Corporate Social Responsibility and Managerial Control System

ACCA P5 Advance Performance Management

This article only outlines very few key terms from articles below (links provided below) on CSR and Sustainability. For detailed case study visit the link.

Corporate Social Responsibility (CSR): CSR is implied (to mitigate risk and create value) and philanthropic responsibility of an organisation towards the society where it exists for its own sustainable development.  

Management Control System (MCS): MCS is monitoring and overseeing process implemented by management to supervise and manage any running operations to achieve optimal output.

Types of CSR

Ø  Responsive (Operational) CSR – CSR programs like 3R plus program = Reduce, Reuse, and Recycle Plus Rethink under operation to mitigating existing potential harm creating CSR boundaries of firm’s operation is responsive CSR. Diagnosis system of CSR is used to monitor existing CSR activities programs using different performance measurement systems.

o   Performance Measurement System – At operational level performance is evaluated using KPI’s and targets.

Ø  Strategic CSR – It incorporates believes and values of social responsibility into organisational culture and strategy. Interactive system in strategic CSR discuss on initiative that confer competitive advantage and benefit society and as well assist in selection and implementation of strategic CSR program.

o   Education on Sustainability (incorporation into belief and vision)

§  Sustainability drivers

·         Compliance with legal and regulatory requirements

·         Managing risk to the reputation of your company/brand(s)

·         Achieving competitive advantage and long-term profitability

·         Efficiency and cost savings

·         Value set of company and/or its leaders

·         Customer demand for green/sustainable products

·         Public scrutiny over labor, sourcing, or other business practices

·         Employee attraction and retention

·         Supply chain vendor requirements

·         Government grants or other incentives

Triple Bottom Line (SEE  = Social, Economic and Environmental) Reporting / Sustainability reporting deals with issues discussed under strategic CSR and responsive CSR and reports on issues of changes in strategic beliefs and values, operational performance and achievement of targets.

Corporate Social Responsibility and Innovation in ManagementAccounting

Evolution of Corporate Sustainability Practices