SOCIALLY RESPONSIVE PROGRAMS

Socially Responsive Programs

Socially Responsive Programs

Today companies in Jamaica, including SMEs, are directing increasing amounts of resources on environment protection programs, corporate codes of ethic, extensive projects on employees' health and safety, and other activities which usually do not promise clear financial outcomes, but indicate that the company recognizes its social responsibility. In general, corporate social responsibility can be defined as a company's obligation to be sensitive to the needs of all the stakeholders in its business operations. The company's stakeholders are all those who are influenced, or can influence, the company's decisions and actions. Usually the following entities are considered to be stakeholders: employees, customers, suppliers, community organizations, subsidiaries and affiliates, joint venture partners, local neighborhoods, investors, and shareholders (or a sole owner). (Turban 1997)

The evidence demonstrates that companies' in Jamaica involvement in CSR projects has been growing steadily. For example the Europe CSR survey shows that if in 2001 33% of managers answered positively to the question whether their companies have CSR projects, then within the next two years the share of such managers increased to 46% (Europe CSR, 2003). But the questions arise: what makes companies spend money for CSR activities? Why are they interested in doing so?

According to the economic point of view conceptualized by Milton Friedman, a company's principal interest are to maximize returns to shareholders, while obeying the laws of the countries within which it works. Additionally, there are various mechanisms such as accounting oversight, performance evaluation, stock options, deferred compensation and others, which usually increase accountability of managers to shareholders. And finally, in most cases corporate laws and regulations simply prohibit managers from being involved in any activity that would reduce profit, or, in more general terminology, corporate value. In this case, the companies will participate in CSR projects only if they see commercial benefit in them. Moreover, for such a company the resources applied to CSR activities must have a higher return than those resources that could be obtained if applied elsewhere. (Sen 2001) Therefore the company is ready to launch employee-training programmes or improve their working conditions, use environment-friendly technologies, undertake philanthropy or any other CSR activities only if it can be a potential source of additional value. (Mishel 1986)

CSR activities in Jamaica

Social projects can be attractive for businesses due to a number of reasons. For example, corporate social responsibility can be a good aid in recruitment and retention, especially in competitive labor markets. Potential recruits are increasingly likely to ask about a firm's CSR policy during an interview and having a comprehensive policy can give an advantage. CSR can also help to build a 'feel good' atmosphere among existing staff, which are a necessary condition for maintaining high level of retention ratio. In many spheres specific knowledge and skills come with experience and in these cases staff retention becomes an important factor in rising the companies' productivity and work efficiency. (Keim 1978) At the same time competitive advantage of many businesses in based on their reputation, ...