What do we mean by the term responsible enterprise?

The term ‘Responsible Enterprise’ refers to a wide range of beliefs, behaviours and outcomes that organisations can identify with and pursue…

This is the word cloud that emerged from consultation with staff in the St Andrews School of Management (2014):

Credit: Jennifer Kerr
Credit: Jennifer Kerr

Extract from School of Management’s strategy 2010:

‘We will pursue a strategy of focusing our activities, identity and marketing around the concept of responsible enterprise. This entails an ethical approach to managing within organisations, the impact of human enterprise on the environment, the interaction between forms of investment and social and organisational impact and the need to foster creativity and development.’

Definitions: Responsible and Enterprise

Definitions from the Oxford English Dictionary

Responsible

  • Being in charge of something; appointed to look after something.
  • Being the primary cause of something and so able to be blamed or credited for it.
  • Capable of being trusted.
  • Capable of fulfilling an obligation or duty; reliable, trustworthy, sensible.
  • Having an obligation to do something.
  • Having control over or care for someone, as part of one’s job or role.
  • Having to report to (a superior) and be answerable to them for one’s actions.
  • Involving important duties, independent decision-making, or control over others
  • Morally accountable for one’s actions; capable of rational conduct.
  • Of a role or position: involving a high level of responsibility, accountability, or obligation.

Special use

“responsible government: government which is accountable to the people; spec. a political system in which governments and individual ministers are drawn from and accountable to parliament, esp. the lower house, rather than to a monarch or similar power.”

Enterprise

(note: This is one of the earliest 15% of entries recorded in OED)

  1. A business venture, private or public.
  2. A commercial or industrial undertaking, esp. one involving risk; a firm, company, or business.
  3. A design of which the execution is attempted; a piece of work taken in hand, an undertaking; chiefly, and now exclusively, a bold, arduous, or momentous undertaking.
  4. A project or undertaking, especially a bold or complex one
  5. Any business organization.
  6. Disposition or readiness to engage in undertakings of difficulty, risk, or danger; daring spirit.
  7. Industrious, systematic activity, especially when directed toward profit
  8. Initiative and resourcefulness
  9. Initiative or willingness to take risks or to take responsibility
  10. The action of taking in hand; management, superintendence.
  11. The combination of initiative, foresight, and willingness to take risks required to make a success of running a business.
  12. The name of a fictional spacecraft; a prototype space shuttle.

Special use

“Enterprise culture n. a model of capitalist society which specifically emphasizes and encourages entrepreneurial activity and speculation, financial self-reliance, etc.”

Other terms linked to responsible enterprise

Corporate responsibility

Corporate social responsibility

Corporate citizenship

Sustainability

Stakeholder management

Corporate governance

Corporate philanthropy

The business society compact

Business ethics

Source: Charles Lovatt and Lorna Stevenson, School of Management, University of St Andrews.

One of the most commonly used terms is Corporate Social Responsibility:

What do people understand by the term Corporate Social Responsibility?

According to Ashridge Business School research, there are 7 main areas of Corporate Responsibility activity, subdivided into classes of activity:

Area 1: Leadership, vision and values

  • Defining and setting the corporate purpose, values and vision
  • Translating this into policies and procedures
  • Putting it into practice, Including empowering and embedding
  • Ethical leadership and championing

Area 2: Marketplace activities

  • Responsible customer relations, including marketing and advertising
  • Product responsibility
  • Using corporate responsibility product labelling
  • Ethical competition
  • Making markets work for all

Area 3: Workforce activities

  • Employee communication and representation
  • Ensuring employability and skills development
  • Diversity and equality
  • Responsible/fair remuneration
  • Work-life balance
  • Health, safety and well-being
  • Responsible restructuring

Area 4: Supply chain activities

  • Being a fair customer
  • Driving social and environmental standards through the supply chain
  • Promoting social and economic inclusion via the supply chain

Area 5: Stakeholder engagement

  • Mapping key stakeholders and their main concerns
  • Stakeholder consultation
  • Responding to and managing stakeholders
  • Transparent reporting and communication

Area 6: Community activities

  • Financial donations
  • Volunteering employee time
  • Giving gifts in kind
  • Being a good neighbour

Area 7: Environmental activities

  • Resource and energy use
  • Pollution and waste management
  • Environmental product responsibility
  • Transport planning

Questions you might want to consider:

  • Should companies be allowed to choose which issues to address?
  • Which of the above activity areas do you think are most important for companies to tackle?
  • How can companies set about prioritizing the areas of activity in which they should get involved?

