Definition of CSR – All activities and activities carried out by the company must be accounted for by each company. Starting from employees, shareholders, customers, government, and also the general public. This responsibility is usually known as Corporate Social Responsibility or CSR.
So, CSR is a form of accountability that must be carried out by a company to all parties in it by implementing a program that has benefits. Then, have you ever heard of the term Corporate Social Responsibility or CSR? If you have never heard of or know about it, this article will explain in full what CSR is, its purpose, function, and examples. Check out this article until it’s finished.
Definition of CSR
As mentioned above, CSR is a form of social responsibility that must be carried out by company management for all stakeholders and also all parties who have an interest. The various parties referred to above are company employees, company shareholders, consumers, the government, and the community within the scope of the company.
The form of responsibility that must exist in CSR is an activity carried out by company management as a form of responsibility as a company to the social community and the surrounding environment. Where the company carries out all its operational activities.
So that we can conclude that CSR is a social responsibility carried out by the company to provide benefits to parties in and around the company by carrying out a useful program. You need to understand that a business does have a responsibility to society in general and the environment in which they stand.
The nature of the responsibility is mandatory. If not done, then the business will be threatened with sanctions. This applies to businesses that are already large or businesses that are still small. While the business is indeed related to the comfort of the people around it.
Definition of CSR According to Kotler and Nancy
The other understanding of CSR according to experts. The first is CSR according to Kotler and Nancy. Where CSR is a commitment of a company that aims to assist in improving the welfare of the community through good business practices. In fulfilling this, the company can contribute a portion of the company’s resources to the parties involved in or around it.
Definition of CSR According to Kast
The second is CSR according to Kast. Where in Kas (2003, 212) reveals that the notion of CSR is a form of involvement of an organization in efforts to overcome poverty and hunger. Then it also helps in reducing unemployment and provides an allowance in the arts or education.
Here, Kast also explains that CSR is quite an important part, because it can show that a company cannot be separated from the environment around it. A company also has dependence on the environment. If the surrounding environment is good, then the impact that will be received by the company will also be good.
Then, CSR is defined as a program that has the concept that a company does have a responsibility to all parties in the company. Simply put, CSR can be interpreted as a form of corporate responsibility to all social and environmental aspects around the business location. So, besides pursuing a profit, a company must also be responsible for the people around it. One way is to provide a program that is now referred to as CSR.
CSR Implementation Model
CSR has very diverse forms. Where each company has its own methods and models in implementing it. Usually, companies in Indonesia carry out a CSR program using one of the following four methods:
a. Direct Engagement
The first implementation model is the direct involvement model. This is a method where companies will carry out CSR directly to the general public. For example, the company provides assistance in the form of cash and distributes it to the less fortunate in the surrounding community. Then the assistance was handed over directly by the company to the community.
b. Through Foundations or Social Organizations
The next model is through a foundation or the company builds its own social foundation. This method is almost the same as that used by companies in developed countries. The aim of this CSR model is to build social foundations that provide assistance to social communities in a sustainable manner.
The following are examples of foundations founded by companies which are then used as media to provide assistance to the general public:
1. The Coca Cola Company Foundation
2. Friends of Aqua
3. Dharma Bhakti Astra
c. Establish Partnerships
If you already understand the explanation of what CSR is, of course we will conclude that most of the activities carried out are social activities. Then, in addition to the two CSR models as above, many companies in Indonesia use the third CSR model, namely Establishing Partnerships. This one model is carried out by establishing partnerships with outsiders or other parties. Partners who are invited to cooperate are usually partners who already have a main focus in the field of social activities. Whether it’s a social institution managed by the private sector or the government, and others. Here’s an example:
1. PMI (Indonesian Red Cross): by collaborating with PMI, companies can hold blood donor events that employees and the general public can participate in. So that this will encourage anyone to help others through blood donation.
2. Dompet Duafa: through this institution, companies can provide services or social fund management services. For example, humanitarian funds, alms, zakat, and others.
d. Join the Consortium
The last model is by joining or just supporting a consortium. What is a consortium? A consortium is a form of cooperation between two companies to carry out a project. Where the project is a social project that aims to prosper the community. For example, road repair projects, construction of school buildings, bridge construction, and other activities that benefit the community in general around the company.
CSR Objectives and Benefits
In carrying out CSR programs, the company must have certain goals, where these goals must still be related to welfare and benefits for the community and parties in the company. The following are the objectives of the CSR program in general:
1. Good Name and Corporate Image
One of the main objectives of implementing the CSR program is to maintain the image and good name of the company in front of the general public. Usually, a CSR program implemented by a company to achieve this goal is to show that the company is the party that will be responsible for the welfare of the surrounding community.
Not only that, by carrying out CSR programs, the company can also improve the company’s image and reputation in the surrounding environment and also to all stakeholders or people who work with the company. So it will be very influential both for the development of the company in the future.
