By Ben K. Gwamaka – Art in Tanzania internship

Introduction: Corporate Social Responsibility in Tanzania:

• Corporate social responsibility (CSR) is a topic of increasing importance in studies of business operations, not only in developed countries but also in developing countries.

• In Tanzania, Corporate Social Responsibility (CSR) is widely understood as philanthropy (doing well with part of the profit) and thus refers to charitable community support projects in most cases.

• In the contemporary global business environment, CSR generally refers to sustainable business performance, i.e., the principle of generating profit in a socially and environmentally responsible manner. Community involvement and development are part of this, but other aspects, such as labour practices and human rights, environmentally friendly production methods, and fair and transparent operating practices, are equally important.

• CSR serves as an essential strategy in building a modern business. We hear that big companies are adopting more communally accountable behaviour towards their environment, i.e., the society at large. Firms should sometimes engage in activities that benefit employees, suppliers, customers and society at large, even if those activities reduce the present value of the cash flows generated by the firm.

Positive impacts of implementing CSR in corporations:

  • CSR helps the business adapt to its business environment and other surrounding changes. These changes incorporate CSR-related business drivers and risks, such as socio-economic pathways, eco-technological innovations, consumer and NGO pressures, and internet-fueled awareness of CSR issues among mass populations worldwide.
  • CSR offers partnering, networking and coalition-building advantages for business. This includes relationship-building, trust-building, and expertise-sharing business advantages through participation in cross-sectoral, multi-stakeholder initiatives involving governments, NGOs, and businesses.
  • Meeting employee and customer needs has multiple business benefits, including attracting and retaining top employees and customers, developing customer brand awareness and loyalty, and broadening management and staff perspectives and expertise.
  • CSR can also be aimed at improving governmental, regulatory, and community relations as a means of forestalling societal demands for additional business regulation, as well as securing political and legal advantages over competitors. This includes enhancing links with local communities and governments in both home and host countries of operations, and building community trust and goodwill, both generally and to facilitate community support for specific business activities.
  • As corporate reputation and brands are increasingly influenced by external assessments from shareholder representatives, investment institutions, analysts, corporate ratings and advisory bodies, and NGOs, another benefit for businesses lies in meeting CSR-related investment decision-making, project financing, corporate rating, and public interest criteria.

Challenges that are faced by the companies in the implementation of CSR:

  • Management of Funds

The companies have been experiencing mismanagement of funds of the funded projects, especially when local contractors are hired. This is because many contractors take it that the donor is a multinational company, and hence, refunding is easy since the company has a lot of capital.

  • District Contribution

The companies have been experiencing little support, especially in project inspections, as it is taken for granted that since the company funds the projects, the company has enough to spend and refund the projects, and hence, that is taken as an opportunity to save money for these districts.

  • Financial borrowing institutions

The companies noticed that the established small scale borrowing from financial centers (VICOBAs), suffer from non-return of finances on a timely basis and some suffer from no return. This is because many borrowers from these communities have a perception that the money is a charity giveaway.

  • Parents’ support

 The companies have been experiencing a decline in the class performance of the sponsored students due to very little support from the sponsored students‟ parents. This is due to the fact that the parents alienate themselves from their previous supervisory roles and leave most of the load to be carried by the company.

  • Dishonesty and corruption

The company has been experiencing several tenders and projects being awarded to local contractors and service suppliers based on corruption (10% kickbacks) and this has resulted in several projects being substandard as there is a close conspiracy between the District Executives and the Local Contractors.

  • Construction works

The company has been experiencing several construction projects that local engineers have overpriced, and some of the buildings have not met the standard.

Measures taken to overcome the challenges:

After the company faced several challenges in implementing its CSR, it developed various solutions to address these challenges, ultimately enhancing the success of its strategy.

  • Educational training for small-scale borrowers.

The companies managed to avoid the challenge of non-return of borrowed money from the “VICOBAs” by facilitating training and providing seminars to these borrowers on proper money management and profit, thereby avoiding direct financial assistance as they had previously.

  • On the Construction works

As companies have been experiencing several construction works not meeting standards, they have developed a solution to inspect these community development construction-based projects by hiring independent engineers to conduct inspections and utilising their engineers to produce reports on the quality and standard of the projects.

Possibility of Missed Opportunities if there was no CSR in the Companies:

The companies would have missed several opportunities had there been no CSR in their company, which includes the following

  1. Environmental Improvement.

In 2013 and 2014, the groups and projects funded by companies to create environmental awareness and conservation wouldn’t have existed. As a result, there would probably have been more environmental-related cases resulting from degradation, pollution, and a lack of environmental awareness education.

  1. Poverty reduction

 Had the companies lacked a CSR policy, it would have missed the opportunity of lifting up the livelihoods of the people who live in the communities where the companies conduct their business.

  1. Health Service Improvement

Had the companies not had a CSR policy, the marginalised communities would have had a health crisis that could have increased mother-to-child deaths.

  1. Education improvement

Several schools wouldn’t have been renovated and constructed, and students wouldn’t have received scholarships, resulting in a decline in education in the communities that were once regarded as marginalised.

  1. Employment of Locals

The locals who have been employed in the companies and projects carried out under the name of “Community Development Projects” wouldn’t have been created, and their livelihoods wouldn’t have been improved.

Conclusion:

  • The fact that national and multinational companies have a substantial impact on society and the environment implies that they must consider the sustainability of their business approaches. In the current scenario, customers and other stakeholders are becoming increasingly responsible and mindful of environmental and social issues, thereby taking greater account of sustainability concerns in their purchasing decisions. To establish long-lasting relationships with their stakeholders, both in general and specifically with their customers, companies must interpret and manage the growing stakeholder awareness, aligning their business activities accordingly. Thus, it is vital for companies to compare their declared CSR commitment to the degree of CSR efforts that customers (or other stakeholders) perceive and expect from the company.

References:

  • Abdellatif, M., & Othman, A. (2011). Partnership for integrating the corporate social responsibility of project stakeholders towards affordable housing development: A South Africa perspective. Journal of Engineering and Technology, 9(3), 273–2
  • United Republic of Tanzania. (2009). Review of productivity and competitiveness profiles of the sector across productive sectors in Tanzania. Dodoma, TZ: President’s Office Planning Commission.
  • Anwar, F. (2013), Corporate Social Responsibility: Profiting with Conscience, http://csrc.org.pk/wp-content/uploads/2011/08/csr-profiting-withconscience.pdf retrieved on Wednesday, 28 February 2013

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