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CSR Becoming more Important in Outsourcing Contracts

by: Karen Cayamanda

Monday, March 15, 2010 |

Wikipedia defines corporate social responsibility (CSR) as "a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its adherence to law, ethical standards, and international norms". In other words, it refers to how companies manage business processes to maximize positive impact and reduce risks to society and the environment.

Service providers focus on CSR to win outsourcing deals

In a recent electronic survey by the International Association of Outsourcing Professionals (IAOP), 71 percent of respondents think that CSR is becoming more important in outsourcing contracts. The study further shows that small and medium-sized service providers aim to increase CSR activity, and 70 percent of outsourcing buyers and providers said they will increase their CSR efforts in the next three years. According to IAOP Chairman Michael Corbett, "If companies want to win in outsourcing deals, they have to be focusing on CSR practices that are good for people, the community, and the environment."

Here are other key findings of the IAOP survey:

  • Many service providers focus on corporate social responsibility encompassing activities in HR, community involvement, and environment.
  • A significant number of buyers may take the CSR capability of a service provider into account when it comes to making an outsourcing decision.
  • For buyers, employee practices, specifically fair operating practices and human rights, are more important CSR criteria than consumer, environmental, and community involvement.
  • India was considered as the world's most popular developing region that buyers outsource to as a social responsibility.

Much has already been said about CSR. Some may say that part of it is philanthropy, while others may see it as something done to make a better impression. While businesses from different parts of the world have varying perceptions of CSR, it all comes down to implementing work and employee practices that are not only good for business but also lead to positive effects to humankind and the environment.

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