Strategic CSR for companies of all sizes

Is strategic CSR just a possibility for big companies with big budgets? 

In the past, corporate social responsibility (CSR) was thought to only be within reach of large companies, but more and more studies are researching the social responsibility stance taken on by other types of companies, such as small and medium-sized enterprises (SMEs), public institutions and not-for-profit organisations.

Despite the belief that CSR is only effective for big companies with big budgets, the reality is that a well-defined CSR strategy can be incredibly effective even for small and medium-sized companies in helping them achieve specific business goals, and also for society as a whole, as revealed by this analysis. 

Read on to find out how to apply strategic CSR to your organisation, regardless of its size. 

Strategic CSR: Aligning CSR with business strategy

A CSR strategy involves taking a holistic approach to CSR in a company’s strategic planning and central operations in order for it to tend to the needs of a wide range of stakeholders and achieve maximum economic and social value over the medium and long term.

Strategic CSR does not mean corporate philanthropy. Instead, it is a series of initiatives and actions that helps provide organisations with bountiful opportunities to learn from the projects in which they are investing and then use this new-found knowledge to build up the company’s basic competencies, while also improving social and environmental conditions. 

This allows CSR activities to create a pathway for learning and innovation within organisations, in addition to offering benefits for society and the environment. 

Strategic CSR activities create value for stakeholders and bolster the company’s business and social performance, which contributes to creating a sustainable society in the long run.

What is CSR in strategic management?

Integrating CSR into strategic management involves considering the social and environmental implications of the company’s strategic decisions, in addition to its contribution to social and environmental wellness. This isn’t just important for improving the company’s image and reputation, but it also ensures its long-term sustainability.

One way of integrating CSR into strategic management is through adopting the social management philosophy. This entails viewing CSR as not just an ethical issue, but also as an opportunity to create value for the company and for society. 

Social management is based on the idea that a company can maximise its long-term economic value at the same time as it improves social and environmental well-being. It also requires identifying and managing the company’s social and environmental impacts all along the value chain, from buying raw materials to waste disposal.

In order to incorporate CSR in strategic management, identifying the company’s key processes and ascertaining how CSR can improve these processes is vital. 

For example, integrating CSR into the supply chain can enhance product quality and reduce costs while also reducing its environmental impact. Similarly, integrating CSR into human resource management can improve employee retention and motivation, which in turn boosts productivity and profitability.

Another way of adding CSR to strategic management is through stakeholder theory. This theory states that companies not just have a responsibility towards their shareholders, but also to other stakeholders, such as their employees, clients, suppliers and society as a whole. 

Stakeholder theory calls for companies to consider the impact that their strategic decisions have on all these different stakeholders and strike a balance between their needs and expectations.

Finally, in order to incorporate CSR in your company’s strategic management, you will need to foster a business culture that values sustainability and social responsibility. This means: 

• Setting clear goals and targets. 
• Developing systems for monitoring and assessment. 
• Promoting collaboration and dialogue with different stakeholders.
  

Successfully including CSR in your company’s strategic management can help it improve its reputation, reduce risks, increase innovation and boost its long-term profitability.

Strategic CSR based on company size

The goal of CSR is to find a balance between the company’s financial success and the well-being of society and the environment. As it has continued to blossom into a common business practice, companies of all different sizes have begun to adopt a range of CSR strategies.

In particular, CSR strategies vary based on the size of the company. Below we’ll analyse specific CSR strategies for three different types of company: SMEs, large companies and corporations.

CSR in SMEs

Small and medium-sized enterprises (SMEs) are usually limited in terms of the resources they can dedicate to CSR. However, this doesn’t mean that they can’t implement effective practices. 

For SMEs, CSR needs to form part of their overall business strategy, focusing on areas in which the company can make the biggest difference. 

SMEs often opt for strategies that aim to improve the working conditions of their employees, reduce their environmental impact, launch local initiatives or reduce their carbon footprint in their immediate surroundings. 

It is imperative to remember that the strategy must be aligned with the company’s vision, mission and values.

Another thing to take into consideration when devising a CSR strategy for SMEs is employee involvement: since these types of companies are small, employees must be involved in a more direct and effective manner, which can result in greater commitment to the company’s CSR objectives.

What’s more, they can collaborate with other SMEs to maximise their impact by putting into action joint CSR practices and sharing resources and knowledge.

CSR in large companies

Large companies have a lot more resources that they can allocate to CSR, allowing them to implement broader, more sophisticated practices that involve the entire supply chain.

In addition, large companies often roll out more ambitious and wider-ranging CSR initiatives through collaborations with both non-governmental and governmental organisations. 

These types of companies also tend to publish information on their CSR practices and their achievements, which frequently takes the form of a sustainability report.

CSR in corporations

Corporations boast even more resources than large companies do and, as a result, they can carry out CSR practices that are even more ambitious and wide-ranging. 

They usually have a structured CSR strategy that covers all aspects of the business and focuses on initiatives that may have a large-scale impact. 

Furthermore, corporations habitually work with a variety of stakeholders, from non-governmental organisations to local communities and governments, in order to implement these extravagant CSR initiatives. 

They also publicly release information about their CSR initiatives and their achievements in a sustainability report, while they often have a dedicated CSR team in-house.

How to create a strategic CSR plan

For companies that are looking to survive and prosper in the long term, CSR has become a strategic must and, as a consequence, they have to prepare strategic plans in order to guarantee the effectiveness of their CSR initiatives.

Let’s take a look at the steps we need to follow when creating a strategic CSR plan:

1. Evaluating the current outlook: Before setting out on creating a CSR strategic plan, we first need to review our current CSR policies, work practices, environmental impact, and relationships with suppliers and local communities, among other aspects. It’s important to remember that this evaluation needs to be honest and comprehensive to be able to identify the areas that must be improved.

2. Identifying CSR goals: These goals should be specific, measurable, achievable, relevant and time-bound. Therefore, we need to set realistic objectives that we can reach in a reasonable time frame.

3. Identifying stakeholders: Companies must identify and prioritise relevant stakeholders, such as their employees, clients, suppliers, shareholders, the local community, etc. Each group may have a distinct set of needs and, as such, we will have to handle them differently.

4. Developing CSR strategies: When it comes to developing strategies to help us achieve the goals we’ve set ourselves, we can start by implementing fair working practices, reducing our environmental impact, supporting local communities and promoting diversity and inclusion within the company.

5. Implementing and monitoring: Once we’ve developed our CSR strategies, it is vital that we implement them and monitor their success. By establishing metrics that measure success and regularly monitoring them, we can make sure that we are on the right track.

If you need to measure your metrics in order to maximise your CSR strategy, APLANET’s software can help you. If you would like more information, click here.

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