Introduction
The European Commission and the European Parliament defines corporate social responsibility as "a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis (Boeger, et.al., 2008, p. 92)." It is characterized by the manner the organization embed social and environmental principles and practices on the operations of the business. Instead of separating the social and environmental concerns from the business, corporate social responsibility places these concerns on the day-to-day operations of the business. And the definition proceeds to fine it as "behavior by businesses over and above legal requirements, voluntary adopted because businesses deem it to be in their long-term interest (Boeger, et.al., 2008, p. 92)." This means that CSR is a voluntary concept that most businesses follow as part of the commitment to go beyond what are expected of them.
However, in practice CSR takes a broader meaning with the decision-making and operations of the organization. CSR is directly linked to the ethical values and principles that an organization holds; to the compliance of the organization to the legal framework of the state; to the respect of people, communities, and the environment. An organization is not just an entity that focuses on the creation of wealth and the on-going quest for profit, but it is also a entity within the society, as such it has roles to do to ensure that the said society will continue, flourish, and improve.
According to Horrigan (2010), corporate social responsibility is a concept that is made up of three vital components. First, CSR is part of the organization's traditional philanthropy model. Second, CSR can considered as a branch of the organization's risk management program. And lastly, CSR provides an opportunity for the organization to enhance its business value and remain competitive in the market. All these three components point to the truism of profit-sharing and sacrificing as a response of volunteerism for sustainability.
Profile of the Case
Over the last three decades, the world has a phenomenon of water privatization. This prompts several debates and raises questions on ethics and the corporate social responsibility of organizations within the said industry. Moreover, the matter transcends the political and social ground of states. This questions the responsibility of the government to provide water for its citizens and the potential lack of responsibility of the government to safeguard the sustainability goal of the world. Not only the issue is focused on developing and underdeveloped countries, where, at most, water system and provisions are not of the best, but the issue also looks at the awareness of the people in developed countries of the emergence of the urgency to keep the universal availability of water.
However, the facts remain that 18% of the world's population do not have access to basic safe drinking water and 40% do not have access to available basic sanitation. Yet, the
polarizing reality of Canadians using 300 liters of water per day is another problem. The UN Millennium Development Goals seek to address the problem of water shortage by creating access to water for 300, 000 people everyday.
In developing countries, water supply is monopolized by few private companies including French MNCs, Suez and Vivendi. The goal of water privatization is to ensure that the population has access to safe drinking water and to increase sustainability of water supply. However, the results are alarming because the poor who cannot afford to buy water from private companies resorts to use of worst conditions of lake water or such other relative bodies. Yet, with all the misery that water privatization, the World Bank still grants loan contracts to governments when they will assure privatization of water (Grusky, 2001). The ironic example is showed by the Water Wars in Bolivia in 2000. As a result of the unrest caused by the privatization, the privatization of water system was reversed and terminated.
The problem of water privatization is not just isolated among developing countries, but also with developed countries. The decline of water supply has been attributed to the capitalist nature of water extraction done by major multinational corporations such as Coca-Cola. In this regard, the question on business ethics and how the business regards CSR becomes a fundamental issue. If CSR is being regarded and accomplished by giant multinational companies, it should be that the decline of water supply is avoided and sustainability is assured; otherwise, there is a problem with the water businesses and governments define and practice CSR.
Critical Assessment of the Various Theories Governing Corporate Social Responsibility and Its Application
In Corporate Social Responsibility Theories: Mapping the Territory, Garriga and Mele (2004) categorizes the different theories on CSR into four groups: instrumental theories, political theories, integrative theories and ethical theories. Instrumental theory focuses on the identification of connections, or lack thereof, between stakeholder management and the achievement of traditional organizational goals and objectives (Esposito, 2009). In this concept of CSR, the ultimate goal and responsibility of the organization toward the society is the maximization of the profits for the shareholder and the nation's growth. In this standpoint, CSR becomes instrumental only in the creation of wealth and generation of the same. As such, even the philanthropic activities or investments of the company should be in accordance to the value of return of investments or profits in the future. In this theory of instrumental CSR, the organization does not have any obligation or responsibility in a sense, but the organization has interest on the society only when self-enlightened. This means that the organization should not drag the entire stakeholder of the organization to provide CSR, but it should be that the organization maximizes profit for stakeholders to provide the necessary CSR.
