“He also stressed that CSR was dependent on companies’ management and warned against implementing programmes with expectations of gain” (Small Firms Should Engage Society, Mr. David Lim).
Corporate social responsibility (CSR) has been gaining increased prominence and importance throughout the local private sector; hence, the report “Small Firms Should Engage Society” (December 16, 2010) by Mr. David Lim makes the salient point that small and medium enterprises (SME) have the ability and potential to engage in CSR activities. Beyond the traditional approaches of charity and philanthropy – usually in the form of ad-hoc initiatives or lump sum monetary donations – CSR presents a win-win formula, allowing the company and its employees to grow and reap an assortment of benefits in tandem with the beneficiaries.
The traditional concept that a firm’s aim is merely profit maximisation is going out of fashion; with a plethora of evolving environmental and societal challenges, CSR has emerged as a viable methodology to balance private and public interests. In terms of indirect business advantages, CSR can help tremendously in terms of brand differentiation, company and product awareness, overall risk management in publicity or public relations et cetera. Besides the “profits” made by the companies, the voluntary organisations directly gain from the increased amount of finances and resources channelled for its programmes and beneficiaries; and the various services or awareness campaigns undertaken – in the form of advertisements or being heard in the media – could have significant ripple effects for these agencies and their responsibilities.
It is a tall order to expect small companies to indulge in social programmes or CSR without entirely considering personal benefits or takeaways. Instead of regarding these mindsets as being hypocritical or insincere, one should view the process as being an active collaboration; one in which both sides gain in different ways. In the long-term, the firm will gain increased eminence and distinction; whilst the voluntary or non-governmental organisations expand their endeavours and services to their beneficiaries.
Nonetheless, the administration should be cognisant that CSR is a considerably specialised field, and therefore requires certain levels of expertise and experience before implementation. These aspects are often lacking in SMEs, given their infancy and lack of exposure to these concepts. More can be done on the part of the government to increase interactions between these firms and experienced multi-national corporations (MNC), especially since the latter has developed specific departments and personnel to handle the aforementioned. Larger firms can be part of the process, as sharing of CSR insights can be facilitated through business ethic conventions, or even through the Internet.
CSR has – and will continue to – become an important component in decision-making processes around the world. Apathy and lethargy towards it may prove to be detrimental in time to come.
A version of this article was published in My Paper.