Dynamics of Corporate Social Responsibility - Bangladesh Context

Dynamics of Corporate Social Responsibility - Bangladesh Context

Professor (Dr) M Alimullah Miyan

Vice Chancellor & Founder

Miyan@iubat.edu

IUBAT - International University of Business Agriculture and Technology

Dhaka, Bangladesh

September 2006

Contents

Abstract

I. Introduction 1

II. CSR in Historical Perspective 5

III. CSR Implications to Business Activities 6

IV. CSR as Community Development 6

V. CSR Applications and Realities in Bangladesh 6

VI. Prospects and Future of CSR in Bangladesh 8

VII. Good Governance and CSR in Bangladesh 8

VIII. CSR Perceptions of Business Community in Bangladesh 9

IX. Conclusion 9

References 10

Abstract

Apart from the benevolent social services by some business firms, the new concept of CSR is an emerging one. Businesses are driven by government, labor unions consumer groups and above all by considering CSR as a long time investment in PR. In the context of Bangladesh, it is more relevant for the export-oriented industry. Globalization has made CSR practice an imperative for Bangladesh business. CSR concentrates on benefits of all stakeholders rather than just the stockholders. Awareness and sense of necessity for practicing CSR is becoming more and more pronounced as the country has to adapt itself to the process of globalization. But the overall status of CSR in Bangladesh is still very meager. Lack of Good Governance, absence of strong labor unions or consumer rights groups, and inability of the business community to perceive CSR as a survival pre-condition in export and PR investment local market constitute some of elements undermining the evolution of CSR practices. Some untoward incident like boycott from the importer has taught the local business community about the immense importance of CSR and adoption of this modern and competitive practice is gradually increasing in Bangladesh.

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Dynamics of Corporate Social Responsibility - Bangladesh Context

I. Introduction

'Corporate Social Responsibility' or CSR for short is a relatively new term that has suddenly gained currency. Hundreds, indeed thousands, of companies are adopting 'ethical policies' or 'codes of conduct' saying how they intend to behave. More and more companies are signing up to such initiatives as the United Nations Global Compact or the Fair Labor Association. They are joining bodies such as World Business Council for Sustainable Development and CSR Europe. On both sides of the Atlantic there are myriads of conferences and 'initiatives', where corporate 'CSR Executives', some even from companies with a long anti-union record, meet up with campaigns, NGOs and indeed trade unions. Take the example of McDonald's. In the 1990s, the hamburger corporation took two campaigners through a long and exhausting libel court case in London after they criticized its corporate practices. Then there was the 2004 film 'Super Size Me'. Its public image thoroughly dented, today McDonald's leaflets in the UK show happy local farmers producing organic crops for healthy meals. Or the oil company Unocal, which was severely criticized for knowingly using forced labour to construct a pipeline in Burma, a country run by a vicious regime and subject to an international boycott. Labour rights' groups in the US took Unocal through the courts. Unocal now has a huge area on its website devoted to CSR. In fact, CSR means different things to different people. However, certain ideas are becoming commonly accepted. One is that CSR is not about philanthropy or charitable work. It refers to something much more fundamental. It is about how companies take responsibility for their actions in the world at large. Conventional CSR Watchdogs include Labor Unions, Consumer Groups, Environmentalists, NGOs and all 'Stakeholders' watching over their interest as opposed to 'Stockholders' only.

The role of business worldwide and specifically in the developed economies has evolved over the last few decades from classical 'profit maximizing' approach to a social responsibly approach, where businesses are not only responsible to its stockholders but also to all of its stakeholders in a broader inclusive sense. One can identify so many reasons for shifting the role of business from classical concept to a responsible business concept, but negative impression of stakeholders on the enterprise would get a higher priority among others. In one hand, enterprises create wealth and job opportunities for the society and on the other, they are pollute and destroy environment and ecology with devastating impact on human health and bio-diversity worldwide. To address the social problems or the problems of the stakeholders, the business community evolved a new approach in their business strategies named CSR and through CSR enterprises are intent to strike a balance between economic and social goals, where resources are used in a rational manner and social needs are be addressed responsibly. CSR can be viewed as a comprehensive set of policies, practices, and programs that are integrated into business operations, supply chains, and decision making processes throughout the company and include responsibilities for current and past actions as well as adequate attention to future impacts. CSR focuses vary by business, by size, by sector and even by geographic region. The umbrella of CSR is quite big and it includes all the good practices that increase the business profitability