How the corporations should navigate their Corporate Social Responsibilities (CSR) in the time of pandemic? In the regular days, corporations normally conduct their CSR activities by reaching out to the deprived communities and helping them out through financial, medical, educational, and many other types of assistance.
However, the emergence of Covid-19 has already crippled the survival of many corporations around the world and Bangladesh is no exception. Country’s by far the largest exporting ventures RMG and footwear being at the top of the hit list, other organisations are also being affected badly. In many cases, orders are being cancelled by global brands. In some cases, local consumption has slowed down abruptly. From the poultry to the food industry, financial institutions to shopping malls, manufacturing industries to the construction business, every sector is shattered to its core by the impact of this pandemic.
Now, what measures, the CSR activities should be implemented in this completely changed scenario by the corporations? Before exploring further options, it has to be mentioned that the funding in CSR around the world is going to be significantly lower than the usual times. In the last fiscal year, the total CSR fund disbursed only by financial institutions (banks and NBFIs) in Bangladesh was TK 4.47 billion which was 45.0 per cent higher than the previous year. But the scenario is going to be different this time for most of the corporations in any sector due to the impact of Covid-19. On the other hand, never has the society sought the corporations to share its responsibility so urgently. This leaves the corporations in a complicated scenario where the CSR fund will drop but the corporations have to take care of more social responsibilities than usual. For the organisations those have social responsibilities as a core value, it is going to be the changed business approach, not the fund allocated for CSR that would define how the corporations remained committed to taking social responsibilities.
While fighting on the economic front during this pandemic, a country like Bangladesh must not create a new influx of unemployed people. Remittance nose-diving and Bangladeshi workers around the world are already at risk of being returned. Along with that, another local surge of unemployment may destroy social-economic balance here. In the present context, every worker losing their job means another three to four peoples’ lives may fall into uncertainty. The government is crumbling to ensure food for people who live on the informal economy or just as a day labourer. Now if the government has to take the burden of newly unemployed people and their families, it would be chaos. Here, Most of the business organisation may not afford to do much for the first case, but they are the leading players in ensuring that a new influx of unemployed people is not created. If it can be made sure of the survival of the top business houses during this Covid situation without laying off any significant number of employees, that would be a big CSR act done by these corporations in Bangladesh.
For every business organisation, there are four fundamental stakeholders: customers (buyers and consumers), suppliers and service providers, investors and banks, and lastly but most importantly human resources. If a corporation wants to save its workers during the ongoing pandemic, it must take careful steps with the other stakeholders ensuring an Employee First approach. Revenue for every organisation may go down but the customers need to come forward to ensure that a minimum amount of demand is placed at the factories and the product pricing remains as much as closer to the pre-Covid world. Recent reports published at Forbes and several other top global newspapers have showcased the unfortunate cases of our RMG and footwear exporters since many global brands are negotiating with them to take half the committed payments for already delivered products. This by no means falls into the ethical standard and social responsibility that global brands advocate for. This may force the factory owners to go for lay off soon or complete shutdown. On the other hand, few other brands have come forward to rescue their suppliers, placed the partial orders, and already started a small number of advance payments which would provide just enough kind of breathing space for the factory owners to sustain their workforce for just a few more months. Now, each of these corporations has suppliers of their own; they need to take the same positive approaches to help their suppliers to a minimum level so that they can also sustain without reducing their manpower.
Cost optimisation from all corners must be driven with the key intent to safeguard the employees. Neither maximising profit nor creating advantages over competitors should be the top priority of cost management now. Sharing common resources in different areas, even by competitive companies can reduce their operational expenditures which eventually will help them to sustain in this troubled time. The corporations normally have business diversification in their houses, which ensures if some of the business units go through a bad patch other business units remain in good shape. In this pandemic time, these business units must continue to help each other, make their strategy together to help out the corporation as a whole, and most importantly enable it to withhold the employees. Even if the cost optimisation requires a reduction in overall employee benefit expenditure, it should be done in a sophisticated and sensible way respecting the law of the land. Recently in an article in The Wall Street Journal, it was expressed that the policy to contain employees in a relatively lower pay-check in this pandemic time have enabled many USA companies to reduce the number of job losses significantly and also distributed the financial stress among employees across the organisation at a bearable level. While taking such actions it is important to consider the financial strengths of the different impacted groups, say, for example for a lower-tier employee, a small percentage of reduction in monthly income will drastically impact the family at this tough time. But once again, the management must communicate to its employees that all these measures are just temporary and taken for the greater benefits of the employees. Without loud and clear communication, any decisions like these may create more confusion among the employees and can exponentially complicate the scenario.
There are examples within the country, where employees would be willing to sacrifice a great deal for his/her employers because there is a bond of trust between them. This pandemic presented a great opportunity for the corporations to showcasing their true commitment to their employees and thus to society. Following the major steps like negotiating with the customers in the right way, optimising operational costs through resource sharing and process improvements, coordinating between different business units of the corporation for sustainability and most importantly incorporating employees as a key stakeholder for finding the solution to survive this pandemic as a family, will take the corporations in the right direction. If they can provide the confidence to their employees, that no matter what, they will do whatever necessary to safeguard their employees, it would create a long-term permanent bond between the corporation and its employees. This could be the key factor for those corporations to achieve sustainable success in the post-pandemic era.
Article Credit: globaltimes