CSR and CSI

Business Paper 2

Meaning of CSR (5)

• CSR refers to the way the business manages its processes to affect stakeholders positively

• It is the continuing commitment to behaving ethically and contributing to the economy, while improving the quality of life of the community and society at large

• It refers to the way businesses conduct their operations regarding human and physical assets, and their funds

• It is when the business voluntarily takes steps to improve the quality of life of its employees, their families and communities

• Corporate Social Responsibility is an obligation by law that benefits both the business and society

Purpose of CSR (5)

• CSR can take the form of monetary donations to support local organisations

• CSR aims at creating a safe working environment for employees

• CSR includes internal programmes used by the business to comply with laws and ethics

• The business addresses the Triple bottom line by considering its impact on profit, people and planet

• Businesses seek to promote public interest and get rid of harmful practices without the need for any formal legislation

Components of the CSR (9)

“Every Clever Hustler Can Build Empires Selling Excellent Croissants”

• Environment

• Ethical corporate social investment

• Health and safety

• Corporate governance

• Business ethics

• Employment equity

• Supply chain/ Distribution channel

• Employees and customers

• Community

Advantages of CSR/CSI on businesses (5)

• Promotes customer loyalty, resulting in more sales

• CSR/CSI projects may promote teamwork within the business

• The business enjoys the support of communities

• Attracts more investors due to increased profits

• Improves employees’ health through focused CSR/CSI projects

Disadvantages of CSR/CSI on businesses (5)

• It is difficult to accurately measure the effectiveness of social investment

• Managers may not be trained or lack experience to handle social programmes

• Businesses find it difficult to adhere to legislation governing CSR/CSI

• Businesses are expected to draw up detailed reports, which may be time-consuming

• CSR/CSI activities may distract businesses from their core business operations

Advantages of CSR/CSI in communities (5)

• The provision of bursaries increases the level of education and allows the community to apply for jobs

• Better educational facilities are provided in poorer areas

• The provision of medical infrastructure can improve the health of the community

• Socio-economic issues are tended to, improving the social welfare of the community

• Training opportunities can increase the possibility of more appointments of community members

Disadvantages of CSR/CSI in communities (5)

• Less money is available for community projects during unfavourable economic conditions

• Businesses tend to focus on CSR/CSI projects that do not benefit the community

• Businesses may not be equipped to address social problems

• Some businesses participate in CSR/CSI programmes to increase profits and do not really care about the community in which they operate

• Communities tend to be come dependent on CSR programmes and struggle to take their own initiatives

Meaning of CSI (4)

• It is when a business contributes time, money and resources to a specific project that will improve people’s lives

• The project is not directly for purposes of increasing company profits

• It is the money the business spends on the community to improve the standard of living in the community

• It has a strong developmental approach and utilises company resources to uplift and benefit communities

Purpose of CSI (5)

• CSI aims at contributing towards the sustainable development of its immediate communities

• CSI is enforceable by law and government requires business to make CSI contributions

• CSI projects have a positive impact on the development of the community 

• CSI projects reveal the attitude of the business towards the community in which it operates

• CSI projects are long-term investments

CSI Focus Areas (4)

“Caring Really Empowers Earth”

• Community

• Rural development

• Employees

• Environment 

Examples of CSI projects (6)

• Donations to support local organisations

• Being involved in conversation projects 

• Investing in job creation projects

• Providing adult basic education 

• Teaching entrepreneurship skills

• Sponsoring arts and culture programmes
  

CSR vs CSI

• CSR: Intention is to change business practices CSI: Actively committing money and resources to uplift the community 

• CSR: Focus is on increasing image and profits CSI: Focus is on the upliftment of the community without a return on investment

• CSR: Often intended as a marketing initiative CSI: Intended to benefit and uplift communities through social development