Political theories of CSR, on the other hand, works on the principle that the power of the organization has a certain level of responsibility. This cements the idea of correlation "between business and society and on the power and position of business and its inherent responsibility (Garriga & Mele, 2004, p. 5)." Following the axiom of this theory, it is to say that CSR becomes an accomplished objective. It simply says that because the company or business is part of the society and that actions of any entity of the society affects each other, it is necessary for business to use power responsibly, either for its own benefit or the benefit of consumers.
In this conception of CSR, business maintains a certain level of responsibility, but it is also impossible to say that the organization has absolute responsibility. It should be understood that because managers and business executives can influence the course of the free market, although at certain extents and levels, it is necessary for them to use their position for the common good (Gond, et.al., 2010). Otherwise, when power is not used or exercised responsibly that power may decline and be eliminated by the society that puts it there. Political theories may hold certain level of truism with regards to CS, however in practice, when power is not used properly, despotism and oligarchy happen within the society
In this conception of CSR, business maintains a certain level of responsibility, but it is also impossible to say that the organization has absolute responsibility. It should be understood that because managers and business executives can influence the course of the free market, although at certain extents and levels, it is necessary for them to use their position for the common good (Gond, et.al., 2010). Otherwise, when power is not used or exercised responsibly that power may decline and be eliminated by the society that puts it there. Political theories may hold certain level of truism with regards to CS, however in practice, when power is not used properly, despotism and oligarchy happen within the society
Political theories draw the few lines, but integrative theories complete the story. Integrative theories follow the order that business depends on society for its growth, continuity, and development, as such business has inherent responsibility toward society. This means that the society defines the roles of the business, rather than the business defining the society. In this regard, the public opinion becomes an important part to the direction that the business should take. Looking closely, this becomes a truism of the practice today. CSR is more defined on what the society needs at the moment and not on what the business sees the society needs.
Lastly, ethical theories on CSR become the focal point of today's business environment. This is anchored on doing the right thing for the best purpose, rather than allowing businesses to do what they want to achieve their goals. These theories center on the idea of check and balance, respect, and adherence to the norms of the time. It should be that the interest of the organization reflect the legitimate and right interest of stakeholders without hindering the achievement or accomplishment of the interest of the common good. This becomes the fundamental framework most organizations follow in their definition of CSR to ensure that all stakeholders and interests are given attention and are properly addressed.
Critical Evaluation of the Impact of Corporate Social Responsibility and Supply of Water
The CSR strategy and organizational framework of Best Water Technology states:
"Our compliance system ensures that there is an organizational framework for the realisation of current statutory regulations as well as our voluntary, company-specific guidelines within the Group. The purpose of this is not just to avoid risks (product liability, penalties and fines), but also to create a positive public image for the Company and its employees (www.bwt-group.com)."
Look at this CSR strategy statement, it is easy to find what are discussed above. First, CSR speaks of going beyond the legal framework and requirement. The state or government maintains several rules and regulations that should be followed with the privatization of water to ensure that access to safe drinking is provided and the sustainability of water supply is ensured. Yet, the CSR goes beyond that requirement in the aim of creating a positive public image. This is in direct parallel with the theories discussed. The organization works on CSR and provides for the society with the agenda of generation returns in the process, either financial or indirect financial value.
The above-mentioned example is just a tip of the iceberg, for the reality of the way the government defined access to water and sanitation services to thousands of citizens because they can't afford to pay the water bills is also alarming (Banerjee, 2009). This is a stark contrast to the political move of Coca Cola's partnership with the World Wildlife Fund as an agreement of conserving and protecting fresh water across the planet (Johnson & Turner, 2010). But the motive of Coca Cola can still be deemed profit-motivated; Coca Cola aims to formulate a strong water resource in the future that the organization can tap on in the new future.
