Challenges
of
Corporate Social Responsibility
Dr. Elijah Ezendu
FIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,
PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr

Learning Objectives
At the end of this course, participants should be
able to do the following:
Identify the relevance of CSR
Ascertain the right model of CSR for a firm
Develop effective implementation path for CSR
Resolve the challenges of CSR Initiatives and
craft appropriate CSR strategy

What is CSR?
“Corporate Social Responsibility is a concept
whereby companies integrate social and
environmental concerns in their business
operations and in their interactions with their
stakeholders on a voluntary basis”
Source: European Commission

“Corporate Social Responsibility is the continuing
commitment by business to behave ethically
and contribute to economic development
while improving the quality of life of the
workforce and their families as well as of the
local community and society at large”
Source: World Business Council for Sustainable Development

“Social responsibility (is the) responsibility of an
organisation for the impacts of its decisions and
activities on society and the environment
through transparent and ethical behaviour that is
consistent with sustainable development and the
welfare of society; takes into account the
expectations of stakeholders; is in compliance
with applicable law and consistent with
international norms of behaviour; and is
integrated throughout the organisation.”
Source: ISO 26000 Working Group on Social Responsibility

Freidman Versus Russell
Milton Friedman indicated that the one and only one
social responsibility of a business is to use its
resources and engage in activities designed to
increase its profits, as long as it stays with the rules
of the game, which is to say, engages in open and
free competition without deception or fraud.
Kirk Russell insisted that every right is married to a
duty, every freedom owns a corresponding
responsibility. Hence, there cannot be genuine
freedom unless there exists also genuine order in the
moral realm and in the social realm.

CSR is about building Trust
• Trust in the brand
• Trust in performance of the product
• Trust in the company to “do the right thing”
• Trust in you as an employer
Source: Carrie Johnson, Corporate Social Responsibility

Major Elements of CSR

Dimensions of CSR
• Internal Dimension: This focuses on
organisational practices with respect to
internal stakeholders that should be aligned
to corporate social responsibility standards.
• External Dimension: This focuses on an
organisations practices towards external
stakeholders which should be in accordance
with international standards of business
practices.

Internal Dimension

External Dimension

“There is no way to avoid paying serious attention to
corporate citizenship: The costs of failing are simply
too high…There are countless win-win opportunities
waiting to be discovered: Every activity in a firm’s
value chain overlaps in some way with social factors
– everything from how you buy or procure to how
you do your research – yet very few companies have
thought about this. The goal is to leverage your
company’s unique capabilities in supporting social
causes, and improve your competitive context at the
same time. The job of today’s leaders is to stop being
defensive and start thinking systematically about
corporate responsibility.”
- Michael Porter, Professor, Harvard Business School

Corporate Responsibilities

Four Phases of CSR
• Corporate Social Stewardship (1950s – 1960s)
• Corporate Social Responsiveness (1960s – 1970s)
• Corporate/ Business Ethics (1980s – 1990s)
• Corporate/ Global Citizenship (1990s – 2000s)

Models of CSR
Position Responsible to Action
Minimalist
(Premodern)
Stockholders/Owners Maximizes Profit
Self-Interested
(Premodern)
Stockholders/Owners
/Cost controllers
Focus on services that
enhance profit and
corporate growth
Social Contract
(Modern)
Entities with social
and legal contract
Commitment to social
services
Stakeholder
Management
(Postmodern)
Entities that influence
direction and fortune
Deployment of
responsive strategies
Stakeholder
Stewardship
(Postmodern)
The whole society Solutions for social
problems

Features of Minimalist CSR Model
• Premises
- Shareholders dominance
- Legal bond
• Critique
- Every other model disturb profit
- Other models are socialist

Features of Self-Interested CSR Model
• Premises
- promote philanthropy
- reputation
• Critique
- Minimalist is too rigid