2. Maintain Good Relations with Stakeholders
The next objective of implementing the CSR program is to maintain and maintain good relations with stakeholders. With a CSR program carried out by a company, it will create a warmer and friendlier relationship with the company’s environment. Not only that, the CSR program is also able to provide many benefits to the community in their own development and empowerment efforts.
3. Solutions To Solve Problems That Occur Around The Environment
The existence of a company in a certain place will certainly involve many parties in that environment. One way to solve the problems that exist around you is by holding a CSR program. Existing problems can arise from various sides. Starting from the environment, social, and also the economy. The existence of a CSR program is one form of the company’s efforts to assist in solving all problems that exist in the surrounding environment.
Benefits of CSR (Corporation Social Responsibility)
1. For Companies
The benefits of CSR for companies that you need to know are three. The first is to open wide employment opportunities for other parties. The second is as a media promotion for the company itself. Then the third is to make a new innovation in the form of a particular program.
2. Benefits for the General Society
While the benefits that will be obtained by the general public are increased welfare in various aspects. Where the community around the company becomes more concerned and also maintained. Then they can also feel the benefits of the CSR program directly. Both the empowerment and development programs provided by the company.
3. For Other Parties
The CSR program carried out by the company can not only provide benefits for the company and also the community. But it can also provide benefits for shareholders, the government, and also consumers. The benefits that will be obtained by shareholders include the company will get a good image. So that it can increase the possibility of additional investors. As for consumers, they will increasingly trust the company. Then the benefit for the government is that they will feel helped by the CSR program. Starting from development in the economic, social, and environmental fields.
Types of CSR Programs
In the process of implementing the CSR program, the types of activities are divided into five types. Here are five CSR activities that you should know about:
1. Cause Promotions
This type of CSR program can be interpreted as one of the company’s efforts to increase awareness of a problem. The other purpose of this type of CSR is as a media promotion for the company itself. In carrying out this type of CSR program, later the company will provide funds and resources as an effort to support social activities. Starting from community service activities and donation activities.
2. Cause Related Marketing
Companies that use this one CSR program usually have the goal of always being committed to providing a number of profits from the sales of a particular product. In order to support social activities in the community. Then the funds that will be given will be donated to those who are visible.
3. Corporate Social Marketing
This type of CSR is usually carried out by companies in the form of campaigns. Generally, the form of campaigns carried out by companies is in the form of health, environmental, and other issues. The purpose of CSR “Corporate Societal Marketing” is to be able to assist in supporting changes in society in a better direction.
4. Corporate Philanthropy
This type of CSR is carried out by the company in the form of direct contributions by disbursing funds. Examples of this type of CSR are donation programs, charity, and also providing assistance to the community in various forms.
5. Community Volunteering
Community Volunteering is a type of CSR carried out by the company in the form of services or services provided free of charge to the community. Usually, companies will involve a number of employees to voluntarily set aside their time in various activities that can support the sustainability of the environment around the company.
6. Nature Rehabilitation
The next type of CSR is the nature rehabilitation program. Here the company has a responsibility to protect nature, especially for companies that produce waste. As for some examples of rehabilitation programs that can be carried out, among others, planting mangroves, forest reforestation, planting seeds of productive plants, and others.
7. Environmentally Friendly Waste Management
Next is waste management that is environmentally sound. With this management, it is expected to minimize the toxicity of waste. So that when disposing of production waste, the waste will not damage the surrounding environment. To be able to carry out this one program, the company needs to first select the type of waste, starting from organic, toxic and inorganic waste. Then, the company is obliged to manage the waste by processing it using appropriate special techniques so that it can be properly absorbed by nature.
8. Use of Renewable Energy Sources
Another type of CSR is by utilizing renewable energy sources. Starting from natural steam, wind, water, and also solar power. By using this method, it is hoped that companies can participate in conserving natural resources that are already threatened with extinction, such as natural gas and petroleum.
Examples of CSR Program Activities
The following are some examples of CSR activities that can be used as references for companies:
1. In the economic field: Establishing a Savings and Loans and Business Cooperative program for the community as well as employees, developing MSMEs around the company’s area, and providing several capital funds for businesses in the surrounding community.
2. In the health sector: Providing blood donation events that can be attended by the general public and employees alike, free vaccination programs for the public, and providing free medical treatment.
3. In the environmental sector: Organize waste management programs, provide capacity training programs, and organize seminars related to education.
4. In the field of infrastructure: Providing places of worship, building facilities and infrastructure for the public, and repairing public roads.
5. In the field of culture; Holding art festivals, developing and also empowering artists around, and preserving culture and works of art.
From the explanation above, we can conclude that CSR programs can be carried out by companies by carrying out operational activities in various fields. Starting from the economic, social, and environmental fields. In carrying out CSR activities, of course a company must have goals, such as maintaining good relations with stakeholders, maintaining the good name and image of the company, and providing solutions to problems that occur around it.