Some companies disregard corporate social responsibility issues, while others embrace the concept and do everything they can to improve their business practices. Companies that take a proactive approach to corporate social responsibility don't wait for activists to raise issues or for new laws to be passed before taking action.
A Range of Approaches
Any company faced with a social responsibility issue can take one of four approaches to it. A proactive approach occurs when a company works to improve its corporate social responsibility practices without being asked. On the opposite end of the spectrum is a company that knowingly breaks the law, which represents an obstructionist approach. A company that stays in legal compliance but takes no extra effort has a defensive approach, while a company that responds to issues as soon as they are raised -- but not before that -- has an accommodative approach.
Proactive Versus Reactive
According to "A Handbook of Corporate Governance and Social Responsibility," edited by Guler Aras and David Crowther, the concept of corporate social responsibility was originally a reaction to criticism. When consumer and environmental activists criticized companies for poor environmental, worker safety or quality control practices, some companies responded by donating to popular charities to counteract their bad public images. This was a reactive approach focused on minimizing harm to the company's reputation rather than preventing problems from happening in the first place. According to Aras and Crowther, the second stage in the corporate social responsibility movement began when companies began to adopt a more proactive approach.
Proactive companies cultivate good relationships with their stakeholders to build value over time. For example, rather than viewing environmental activists as a threat the way an obstructionist or defensive company would, a proactive company works to build partnerships with environmentalists to gain the benefit of their ideas and expertise. By partnering with environmentalists the company can prevent environmental problems that could lead to protests or legal action, and may even be able to save money by developing more efficient production or energy consumption practices.
Even if a company treats its own employees well and follows best practices for employee safety, it can still run into trouble if one of its suppliers does not. An industrial accident at a supplier's factory or a protest against working conditions can damage a company's reputation even if it was unaware of any problems. Rather than investigating supply-chain issues after a complaint, the way an accommodative company would, a proactive company would set clear standards for its suppliers ahead of time and develop a system to ensure accountability.
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