Features of Social Contract CSR Model
• Premise
- Power and responsibility are always together
- Organisation is a moral entity
- Existence of contract with society
• Critique
- Minimalist and Self-Interested are focused
on profit

Features of Stakeholder
Management CSR Model
• Premise
- Focuses on primary and secondary
stakeholder groups
• Critique
- The social contract model is too vague

Stakeholder Groups

Features of Stakeholder Stewardship
CSR Model
• Premise
- Concerned about tertiary stakeholders
- Focuses on high ideals
- Provide for non- beneficiary entities
- Cleave to trust
• Critique
- Stakeholder management model is not very
ambitious

Issues of Trust and Change in Models of CSR
Model Participants Change Issues Trust
Minimalist Investors/Stockholders,
Owners/managers
Hyper competition,
globalisation
Growth of trust depends
on extent of performance
compared to expectation
Self Interested Program advocates,
owners/managers
Competition, upgrading of
reputation
Growth of trust depends
on extent of projected
corporate reputation
Social Contract Owners/managers, Entities
that engage in contract
with firm
Flexibility,
internationalization
Growth of trust depends
on how well the legal and
social contracts are
sustained
Stakeholder Management Primary and Secondary
Stakeholders,
Owners/managers
Information management,
public inquest
Growth of trust depends
on level of inclusiveness in
decision-making processes
Stakeholder Stewardship Representatives of tertiary
stakeholders,
owners/managers
Demands for tertiary
stakeholders,
environmental activism
Growth of trust depends
on success of negotiated
agreements between the
corporation and
representatives of tertiary
stakeholders

Factors that Promote CSR
Globalization
Advances in Communication
Sustainable development
Governance
Leadership
Competitive Advantage
Consumerism
Advocacy
Ethical Culture

CSR versus Law
Organisations tend to choose between legal
compliance mentality and ethical compliance
mentality.
Legal compliance mentality focuses on observance of
laws pertaining to health and safety, environmental
protection, bribery and corruption, taxation,
consumers, corporate governance, workers and
human rights.
Ethical Compliance mentality directs proactive activities
towards furthering sustainable development and CSR
engineered innovation while acting in pursuit of
business excellence

CSR Implementation Framework
What? (Task Delineation) How? (Checkpoints on the journey)
1. Conduct a CSR assessment • Assemble a CSR team
• Develop a working definition of CSR
• Identify legal requirements
• Review corporate documents, processes and activities, and internal capacity
• Identify and engage key stakeholders
2. Develop a CSR strategy • Build support with CEO, senior management and employees
• Research what others are doing, and assess the value of recognized CSR instruments
• Prepare a matrix of proposed CSR actions
• Develop ideas for proceeding and the business case for them
• Decide on direction, approach, boundaries and focus areas
3. Develop CSR commitments • Do a scan of CSR commitments
• Hold discussions with major stakeholders
• Create a working group to develop the commitments
• Prepare a preliminary draft
• Consult with affected stakeholders
4. Implement CSR commitments • Develop an integrated CSR decision-making structure
• Prepare and implement a CSR business plan
• Set measurable targets and identify performance measures
• Design and conduct CSR training
• Establish mechanisms for addressing problematic behaviour
• Create internal and external communication plans
• Make commitments public
5. Assure and report on progress • Measure and assure performance
• Engage stakeholders
• Report on performance, internally and externally
6. Evaluate and improve • Evaluate performance
• Identify opportunities for improvement
• Engage stakeholders
Source: Paul Hohnen, Corporate Social Responsibility, An Implementation Guide
Plan
Do
Check
Improve

CSR Strategy
This is a firm’s road map for accomplishing its
obligations in corporate social responsibilities
and should consider factors such as
stakeholder interests, competitors’ CSR
inclinations, priority areas, acceptable
approach and process for ascertainment of
performance.

