OutlookCSR has gained prominence ag

Outlook
CSR has gained prominence against a backdrop of relative economic stability and growth. However, the trend of global economic cycles means that this pattern of growth will at some point slow down, and possibly go into recession. If any downturn is compounded by global insecurity as a result of increased conflict, the further development of CSR will be serious challenged, in particular its ability to go beyond being a philanthropic add-on and move into the core of business strategy. CSR is a process that has been driven by globalization, deregulation and privatisation. For TNCs it is an outcome of public pressure arising from their operations in developing countries in relation to human rights, environmental pollution and labour issues. To date, CSR has been a Northern phenomenon in terms of its language and strategy. However, there is an abundance of evidence that ‘silent’ CSR is thriving in developing countries, albeit under a different name and with a different approach. There are some concerns that CSR has not focused enough on addressing issues of poverty, but the emergence of new partnerships with aid agencies, the UN and NGOs offers the opportunity to refocus that approach. In particular the role of business associations, both mainstream and those from the CSR movement, have an important part to play in creating a multiplier effect. For SMEs, the picture is still unclear and could go either way. What does seem clear is that CSR will be used as a way of rationalizing the supply chains of TNCs. This raises questions of the parameters of TNC responsibility in the areas in which they operate. If a company’s strategy is to reduce the number of its suppliers or if its actions are putting many local SMEs out of business, then if CSR is to mean anything, the company must address the negative outcome of its interventions. However, the key question is how to move into a third generation, even if the second generation is still in its infancy. The reason why jumping to this question is so important is that CSR will flounder when the expectations put upon companies, be they TNCs or SMEs, to solve such problems as poverty are not met. A parallel process needs to take place whereby CSR melds into core business strategy, while the external market and public policy environment is adapted in order to make real change. This can best be achieved through civil governance processes at all levels and the positive ‘virus effect’ that best practice CSR can have in shifting the market so that it is realigned to achieve sustainability.