Corporate social investment

Author                   Smangaliso Zulu
Date                      June 1999
Place                     University of Zululand, Kwa-Dlangezwa, KwaZulu Natal, South Africa
Type of product     Communication Science Honours Assignment
Supervisor             Prof. G.Mersham

Department of Communication Science
 
Introduction
Definition of corporate social investment
Public relations practitioners as "change agents" in the South African context
The concept of third world and first world
The corporate arguments against corporate social investment
The corporate argument in favour of corporate social investment in South Africa 
The evolvement of corporate social investment
The general overview of the South African perspective on corporate social investment
The so-called new partnership
 Conclusion
Bibliography
Case study: Corporate social investment in Richards Bay Minerals (March 1999)
The overview of some of the projects Richards Bay Minerals has been or is involved in

1. Introduction

South Africa has a history of apartheid, which has been a great obstacle towards economic growth. The past government was indifferent to social issues affecting the South Africans, particularly the blacks. Because of this background, it is apparent that South Africa needs programs and projects that that would do away with the social and economic problems incurred from the past government. Thus, in the post-apartheid era, South Africa focuses on such programs as Reconstruction and development programs (RDP), Masakhane and Growth, Economic and Redistribution policy (GEAR) aimed at uplifting the standard of living of its citizens. Big business on the other hand feels the need of meaningful involvement with the communities around them because of unemployment and poverty in the rural areas. They ask themselves as to what are the most effective and sustainable ways of uplifting the people in their area. This therefore brings us to the question of corporate social investment. Clearly, this paper will discuss the question of corporate social investment in South Africa by covering the following themes:
 


 A research case study of one major company in Richards’s Bay that implements corporate social investment would be provided to illustrate how corporate social investment works. This company is Richards’s bay minerals (RBM).

2.Definition of corporate social investment

There are many definitions of corporate social investment each of which displaying different points, objectives and results. Some definitions focus on the expectations of the society. Others tend to focus on specific themes and combinations. Skinner (1994:74) argues that corporate social investment can be seen as the pursuit of economic objectives by an organization but at the same time voluntarily taking into consideration the major concerns, interests and needs of stake holders of the society in which business operates, even though this concern may not immediately directly affect profitability. The act of voluntary suggests that an organization is not obliged to do this. As mentioned above that definitions on corporate social investment differ in many respects, Herman (1981:255) sees corporate social investment the other way round. He insists that corporate responsibility mean business obligation beyond those traditionally assigned, that is, other than producing goods for a profit within a framework of law and customary behavior. Thus he sees corporate social investment as a business obligation not voluntary. Deducing from the above definitions, we can comfortably point out that corporate social investment is management initiated and requires companies to obtain both a business and social benefit from every commitment made to a non-profit or exclusively public institution. Corporate social investment also allows a business to publicly report donations as well as commitments made to non governmental organizations (NGO’s) that often are not taken as charitable tax deductions. Mersham et al (1995:87) choose a normative approach when defining corporate social investment, which define corporate social investment as the allocation of capital to advance people’s social and economic well being. Clearly, corporate social investment is all about uplifting the quality of life of communities aroundwhich an organization is built. Hence, Mersham et al (1995:77) confirms this when he argues that social responsibility includes the organization's involvement in the problems of national significance that face that society.

3.Public relations practitioners as "change agents" in the South African context

Public relations practitioners have traditionally been involved with protecting the image of an organization. There has been a shift from that protective role of Public relations practitioners to a more socially participative role over a couple of years ago. Today's Public relations practitioners play a significant role in social change and social development. Skinner (1994:72) argues that Public relations is a communication phenomenon which is rooted in an understanding of social issues. This implies that Public relations practitioner must understand the needs and interests of the society and communicate them to the management of their organization because they have a direct access to top management and have an advisory role. The set of activities we call Public relations are in their very essence, the fundamental process called communication and all development and social change are dependent on communication-putting people in touch with each other (Mersham et al, 1995:78). By implication, this means that as South Africa is presently at the post-apartheid era, Public relations practitioners have a significant role to play when it comes to programs such as the GEAR policy, Masakhane, RDP as well as CSI. They will have to communicate these programs and projects to the people at the grassroots level, in terms that these people understand and find out their needs and interests to be discussed at the management level of their organization. Skinner (1994:72) also confirms this when he insists that communication must play the integral part in the constructive engagement of post apartheid South Africa. The above argument clearly shows that Public relations practitioners as change agents in South Africa have a much more role to play in social change and development than have traditionally been thought of.

