Corporate social responsibility of organizations

People and Organizations: The ethical context of HRM, Lecture 10

Corporate Social Responsibility (CSR) is becoming an increasingly important activity for businesses nationally and internationally. As globalization accelerates and large corporations serve as global providers, these corporations have progressively recognized the benefits of providing CSR programs in their various locations. CSR activities are now being undertaken throughout the globe (McWilliams, 2015).

The concept of Corporate Social Responsibility (CSR) began in the 1920s; however, due to the Great Depression and World War II, it failed to become a serious topic amongst business leaders until the 1950s. The obligations of business to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of our society (Bowen, 1953). Over the subsequent decades, CSR definitions, practices and adoption of CSR expanded immensely. Philosophies such as management as a trustee, Christian ethics and the balance of power between business and society were popularized (Frederick, 2006).

Corporate social responsibility in Sri Lanka

Stakeholders and other interested parties want to know about the Organization's social responsibility. Organizations are responsible for their actions with regard to both socioeconomic and environmental consequences. Many organizations in Sri Lanka, therefore, consider their socio-economic and environmental impact part of their responsibility while at the same time generating profit (Nanayakkara, 2010). Moreover, in a developing economy like Sri Lanka, the CSR concept plays an important role in the sustainable development discourse. This section discusses the development of the concept of CSR in Sri Lankan organizations and the ideas of various scholars in this field.

Corporate social responsibility regulations and guidelines

CSR operates on a voluntary base in Sri Lanka. However, Sri Lankan companies are using the communication of CSR as a proxy for CSR activities. While voluntary disclosure of CSR activities by Sri Lankan organizations is common, it is not a mandatory requirement (Abeyseker et al., 2009). All listed companies have documented their CSR contributions and activities in separate sections of their annual reports according to the policy of the Sri Lanka Accounting and Auditing Standards Board, adopted in 2004. Sri Lankan companies use IFRS to prepare their financial statements (Embuldeniya, 2000).

References

McWilliams, A. (2015). Corporate Social Responsibility. Journal of Corporate Business , 99-110.

Bowen H.R. 1953. Social responsibilities of the businessman. Harper and Row: New York.

Frederick, W. (2006). Corporation, be good! The story of corporate social responsibility. Indianapolis: Dog Ear Publishing.

Nanayakkara, M.S. (2010). Socio-economic of Corporate Social Responsibility practices in Sri Lankan domestic manufacturing companies‘, Master Thesis, The University of Agder.

Abeysekera, I., & Guthrie, J. (2004). Human capital reporting in a developing nation‘, The British Accounting Review, vol. 36, no. 3, pp. 251–68.

Embuldeniya, D.K. (2000). Economic reforms and the corporate sector in Sri Lanka‘, Contemporary South Asia, vol. 9, no. 2, pp. 165–79.