies and funds for organizing and promoting such programs (Transparent Hands, 2017). These funds are donated to charitable trusts or the social institutions for accomplishing a specific social responsibility through programs like free health camps, tree plantation programs, etc. Thirdly the government plays an important role in the promotion of these CSR programs by investing and engaging the local electronic media and social networking sites. The government for this purpose also helps the organizations or corporate sectors working in the country in promoting its CSR programs so that more and more people get the benefit and the awareness messages through the programs reach every part of the country. The government to promote CSR programs needs to focus on those sectors which work and connect with a large number of people like the corporate sectors including the manufacturing, tourism, hospitality and educational sector (Loosemore & Lim, 2017).
The nature of the CSR program and the definition of CSR pre and post Covid19 situations have changed a lot. The pandemic situation has fostered the organization to not only contribute towards society and its people but also working for the physical and mental wellbeing of the employees and other people associated with the organizations. Pre Covid19 situation demands maintenance of ecological balance, charitable works through funding, and providing goods and services. While post Covid19 has led the organization to be in a testing position relating to CSR, focus on uplifting the people’s physical and mental condition for overcoming this situation (Kramer, 2020). The economic crisis has made it necessary for the governments and the finance organizations to assist the small enterprises to recover by finding them. The government also needs to contribute to providing healthcare facilities to all the people of the country. Awareness programs are now becoming an important agenda of all the organizations for minimizing the victim rate and enhancing the health situations of the society.
Corporate Social Responsibility is beneficial in providing a competitive edge and a good reputation for the organization. Making it mandatory or voluntary is still a topic for the argument. FCM Travel solutions believe in giving back to society and working towards the betterment of the community where it works and travels. The measures taken by the company in the Covid-19 pandemic are related to its entitlement towards the benefits of the society including its consumers and employees. The company has brought fame and recognition from various sectors which speak about its success story. It can be concluded that CSR policy has proved beneficial in the growth of business and also survive in the pandemic situation.