Defining corporate social responsibility

Personal Money: Defining corporate social responsibility
06 May 2006 New Straits Times
Intan Maizura
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Corporate social responsibility? It’s a definite mouthful. But what exactly is it? APCO Worldwide's senior vice-president, Nancy Murphy, explains.

Murphy’s task is to help bridge the private and public sector

Do companies who are making bucket loads of money necessarily owe society something? This, it seems, is a most pertinent question especially when you are talking about corporate social responsibility or CSR.


But what exactly is CSR to begin with? According to American Nancy Murphy, the senior vice-president of APCO Worldwide, a global communication consultancy specialising in building relationships with an organisation’s key stakeholders, trying to give a standard definition for CSR is no easy feat.

Says the amiable Murphy, at APCO, they describe CSR as HOW companies make their profit,"… i.e. the way they engage with communities, the way they treat their employees, the way they manage their impact on the environment, and the way they interact with governments."

She continues: "Some people would define it more narrowly, for example, they might think only about the community part of the impact, or the volunteerism part or the partnerships they have with NGOs. They might not include components like the environment, human rights or labour rights or even how they influence government from lobbying or how they govern their own company."

It seems in Europe, companies are more inclined towards the environmental aspect of it, while in Asia, particularly China, it’s the community.

I ask the 38-year-old, Ohio-born Murphy whether there has actually been a forerunner for CSR. Would it have been something like corporate citizenship or perhaps community service?

She nods: "A lot of people will use the term corporate citizenship to mean the same thing. Other places call it sustainability because if you want your company to thrive over the long term and to be successful, you really can’t deplete the natural resources, you can’t treat your employees poorly, you can’t not enable the communities around you to be successful."

According to Murphy, the term corporate social responsibility has also been shortened somewhat. "We’ve taken the word ‘Social’ out of the whole thing as some people might interpret that too narrowly and subsequently not see the environmental aspect in it.

In the US, the term now is much more corporate responsibility. In China, they say community investment or community engagement while in Europe, sustainability is a very common concept."

But what’s all the brouhaha about, I ask Murphy, playing the devil’s advocate. Why should companies be pressured to play a role in social issues?

She acknowledges my question, her smile suddenly wavering: "Actually, there’s been a debate in both the US and Europe for the past two years about this. Some people believe that the business of business is business. Period. Why should they be concerned about all these other social problems or the impact on the environment or whatever?

"But I like to say that you can’t have a successful company in a failed world. For example, how is a company like UPS (United Parcel Service) going to grow its business in Malaysia if it doesn’t have employees who are educated enough to perform the job they need done or if there aren’t strong businesses here that can be their customers?

"If say, you are a natural resource based kind of business and you completely deplete the rubber source, how are you going to maintain your business if you’ve no longer got supply for your product? I think you can make an economic case for why businesses should do these things."

Maybe Malaysian companies aren’t either ready or don’t have the resources, or there is not that same kind of expectation for them to do certain things but certainly for multinationals operating here. They would do these things in their home countries so they should have the same principles and practices here.

So if a company like UPS is working with community groups in the US and they also happen to have a strong business presence here, they should also be working with community groups here, providing grants to them and providing volunteers from their employee base."

Does she expect Malaysian companies to follow suit? I prod. Surely different countries will have different priorities and values that will shape how businesses act there. Like Malaysia for example, should it do things the "American way"?

"No, no, there is certainly no need to put all countries under one hat, or one model," replies Murphy.

She continues: "I have to find out what role typically has the private sector played in addressing social issues or environmental issues. In some places it’s definitely the role of the Government and people wouldn’t expect or want the private sector to get involved.

"Other times, it’s really the role of the family to take care of the elderly or poor children and they wouldn’t want businesses to get involved in that. In the US, it's a little different. There is an expectation that the private sector plays a role in some of those things.

Her job of nine years sounds very challenging, I pose to Murphy.

She nods: "Definitely, because corporate responsibility encompasses so many different things.

"Another challenge is helping people to communicate with each other as so much of my work is helping bridge the private and the public sector."

According to Murphy, who was actually part of the Presidential Management Intern Programme in Washington prior to her present role with APCO, an important skill to have on the job is definitely patience. "And intellectual curiosity, being a great listener, and strategic thinking — being able to help your client see the big picture or connect different pieces of their business with different opportunities is very important too otherwise you’re just an expensive adviser," she discloses with a smile.