Common Mistakes in CSR
• Lack of vision
• Scale of change
• Sub-strategic management
• Risk/opportunity roles
• Selective hearing
• Maintaining old structures
• “One World” approaches
• Uneven approaches
• Non-participative management
• Failure to see CSR as innovation
Source: Anders & Winst Company

Factors to Consider in
business case for CSR
• Areas in which a company can build competitive advantage
• Short and Long term goals
• Benefits
• Higher cost efficiency for organisational activities
• Risk of each opportunity
• Influence of stakeholders
• Areas of great gain
• Cost of implementation
• Implications of programme

“We believe that the leading global companies
of 2020 will be those that provide goods and
services and reach new customers in ways
that address the world’s major challenges –
including poverty, climate change, resource
depletion, globalization, and demographic
shifts.”
- Niall Fitzgerald, Former CEO & Chairman, Unilever

International CSR Initiatives
Posing Challenges to Firms
• United Nations Global Compact
• World Summit on Sustainable Development
• OECD Guidelines on Multinational Enterprises
• ISO 26000
• ISO 9001
• ISO 14001
• OHSAS 18001
• OECD Principles of Corporate Governance
• Social Accountability 8000
• Global Reporting Initiative
• World Business Council for Sustainable Development
• Environmental and Social Standards of International Finance Corporation
• International Labour Standards of International Labour Organisation
• Equator Principles
• Principles for Responsible Investment
• United Nations Human Rights Instruments
• Transparency International Business Principles
• Voluntary Principles on Security and Human Rights

Ghana Business Code
It’s a private sector led initiative developed in
collaboration with a development partner for
implementation of UN Global Compact
Principles. In the course of aligning the 10
Principles of UNGC to local standards in
Ghana, a new product containing 55 point
prescriptions was established as Ghana
Business Code.

Examples of Ethical Compliance to
Challenges of CSR
• Jebsen & Jessen stopped producing chainsaws in
order to stop contributing to deforestation.
• Toyota’s commitment to champion zero emission by
producing Prius hybrid petrol/electric model.

Exercise
The high level of advocacy for corporate social
responsibility influenced Maris & Patty to
consider development of CSR strategy. The
firm manufactures batteries with various
chemicals that contribute to environmental
hazards within its host community. What shall
be your recommendation appertaining to its
CSR strategy, implementation and focus.

Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise
in Interim Management, Strategy, Competitive Intelligence, Transformation, Restructuring, Turnaround
Management, Business Development, Marketing, Project & Cost Management, Leadership, HR, CSR, e-
Business & Software Architecture. He had functioned as Founder, Initiative for Sustainable Business
Equity; Chairman of Board, Charisma Broadcast Film Academy; Group Chief Operating Officer, Idova
Group; CEO, Rubiini (UAE); Special Advisor, RTEAN; Director, MMNA Investments; Chair, Int’l Board of
GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training),
Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management
Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead
Consultant/ Partner, JK Michaels; Turnaround Project Director, Consolidated Business Holdings Limited;
Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles),
Fortuna, Gambia & Malta; Chief Advisor/ Partner, D & E; Vice Chairman of Board, Refined Shipping;
Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria;
Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic
Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria;
Country Manager (Nigeria) & Adjunct Faculty (MBA Programme), Regent Business School, South Africa;
Adjunct Faculty (MBA Programme), Ladoke Akintola University of Technology; Editor-in-Chief, Cost
Management Journal; Council Member, Institute of Internal Auditors of Nigeria; Member, Board of
Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business
Administration and Fellow of Professional Institutes in North America, UK & Nigeria. He is Innovator of
Corporate Investment Structure Based on Financials and Intangibles, for valuation highlighting
intangible contributions of host communities and ecological environment: A model celebrated globally
as remedy for unmitigated depreciation of ecological capital and developmental deprivation of host
communities. He had served as Examiner to Professional Institutes and Universities. He had been a
member of Guild of Soundtrack Producers of Nigeria. He's an author and extensively featured speaker.

Thank You