CSR Considerations When Implementing Change (VCE SSCE Business Management): Revision Notes

CSR Considerations When Implementing Change

What is corporate social responsibility?

Corporate Social Responsibility (CSR) refers to how businesses operate ethically while contributing positively to society. The World Business Council for Sustainable Development defines it as "the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families and the local community and society at large."

CSR is fundamentally about building meaningful relationships between businesses and the wider community. When a business adopts CSR practices, it ensures its operations meet or exceed the ethical, legal, commercial and public expectations that society has of business. This includes making moral and ethical decisions that help achieve broader societal values, not just profit maximisation.

Why CSR matters when implementing change

Whatever the size and type of business, CSR principles should be considered in all aspects of operations. CSR has become increasingly important, with a growing expectation that businesses will go beyond simply providing products and services. Australian consumers in particular feel strongly about CSR, with research showing many are willing to switch brands to support businesses that benefit community and global causes.

When a business implements change, this presents a critical opportunity to introduce or expand CSR practices. Change initiatives can impact various areas of the business where CSR is relevant, so managers must ensure that social responsibility is considered throughout the transformation process. Implementing change allows businesses to reset their approach and strengthen their commitment to ethical, sustainable practices.

This means strategic decisions during change must be based on more than just economic factors.

Stakeholder perspectives on CSR

All stakeholders have a vested interest in how businesses approach corporate social responsibility. Understanding these perspectives helps businesses make better decisions when implementing change.

Employees

Most employees want to work for businesses that practise CSR. This goes beyond fair pay and good working conditions—employees increasingly seek opportunities to contribute to their community, such as through volunteer work organised by their employer. When change is implemented, employees want to see that the business maintains or strengthens its commitment to social responsibility. This can affect employee morale, motivation and retention during transformation.

Managers

Many managers want to work in businesses that contribute beyond profit and allow them to make a positive impact on others. This is particularly true for younger managers who prioritise purpose alongside career progression. CSR considerations in change management can help attract and retain talented managers who want their work to have broader meaning and social value.

Customers

Customers increasingly make purchasing decisions based on a business's social responsibility. They want to buy goods and receive services from businesses that contribute to society beyond the provision of products. When a business implements change, customers watch carefully to see whether CSR commitments are maintained or improved. Customer loyalty can be strengthened or damaged depending on how well the business demonstrates social responsibility during transformation.

Community

There is a clear expectation that businesses will contribute to and improve the wellbeing of society. The broader community expects businesses to consider public interests and opinions when making decisions, particularly during major changes. This includes environmental impact, local employment, community support programs and ethical practices. Businesses that ignore community expectations during change risk reputational damage and loss of their social licence to operate.

Suppliers

Suppliers increasingly align themselves with businesses they see as being socially responsible. This helps enhance their own reputation and contribution. When a business implements change, suppliers want to understand how CSR considerations will affect their relationship with the business. Many suppliers are prepared to meet higher ethical standards if the business they supply demonstrates genuine commitment to CSR.

The triple bottom line framework

The triple bottom line is a framework that measures business performance across three interconnected dimensions:

People: This encompasses the social impact of business operations, including employee wellbeing, fair labour practices, community engagement and broader social contribution. Businesses must consider how their activities affect workers, families and communities.

Planet: This covers environmental responsibility, including minimising waste and emissions, reducing environmental impact, supporting sustainable practices and examining ways to adopt greener technology. Businesses need to actively work to reduce their ecological footprint.

Profit: While financial performance remains important, it should not be pursued at the expense of people or planet. Profit needs to be generated sustainably and ethically, supporting long-term viability rather than short-term gains.

CSR considerations when implementing change

When implementing change, businesses can adopt or strengthen CSR through several key approaches. Each of these provides an opportunity to demonstrate commitment to social responsibility while transforming the organisation.

Vision and mission statements

Vision and mission statements are the foundation of business strategy, driving policies and practices throughout the organisation. If a business wishes to increase or enhance its social responsibility when implementing change, this should be explicitly embedded in these core statements. This allows all stakeholders—employees, customers, suppliers and the community—to understand which values are important to the business.

Strong vision statements communicate CSR commitments clearly. For example:

• IKEA's vision to "create better everyday lives for as many people as possible" signals a commitment beyond profit
• Unilever's aim to "make sustainable living commonplace" explicitly prioritises sustainability
• Google's vision "to organise the world's information and make it universally accessible and useful" emphasises broad social benefit
• The Commonwealth Bank's commitment "to build the capability of customers, businesses and communities through education, financial and digital literacy programs" demonstrates focus on social development

Code of ethics and conduct

A code of ethics is a set of principles designed to help people within the business conduct themselves honestly and with integrity. Many businesses implement codes of ethics not only for their own operations but also for stakeholders such as suppliers. Change implementation provides an ideal opportunity to review and strengthen these codes.

Codes of ethics typically cover areas such as:

• Honest and ethical conduct in all business dealings
• Fair treatment of employees and customers
• Prohibition of forced labour and child labour
• Commitment to paying fair wages
• Environmental responsibility
• Transparent reporting and accountability

For example, Westpac Group has a code of conduct that sets out standards expected of employees and contractors in their work. This helps ensure consistent ethical behaviour across the organisation.

Supplier codes of conduct are particularly important for businesses that source products internationally. Cotton On, for instance, has implemented an Ethical Sourcing Program with formal Rules to Trade. This supplier code governs sourcing, manufacturing and supply of products, protecting human rights and the environment while strengthening supplier relationships. The company conducts regular factory audits, worker interviews and training programs to ensure compliance. This commitment has been recognised through high gradings in Baptist World Aid's Ethical Fashion Report.