4. The concept of third world and first world

South Africa and many other African countries have a tendency of applying the western techniques and approaches when dealing with their own problems. In South Africa, these techniques and approaches are not suitable for the audience whose realities and problems are African in content and character. The South African audience has distinct experiences from those of the western audience. Only South Africa has experienced apartheid, so how can South Africa readdress the apartheid’s problem through western or first world techniques? Mersham et al (1995:78) argues that the South African Public relations industry has largely and comfortably applied the western cultural norms to our communication strategy and tactics, even though, in many cases the receivers were from African cultural groups. This shows that programs and projects aimed at uplifting the living standard of the South African citizens will not be successful so long as we continue to be Eurocentric in our techniques and approaches. Thus, South Africa needs to be Afrocentric when implementing these programs. Diescho (1996:15) in De Beer (1998:446) summarizes the whole issue when he argues that a quilt of what South Africa wants to be must be woven carefully by piecing together the issues and sentiments that represents the country’s values---South Africa cannot afford to become a little United States or little England. It is an African country whose realities and problems are very African in content and character. As far as the concept of first world and third world is concerned, big industries can help narrowing the gap between the two polarization, it can help bring about the first world’s acceptance of the necessity for accommodation, while at the same time offering the third world a level of advancement within its reach.

5. The corporate arguments against corporate social investment

  In South Africa, there is a great and controversial debate as to the precise extent to which business or organizations should be responsible to their society in which they are built. The critics of corporate social investment point out that corporate social investment is undemocratic because it invests a form of political power in an organization that has not been given the authority to govern (Rensburg et al, 1995:87). Their fear emanates from the fact that organizations who implement the corporate social investment programs take most of the government powers and functions such as building schools, hospitals, job creation, etc. According to these critics this would eventually make an organization to take all the government’s function, thus creating the corporate organization equivalent of the unitary states, where there would be the domination of corporate values and whereby every man in the society become an organizational man. In South Africa, this issue is confusing and complex because on one hand, South Africa is faced with severe problems which all emanated from the apartheid era. On the other hand, big business is facing the increasing pressure from the society to help them.

6. The corporate argument in favour of corporate social investment in South Africa

As South Africa is trying to recover from the apartheid system, which has been a major obstacle to economic growth, corporate social investment can play a significant role in this recovery process. The South African government does not have enough power, resources to save its citizens from social and economic problems. In Mersham et al (1995:95) Wagner argues that the only institution capable of saving South Africa from economic and social breakdown is business. Late minister of housing, Joe Slovo also shared the same sentiments when he argued that there can be no better time to address the subject of corporate social investment because it undoubtedly has a key role to play in promoting a genuine social commitment by business as the nation undertakes the challenge of the reconstruction and development program. This clearly points out that corporate social investment in conjunction with the RDP can save the country from economic and social problems and help in the creation of job opportunities, which is desperately needed by the South Africans. On the side of the business, social involvement or investment can mitigate against strikes, sanctions and boycotts because of their indifferent to social matters, thus social investment can be viewed as the future provision of the organization's well being.

7. The evolvement of corporate social investment

The post-apartheid era has made businesses to restructure themselves in order to adapt in this era and while they are restructuring, there comes corporate social investment, thus bringing confusion and difficulty to the restructuring process of the business. This shows that corporate social investment has evolved when the business sector has been not yet ready to fully implement it, but it has no choice other than to accommodate this program. This is also confirmed by Mersham et al (1995:82) when he argues that there is a growing acceptance that the survival of an organization is dependent upon its being seen as socially accountable-that it can rise above immediate economic interests and anticipate the impact of its actions and operations on all individuals and groups. In order for business to engage in a socially responsible role, they need to be fully furnished with all the necessary information on issues and steps involved in the implementation of corporate social investment. This therefore requires a Public relations practitioner to clearly states the needs and interests of the society and communicate them in a way that business people would agree to implement corporate social investment.

8.The general overview of the South African perspective on corporate social investment

In the South African context, corporate social investment has a slightly different meaning as compared to other countries. This is the case because of apartheid policies that created division among the South African citizens. Clearly, South Africa is divided into two opposing camps as far as corporate social investment is concerned. On one hand, are there business people who argue that corporate social investment is not an admission of guilt for what they have done to the deprived people. On the other hand are the emerging black leadership of disadvantaged communities who insists that corporate social investment is the form of readdress of the inequalities of the past. With regard to the above argument, one need to point out the voluntary nature of corporate social investment which make the argument of the emerging black leadership of disadvantaged communities to be slightly invalid if not completely. Skinner et al(1995:88) maintains that social responsibility should be perceived as the national development philosophy and argues that social investment calls for the acceptance of the idea that an organization is socially accountable. Despite the above argument and the “us and them” polarization among the South Africans, corporate social investment is successfully implemented by other organizations in South Africa. Alperson (1995:14) argues that a number of companies have chosen themes as the way to focus their social spending, the Colgate-Palmolive South Africa foundation inline with the international compaign spearheaded by its New York-based corporate parent, emphasizes multicultural youth programs. In conjunction with the Reconstruction and Development Program, many companies are linking their corporate social investment to explicit projects in skills training and job creation, for example, BMW are adapting their corporate social investment strategies to address RDP goals (Alperson, 1995:15). This clearly shows that South African companies are fully committed in helping the communities' aroundwhich they are built. South Africa must realize that she is not the only country implementing corporate social investment and should find out how other countries go about in assisting their communities in which they operate so as to find some creative and innovative corporate social investment programs that make a difference. This is confirmed by Alperson (1995) when he argues that corporate social investment in South Africa should not be studied in isolation, as companies become global, they must examine their roles as corporate citizens of the world.

