Corporate Social Responsibility (CSR) is an action or a concept made by the company as an awareness, acceptance and management broad implications and impact of corporate decisions in the interests of all stakeholders as a form of their responsibility towards social or environmental around which they operate. CSR is committed to sustainable amongst business behave ethically and contribute to economic development while improving the quality of life of the labor force and their families and local communities and society as a whole.
Corporate Social Responsibility (CSR) is a form of attention and concern for the environment and public companies. Companies not only seek profit alone but for the good name of the company. Therefore, CSR is needed in a company. CSR also has several benefits including better make company’s reputation in the eyes of the community, get support in practice by the community, and can be used as indicators by all consumers in their buying decision.
Corporate Social Responsibility is to perform survey that many people who had opinions that the company is strongly influenced by the CSR, and the results are as follows:
• 60% Public Opinion against the Company influenced by CSR
• 60% of respondents said that ethics business, practices towards employees, the impact on the environment, corporate social responsibility (CSR) will be most responsible for
• 40% of respondents said that the company’s image and brand image that will most affect their impression
Indonesia is one – the only State that makes CSR a legal obligation, therefore, CSR has a foundation – the legal basis which includes:
• Being a liability that must be implemented by the company in accordance with Article 74 of Law Number 40 of Limited Company (Company Law) who has passed the House of Representatives, August 2007
• Decision No. SOE minister. Kep-236/MBU/2003 about the Partnership Program and Community Development (CSR)
• The decision was last revised with Minister of State Enterprises no.Per-05/MBU/2007 regulations concerning state partnership program with small and Community Development Program
CSR is good to integrate the four principles of good corporate governance, namely fairness, transparency, accountability and responsibility, in harmony. There are fundamental differences between these four principles. The first three principles tend to be shareholder-driven, because it paid more attention to the interests of company shareholders.
Meanwhile, the principle of responsibility to better reflect the stakeholder-driven, as more major parties – the interested parties of the existence of the company. Stakeholders can include company employees and their families, customers, suppliers, local communities and society at large, government referred to as the regulator. Here, companies not only have to be able to create value-added (value added) products and services for corporate stakeholders, but also must be able to maintain the continuity of the value added created it.
However, the principles of good corporate governance should not be interpreted narrowly. That is, not just forward the credo beneficence (do good principle), but also magnificence (do no-harm principle).
Companies that only forward beneficence CSR tends to feel has done well. For example, because it provides a free scholarship or compensation for example. In fact, without noticing and at the same time the company has been making people more stupid and behave consumptive. Good CSR combines the interests of shareholders and stakeholders. CSR therefore not only focus on the results to be achieved, but also in the process for these results.
How far CSR has a positive impact for the community? CSR will be more positive impact on society; this will greatly depend on the orientation and capacity of institutions and other organizations, especially government. World Bank study (Howard Fox, 2002) indicates, the role of government associated with CSR include the development of policies that make healthy market, the participation of resources, political support for CSR actors, creating incentives and capacity-building organization. For Indonesia, you can imagine, the implementation of CSR requires the support of local government, legal certainty and guarantee social order. The government can take without having to perform an important role in the regulation of the legal and political situation today. In the midst of poverty and underdevelopment problems experienced by Indonesia, the government must act as coordinator for the handling of the crisis through CSR (Corporate Social Responsibility). The government can set the handling areas of focus, with the input side of competent. After that, the government facilitates, supports, and to reward businesses that want to get involved in this great effort. Governments can also oversee the process of interaction between businesses and other groups in order interaction process fairer and avoid the process of manipulation or threat one party against another.
CSR is rooted in ethics and principles prevailing in the company and the community. Ethics adopted is part of the culture (corporate culture); and ethics adopted by the community is part of the culture community. Principe-principle or principles that apply in the community also includes various rules and regulations the government as part of the constitutional system.
According to Jones (2001) a person or institution can be considered to make a decision or act ethically when: 1) A decision or action is based on the values or standards accepted and applied in the relevant organizational environment. 2) Willing to communicate this decision to all parties concerned. 3) Are you sure others will agree with the decision or the decision may be accepted by ethical reasons.
A company should not only make profits as possible, but also have ethics in action using human resources and the environment to realize sustainable development. Performance measurement is only observed from the financial and profit components (finance) will not be able to raise and preserve, because workers are often faced with conflicts, conflicts with local communities and further away from the principles of environmental management with sustainable development principles.
CSR performed by – in Indonesia will be different from each other depending on the context of the problems facing society. The difference this context would also imply the differences in strategy approach taken by each. The presence of CSR in an area also never be separated from the existing system of institutional partnerships in the vicinity. Governments, indigenous organizations, NGOs, and other social institutions also provide color to its CSR activities. The presence of these stakeholders can be present as the success of CSR or otherwise, if the process of synergy between the actors was not performed. (By: Prof.. Dr. Hardinsyah, MS)
CSR For Social Responsibility
But if we look in more depth by considering the regions surrounding the companies where there are tall buildings and large factories that reaches acres then we find not the least the environment around the area is poor majority, people do not have jobs and disadvantaged areas.
What about the responsibilities of business, management and employees will respond to this problem? Surely as a human being we have a sense of sympathy for others, coupled with any insight and knowledge we have received, then the direction is that we want to create a cozy atmosphere, safe and secure in the workplace and the environment.
In circumstances like these, the company that developed it should create a Committee that is now known as Corporate Social Responsibility (CSR). Not just a social program of a company but became a responsibility / role of the company or business to surrounding communities.
CSR is in line with the stakeholder theory, the theory which argues that corporate responsibility is not just to shareholders but to the stakeholders whose scope is broader. Stakeholders include individuals and groups who may be affected and affect the organization, from suppliers, customers, clients, shareholders, employees, media, society, until the government and the environment.
Form and Benefits CSR
What are the forms of CSR itself? CSR is very diverse, including the form of educational assistance such as: construction of schools such as elementary school where a lot of areas that the infrastructure is not feasible to so many who collapsed, blood donor, socialization safety riding in cooperation with the police in schools or to the public-school, vocational training to street children / homeless, help areas affected by earthquake, flood, tsunami and in other forms in accordance with existing conditions within the company itself.
CSR is not just limited to that alone, but also including in terms of managing their resources more efficiently so that their use, such as water management or waste management. In fact, by encouraging employees to be wise in the use of electricity was actually also one form of CSR.
All will go well if the company’s management-driven and supported by all employees to get together to have a sense of responsibility towards the environment. So the company is not just a name and a large turnover, but a company that has value to society and also promote the environment.
In addition, CSR also has benefits in improving the company’s reputation. It is the people increasingly have a high awareness of the environment, so they also increasingly require companies to have a social responsibility, and more selective in choosing.
Criticism of CSR
CSR did provide a variety of benefits, but on the other hand there are a number of criticisms directed towards CSR, and is an important issue. Companies often criticized that they implement CSR because only hope to obtain a commercial benefit only, rather than pure of intention to perform social responsibility. The ads on CSR was launched, with the hope that the community was not questioned about their real operations is questionable.