Employment and human resource policies

Employment practices are a critical area for CSR consideration during change implementation. Businesses need policies in place to support employees and ensure socially responsible operations. This includes anti-discrimination policies, anti-bullying measures and whistleblower protections that ensure employees are supported and protected.

Progressive employment practices can also extend to recruitment and selection. The Body Shop Australia has pioneered "open hiring" for Christmas casual positions, which removes traditional barriers to employment. Instead of requiring resumés, references, background checks or formal education, candidates need only answer three simple questions: whether they are legally authorised to work in Australia, can lift up to 11 kilograms and work an eight-hour shift, and are happy to work with customers.

This approach targets people who have traditionally faced employment barriers, including those who have experienced homelessness, young carers, First Nations Australians and single parents. The Body Shop works with organisations such as Launch Housing, Little Dreamers, Good Shepherd and APM to target potential candidates. This demonstrates how change implementation can provide opportunities to enhance CSR through more inclusive employment practices.

When implementing change, businesses should review their employment policies to ensure they:

• Promote diversity and inclusion
• Support employee development and retraining where roles change
• Protect employee rights and wellbeing
• Provide opportunities for community contribution (such as volunteer programs)
• Ensure fair and ethical treatment of all workers

Corporate philanthropy

Corporate philanthropy involves businesses giving back to their community through charitable donations of money, time, expertise and goods. This can operate at local, regional, national or international levels. Many businesses consider philanthropy a core part of their CSR measures and use change implementation as an opportunity to introduce or expand their charitable activities.

In 2020, Australian businesses broke philanthropic records, with the GivingLarge report showing that $1.1 billion was donated—17 per cent more than the previous year. Leading contributors included BHP, Coles and the Commonwealth Bank. Much of this funding focused on education, health, social welfare, and emergency and disaster relief.

Corporate philanthropy can take various forms:

• Financial donations to charities and not-for-profit organisations
• In-kind donations of products or services
• Employee volunteer programs
• Matched giving schemes where businesses match employee donations
• Long-term partnerships with charitable organisations
• Pro bono professional services

The technology company Canva demonstrates an innovative approach to corporate philanthropy. The founders, Melanie Perkins and Cliff Obrecht, committed to giving away most of their wealth (estimated at $16.5 billion) to solve global problems. Their two-step plan is to become one of the most valuable companies in the world and to do the most good possible. This "give-as-you-go" approach represents a new model of corporate philanthropy where businesses build social contribution into their core strategy from the start, rather than waiting until they have accumulated wealth.

When implementing change, businesses can:

• Establish or strengthen philanthropic programs
• Involve employees in selecting charitable causes
• Create partnerships with community organisations
• Build philanthropy into the business model
• Communicate their charitable activities to stakeholders

Impact of CSR on businesses during change

When businesses implement change with CSR considerations in mind, this creates several impacts across the organisation:

Employee roles and development

Employees may find their tasks and jobs are modified due to CSR considerations. For example, if a business adopts more sustainable production methods, workers may need retraining to use new equipment or follow new processes. Businesses must support employees through these transitions with appropriate training and skill development programs. This ensures employees can adapt to new ways of working while maintaining job security and satisfaction.

Recruitment and talent attraction

Many job candidates now consider a business's reputation and CSR commitment when deciding where to apply. Businesses implementing change may need to modify their employment practices to attract and retain talent who value social responsibility. This could include offering volunteer opportunities, demonstrating commitment to diversity and inclusion, or highlighting environmental initiatives. Businesses with strong CSR credentials often find it easier to recruit high-quality candidates who want their work to have positive social impact.

Supplier relationships and supply chain management

Relationships with suppliers are likely to change when CSR is prioritised during transformation. Businesses may need to implement codes of conduct for suppliers, conduct audits of supplier practices, or shift to suppliers with stronger ethical and environmental credentials. This can require significant effort to establish new relationships and ensure compliance, but it strengthens the overall ethical integrity of the business and its supply chain.

Codes and standards

Businesses implementing change need to establish or update codes of conduct and ethics. This requires consultation with stakeholders, clear communication of expectations, training programs to ensure understanding, and monitoring systems to ensure compliance. While this requires investment of time and resources, it creates clarity about expected standards and helps prevent ethical breaches.

Community and environmental impact

Businesses must consider how their processes and operations affect the local community and broader society. This might involve conducting environmental impact assessments, engaging with community stakeholders, modifying operations to reduce negative impacts, or investing in community development programs. Change provides an opportunity to reduce environmental footprint and strengthen community relationships.

Operational changes for sustainability

Businesses need to examine ways to reduce waste and emissions to support greener technology and practices. This might require investment in new equipment, modification of production processes, or adoption of circular economy principles. While this can involve upfront costs, it often leads to long-term cost savings through improved efficiency and can strengthen competitive advantage as sustainability becomes more important to customers.

Exam focus: Analysing CSR in change implementation

When analysing CSR considerations in exam questions, ensure you:

For 'describe' questions:

• Clearly explain what CSR is and how it relates to the specific change
• Identify the specific CSR considerations relevant to the scenario
• Use appropriate business terminology

For 'explain' questions:

• Describe the CSR consideration
• Link it to the specific change being implemented
• Show cause-and-effect relationships
• Use business examples to support your explanation

For 'analyse' questions:

• Break down the CSR considerations into components
• Examine how each affects different stakeholders
• Consider both positive and negative impacts
• Use the triple bottom line framework to structure your analysis
• Link to specific aspects of the change being implemented

For 'evaluate' questions:

• Make a judgement about the effectiveness of CSR considerations
• Consider both strengths and limitations
• Weigh up costs versus benefits
• Consider short-term versus long-term impacts
• Reach a supported conclusion about whether the CSR approach is appropriate

Real-world examples