To address the issues, managers reassess forms of packaging re-cyclability of products, environmental safety practices, and the like. Most of the debate has focused on the extreme. On one side is the classical or purely economic view that management’s only social responsibility is to maximize profits. On the other side stands the socioeconomic position, which holds that management’s responsibility goes well beyond making profits to include protecting and improving society’s welfare.
The importance of corporate social responsibility surfaced in the 1960s when the activist movement began questioning the singular economic objective of business. For instance, were large corporations irresponsible because they discriminated against women and minorities, as shown by the obvious absence of female and minority managers at that time? Did a company like Union Carbide ignore its social responsibility by not adhering to the safety standards of its parents company simply because it was not a legal necessity in India? Was a company like Dow Corning ignoring its social responsibility by marketing breast implants when data indicated that leaking silicone could be a health hazard? Were tobacco companies ignoring health risks associated with nicotine and its addictive properties? Were companies such as Enron and its accounting firm Arthur Andersen failing to properly protect the financial interests of their stakeholders? Before the 1960s, few people asked such questions. Even toady, good arguments can be made for both sides of the social responsibility issue. Arguments aside, times have changed.
In recent times, there is trend towards integrating the two viewpoints, which is, perhaps a more sustainable option in the long term. From adopting inclusive capitalism in countries like India, where more than 25 percent of the population are still under the below poverty line (BPL) and live on less than 49 ($1) a day. Business will be the biggest beneficiary of tapping the bottom of the pyramid (BOP), which is constituted by the 4 billion people who live below the poverty line all over the world. There are numerous examples of how some leading Indian companies like ITC, HUL, ICICI Bank, and Aravind Eye Hospital improved their profitability by innovating processes to access this huge, hithero untapped market, while simultaneously benefiting this section of society.
The HR function has gained traction. The skills they need are changing. HR professionals now have to become business partners. They have to learn to react to business needs. The new paradigm is that work force strategy is the number one driver for business.
This year was a reality check for everyone. Earlier businesses were reactive; as the economy rebounds, companies will be more proactive. The rules of the game have changed. Organizations have gone through introspection. The employer brand has become critical, as has gaining the right kind of experience and a career path.
The mission of the organization and as extension the HR folks, is to provide challenges for the employees, keep them engaged and provide a social glue to prospective and current employees In short they need to understand the employee value proposition.
They need to clearly identify the talent needs of the organization going ahead, leadership competencies, gaps and development issues. Reality is that organizations can’t chase talent anymore; it has become more important to invest in developing and retaining existing talent.
A business strategy is no good if there isn’t an effective talent strategy. Senior management needs to set this context and cascade the vision to the freshest recruits. For this, organizations need to invest in leaders who can articulate this vision and also understand that the bottom line is directly related to employee engagement.