Blog and Ideas
May 21, 2015
By Jorge Chávez

The Problem of Corporate Social Responsibility

Is corporate social responsibility on the rise or in decline? Mijo! Brands explains why it has become an unsustainable trend.

The Problem of Corporate Social Responsibility

In Mexico, the number of companies that obtained an award for being socially responsible increased from just 10 in 2000 to over 900 by 2013. Corporate social responsibility (CSR) is defined as the way a company´s activities have an impact on society.

Although currently this seems to be an attractive subject or is in vogue, many experts believe that this is not a sustainable trend and, consequently, is destined to disappear as they continue to take on a superficial role, that is, that although companies obtain certificates and / or distinctions, their liability actions are not being executed from within.

According to Dr. Antonio Lloret, in order for CSR to be maintained and change the behavior of enterprises, it is necessary to be institutionalized and / or linked to the brand strategy. Otherwise, it will not be sustainable because these actions are taken by social pressure (including the media, academia, civil society organizations and even governments) and not from within the company culture.

Therefore, if the CSR is destined to disappear, is it possible to add enduring and responsible actions into businesses that are linked to the strategy? The answer is yes, as long as the underlying management model that incorporates the company into various business strategies of formal and institutionalized processes is implemented.

Surely this would tackle the complexity and the limits imposed by economic, social and environmental systems that, over time, will generate value.

The reason why many companies have not adopted a socially responsible approach lies in two fundamental issues:
1) They do not see the use beyond good intentions
2) Eventually they become bored waiting form immediate results or profits

According to the census conducted by INEGI in 2010, Mexico had 681,723 businesses registered at until that time, only 5.7% percent of had more than 50 employees accounting for some 65% of the total gross output and they are employing just over 25% of the workforce.

Now, assuming that small businesses individually have less impact than large ones or that they do not have the financial resources needed to adopt a system of social responsibility, their incentives are also lower than those of large companies. Speaking of big business, in a study conducted at the ITAM in 2012 that the 500 largest and most important companies in Mexico according to the list published by Expansion between 2009 and 2011, only 50% of companies have some social accountability system while the rest are not sure what the issue means or are simply uninterested.

So while corporate social responsibility is not modified to move from superficial to a management model based on its institutionalization and linkage with the strategy (becoming a model of corporate sustainability), there is a great risk of missing further golden opportunities.

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