Simply, we can see the problem of the CSR of most organizations. Since 1990, water privatization has become a phenomenon that has trapped the world's water supply (Johnson & Turner, 2010). Although, access to water wells are still available, the privatization of water becomes the focal point for water of the other means to be polluted or of diminished value and volume. The issue with the CSR of most organization does not revolve on the value of water system, but on the motivation and agenda of the CSR. For instance, in Coca Cola's case, the partnership with the World Wildlife Fund would raise necessary funds for the protection of fresh water across the planet from pollution and other damages caused by man. Yet, the ultimate goal is to create a resource for Coca Cola to be used in the near future, rather than to ensure that people will have access to these resources. Coca Cola invested their CSR funds on this initiative so that they will be able to gain in the new future as other sources of water declines.
Another problem that is seen with the CSR is the investments focus. Most organization's CSR works to promote establishments of safe, clean and reliable water system. However, the water system becomes a hindrance to the access of poor people to the water supply. Instead of providing for the needs of the people for water, CSR of most organizations work to keep the water system isolated from the access of the poor. This is still a business motive to force the poor in purchasing water from the private organization. But for the poor who cannot buy, the problem becomes bigger, as demonstrated by the Water Wars of Bolivia and the South African government's denial of access to water (Lake, 2004).
The CSR of most organizations becomes more focus on creating healthy and safe water for the people, rather than making safe and healthy water available to the poor people. If we look at the CSR of organizations, it is easy to say that they follow the guidelines set by the government and they even go beyond the legal framework, but the real demand of the society becomes an ignored and rejected issue. It could have been that CSR provides water for the poor so that they will have access to safe water, rather than drink water from lakes, rivers, and even ponds.
Conclusion
CSR should ensure that water supply is accessible and available to the poor, and that water privatization does not stop the sustainability of water for the poor. The agenda could have been to generate revenue from water industry without taking away water from those who need it most, but don't have the capability to buy. This is the real meaning of corporate social responsibility because society is people. When people are not provided with their needs, the society collapses and the meaning of CSR also collapses. CSR is deeply embedded in the definition of the poor, than the meaning of the achievement of the goals of the business.
CSR is not just a concept that businesses adopt, but it is a practice that takes part in the day-to-day operations of the business. This is directly linked to the value of the organization in the society. For organizations that do not have much value in the society, their responsibility to give back what they get from the society is also small; otherwise, it should always be directly proportional in a ratio basis. The power that the organization has should be used to foster growth and welfare the society so that the people therein, who are also their consumers or market base, can still maintain their potential to participate in the cycle of the economy and business.
Yet, we see the failure of the CSR to translate this end. Rather than protecting members of the society, the water system denies them access to safe and clean water. As a result, they became disenfranchised; they don't have the support they need so that they can live in a better life and so that they will be able to join the consumer base of water companies. The cycle becomes so focused on what the organization can get from the CSR, rather than on the provision of the ethical demands of the society.
Yet, in this failure of the organization's CSR, we see another failure – the governments. As much as the government is the leader of the society, it fails to elevate the welfare of the society, rather it takes a different plight for the achievement of businesses and economy. Yet, what the government fails to acknowledge is the major role that members of the society play in the achievement of national objectives and goals. In essence, CSR of organizations fails to do what must be done for the government fails to force its hand for the achievement of the real corporate social responsibility.
References:
Banerjee, S. (2009). Corporate Social Responsibility: The Good, the Bad and the Ugly. Edward Elgar Publishing.
Boeger, N., et.al. (2008). Perspectives on Corporate Social Responsibility. Edward Elgar Publishing.
BWT-Group.com. Corporate Social Responsibility. Retrievedfrom http://www.bwt- group.com/en/investor/sustainability/Pages/Corporate-Social-Responsibility.aspx
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Gond, J., et.al. (2010). "Corporate Social Responsibility Influence on Employees." ICCSR Research Paper Series. Nottingham University Business School.
Grusky, S. (2001). IMF Forces Water Privatization on Poor Countries. Retrieved from http://www.ratical.org/co-globalize/waterIMF.html
Horrigan, B. (2010). Corporate Social Responsibility in the 21st Century: Debates, Models and Practices Across Government, Law and Business. Edward Elgar Publishing.
Johnson, D. & Turner, C. (2010). International Business: Themes and Issues in the Modern Global Economy. Routledge.
Lake, V. (2004). Privatizing Water, The New World War. Retrieved from http://www.solidarity- us.org/node/469