Supporting/further information:

European Commission Survey

Corporate social responsibility (CSR), defined by the European Commission as “the responsibility of enterprises for their impacts on society”, underpins the Europe 2020 objectives for “smart, sustainable and inclusive growth.”

The European Commission undertook a survey on people’s understanding of Corporate Social Responsibility in the 27 Member States of the European Union and in Croatia, Israel, Turkey, Brazil, the United States, China and India.

These are the main findings:

Just over half of European citizens believe that companies have a positive influence on society, while more than 4 out of 10 believe companies have a negative influence. Europeans are more sceptical about the influence of
companies than citizens from other major economies.

Europeans are divided about whether the overall influence of companies is positive or negative – 52% think that the overall influence of companies on society is positive, while 41% think it is negative.

  • When compared with the EU, respondents living in non European countries are much more likely to be positive about the overall influence of companies on society. For example 79% of Brazilian respondents think that companies have a positive influence on society.
  • There is, however, a wide diversity of views across EU countries, from the 85% of respondents in Denmark who think the influence of companies on society is generally positive, to 36% of those in Italy and Slovenia.
  • Opinion is divided as to whether companies pay more or less attention to their influence on society than they did 10 years ago: 40% of Europeans say they pay more attention, while 39% say they pay less attention.
  • Respondents in non-European countries are generally more optimistic about how much attention companies pay to their influence on society, with more than half in Brazil (74%), China (65%), India (62%) and Turkey (57%) saying companies pay more attention.

Food production and agriculture companies (70%), and retail companies and supermarkets (67%), are the most likely to be seen as making efforts to behave in a responsible way towards society by Europeans. Finance and banking, and mining, oil and gas companies are the least likely to be seen as making these efforts (both 34%).

Europeans are more likely to think Small and Medium-sized Enterprises (SMEs) make efforts to behave responsibly compared to large companies.

  • European respondents are much more likely to say that small and medium sized companies (71%), rather than large companies (48%), make efforts to behave in socially responsible ways.
  • Respondents living in the EU and the US are the only ones who are more likely to think that small and medium companies are making efforts to behave responsibly towards society compared to large companies. In Brazil, India and Turkey the situation is reversed, with respondents more likely to say that large companies are making these efforts. In China the proportions for both large and small/medium companies are the same (68%).

More than half of Europeans who work at a company say their company has taken measures they consider effective to behave in a socially responsible way (53%), although respondents in the US are the most likely to say this (67%).

There is an information gap in Europe: Although 79% say they are interested in what companies do to behave in a responsible way, only 36% say they feel informed in this area.

  • Just over one third of Europeans (36%) say they feel informed about what companies do with regard to socially responsible behaviour whereas 62% say that they do not feel informed.
  • This does not mean Europeans are not interested – 79% say they are interested in what companies do to behave in a responsible way towards society. Respondents in the US are even more likely to be interested (87%).
  • When we combine information and interest, we see that almost one half (47%) say they do not feel informed about what companies do to behave in a socially responsible way, but that they are interested in this information. This compares to China and Turkey where respectively only 10% and 6% say that they do not feel
    informed about what companies do in this area but that they are interested in this information.
  • Respondents in India (69%), the US (63%) and Brazil (57%) are more likely to feel informed about what companies do tobehave in a socially responsible way
    than those in the EU (36%).

In the EU and other major economies job creation is considered to be the most positive impact of companies on society.

  • Europeans consider job creation (57%) to be the most positive influence companies have on society, followed at some distance by contributing to economic growth (32%) and providing training to employees (31%). In all 27 EU countries job creation is the most mentioned positive effectof companies on society, as it is for all the non-European countries.
  • Europeans consider corruption (41%), reducing staff (39%) and environmental pollution (also 39%) as the main negative effects of companies on society. Corruption is much more widely mentioned in India (71%) and China (65%) compared to the EU.

European citizens think that citizens themselves should take the lead role in influencing the actions of companies, through the purchasing decisions they make.

  • Europeans think that citizens themselves should take the lead role in influencing the actions of companies through their decisions about what they buy (49%), followed by company management (40%) and public authorities (36%).
  • Respondents in India (70%), the US (59%), Brazil (45%) and Turkey (29%) are also most likely to think that citizens themselves should take the lead in influencing companies’ actions. Respondents in China, on the other hand, are most likely to mention public authorities (42%).