CHAPTER 20

Why CSR and Ethics are Important for a Company

CHAPTER OBJECTIVES

After studying this chapter, you should be able to:

1. Realize that employee motivation depends upon whether they perceive their organization as making a positive contribution to Dharma.
2. See that people who are closer to the common soul tend to be more comfortable in ethical organizations. The organizations in turn excel.

The Company Footprint and CSR

Corporate social responsibility (CSR) is considered an important component of the activities of a company. But CSR is generally made out to be a kind of compensation that a company is encouraged to offer to the society that it deals with, so that there is a wellness factor that comes into play in dealing with these outsiders. For example, people around an industrial plant would be happy that some benefits come to them from it after all. Or when a company takes up altruistic efforts in a society, the brand value is increased and that wellness factor makes for ease in operations in that society … . Still others do it purely for advertisement value—some social event in which a company participated gets highlighted in society and so the product of the company becomes more visible and the chances that people will buy it therefore increases. To an extent all these benefits do accrue when taking on CSR; but this does not completely explain the need for CSR, in fact these reason miss out the heart of the matter … .

A company finally leaves a ‘footprint’ on society and the totality of that footprint matters. There are both positive and negative aspects to it. Consider the positives … . At the very basic level the investor and promoter is keen on starting this process so that profits can be had from its operations. Workersget their salaries. Consumers purchase something that satisfies their needs/wants. At the next level, statesmen see economic activity in it and that it will give work to citizens and revenue to the government. Revenue to the government is a valuable resource for its own sustenance and for the protection of citizens. At a still higher level the far sighted visionaries look at the fact that the company is participating in raising the levels of prosperity for a nation, making it easier for a larger number of humans to be unburdened and to be able to live longer, healthier and in greater comfort … .

But then this will also be pitted against the fact that the company may be leaving behind a negative footprint, which may include damage to the environment, corrupting of the political process, damaging the health of workers/consumers in some way, creating imbalances in society, distasteful advertising that can adversely impact value systems in society, creating exploitative relationships amongst people and such other.

When seen in its totality, both the positives and the negatives, must balance out and the net contribution to society must be positive and only then we can say that the company or institution has legitimacy to exist in a ‘dharma’. Else it is a part of an exploitative process and the wise would rather have it discouraged or dispensed with … .

CSR efforts come as a boon. They help the company enhance the positive factor in the company’s ‘foot print’. Ultimately, the wise who seek wellness are none other than the stake holders in that company; the employees especially, and everyone else associated with the company. When within themselves they feel that they are indeed part of a process that is doing overall good to the society then there is contentment; positivity flows. One’s work for that organization fits into a ‘dharmic’ scheme and therefore there is a natural tendency for the employees to excel. One’s life seems fulfilled working for a process of that kind and there is pride in it. Chances are greater that the environment within that company is conducive for positive relationships, while negativity becomes the aberration.

And in such a situation, a company has almost everything on its side; with its stake holders (workmen specially) revelling in dharma, certain attributes come to that company naturally and these include greater flexibility, better creativity, high risk taking ability, greater efficiency, minimal friction and solution orientation (rather than problem orientation) … It can be a successful animal in the economic world as a consequence of this.

To think that CSR is a toffee to pacify kids then it is a very limited way to look at it. It rather caters to denoting a team as a fruitful part of humanity. It makes a team feel proud to be together, doing good work for humanity—for the supreme self.

Ethics

A similar argument also flows into the need for upholding ethics in an organization …

True that it is hard to list out behaviours as being ethical and unethical in absolute terms, for it is the context of a situation which will truly say whether an action is ethical or not. But even so, one can decisively say that all of ethics is about being in tune with one’s highest nature. Ethical individuals and ethical companies find themselves at great resonance with the supreme self. And as we have seen, the by-product is excellence.

Those who are ethical target a higher level of existence—higher in the sense, where there is greater calmness, peace, work, excellence, joy, fun…. These are considered as merits that come from being tuned with the ‘common self’. Now, when a company takes up a policy to uphold ethics, the ethical people become comfortable in it. The company therefore, by choosing to be ethical, lays down a foundation which has great scope for breeding excellence. One can expect the work experience in that organization to be home-like and satisfying. The work space can become a passion rather than a chore.

In fact, one wonders whether it is ever possible to set up great organizations on the foundations of bad ethics … . Technically speaking, such formations are naturally weak and best avoided. They may flash but are unlikely to endure … .

It is faulty to presume that ethics is merely about having honest people in the organization and therefore they will do minimum damage to and do minimum thieving from the organization … ethics is about laying the foundations for a celebration of life which is to be nurtured in the organization.

The organization must be made conducive to dharma and excellence and ethics is an integral part of this. In this triad of ethics, dharma and excellence, the organizations prosper.

Case Studies

1. Take the cases of companies in the various industries that are doing extremely well. Study the foot print factor and the ethical factor and assess their contribution to the industry’s success.
2. Take cases of long sustaining companies; study their footprint factor and their company ethics.
3. Take vision/mission statements of the founders of important companies; check how they have attempted to try and balance out the positives and negatives in the footprint. Also check their emphasis on principles and ethics.
4. Take cases where under the banner of ethical behaviour things are done which contradict the aspirations rising from the Common Soul and study the consequences.

Exercises

1. Pick up a company of your choice and make a list of all the elements that go into creating its footprint and discuss each in one or two lines. On what basis/criterion would you choose to decide whether the final foot print is positive or negative? (1000 words)
2. Discussion/debate: Ethical companies are losers.
3. Analysis: Pick up a company/enterprise (Real) in which you feel the morale is low. Write a letter to the CEO/owner recommending changes in respect of CSR and/or ethics policies so as to affect a turnaround. (1500 words)