9.The so-called new partnership

The past government through its policies not only created problems to the disadvantaged communities of South Africa, but it also created problems to the big businesses. The disadvantaged communities see big businesses as partners of the past government thus support apartheid and also corporate social investment is seen as form through which big businesses admit their guilt. Mersham et al (1995:79) argues that in this view corporate citizenship is seen to support apartheid capitalism and the resultant exploitation of black people. Big businesses on the other hand argue that corporate social investment is not an admission of guilt. The above argument clearly shows that a new partnership should be established by corporate industries so that they could not be seen as the followers of the apartheid regime. Nair, in Mersham et al (1995:90) argues that business have a duty to support the struggle of the people and that means taking a stand against apartheid. This partnership either with the community, the government or other corporate industries would make coordination and co-operation possible; this in turn would make issues on social change and development to be effectively addressed.

10.  Conclusion

The government alone cannot meet all the challenges facing this country. The government needs the cooperation of all the citizens of South Africa to work together to
Solve the past problems. Certainly, it is high time now for the South Africans to stop accusing one another. The past is gone, we should unite and piece together the issues and sentiments that represents the country'’ values. With big businesses prepared to offer help through corporate social investment, we have the potential, ability and skills of solving our social and economic problems. But we must not forget that the business’s main objective is to make profit, so we must not fool ourselves and think that the business has an obligation duty to extend their help to their surrounding communities. The communities themselves must take some initiatives and try to organize themselves into groups and tackle some of the problems they can manage to tackle.

 10.Bibliography

Alperson, M. 1995. Foundations for a new democracy. Corporate social investment in South Africa. Johannesburg: Ravan press
Diescho in DeBeer, A.S. 1998.Mass media. South Africa: Van schalk.
Herman, E.S. 1981. Corporate control, corporate power. Cambridge: Cambridge university press
Mersham, G.M, Rensburg, R.and Skinner, C. 1995. Public relations, development and social investment: A Southern African perspective. Pretoria: Van Schalk
Skinner, J.C. 1994. Public relations and communication theory, with specific reference to corporate social investment.   Masters dissertion, Department of Communication Science, University of Zululand.
Rensburg, R., Mersham, G.M, Skinner, C. 1995. Public relations, development and social investment: A Southern African  perspective. Pretoria: Van schalk.
http://www.rbm.co.za/
 

Case study: Corporate social investment in Richards Bay Minerals (March 1999)

One of the big corporate organization I visited has been the Richards Bay Mineral (RBM). In my visit I asked the following questions to the General Manager of Community Affairs, Mr. Jabu Kubheka the answers of which made more explicit how corporate social investment is implemented by RBM:
 


Thus, the following discussion will specifically provide answers obtained during an interview with Mr.Jabu Kubheka, to the above mentioned questions.

Richards Bay Minerals was established in 1976.Richard's Bay Minerals is the world's foremost producer of titanium minerals, high purity iron and zircon. It is situated at Richard's Bay on the Indian Ocean coastline 180 kilometers north of Durban in the Republic of South Africa.  Corporate social investment in RBM was established as part of business plan. It was also established because the company had the moral obligation to uplift the community in which it operates. RBM define corporate social investment as something that is concerned with issues and programs that positively impact on quality of life, human development and human relationship. Richards Bay Mineral’s social investment mission statement also confirms their definition of corporate social investment for it says “We will support and initiate appropriate action that will meaningfully contribute to the improvement of the quality of life of our employees, their families and members of the community as a whole” Corporate social investment in RBM operates in a separate department. It is not intertwined with the Public relations functions or the human resources department. “There are full-time people employed to work on corporate social investment”, said Jabu Kubheka, the General manager of community Affairs at RBM. As far as the role of the Public relations practitioners is concerned, Jabu Kubheka argued that in RBM, Public relations practitioners are there to promote the institution, to bring the positive image of the institution. “The actual people who are involved in social change and development are corporate social investment people who are full-time employee for this program”, insisted Jabu Kubheka. RBM’s employees are also involved in corporate social investment program since expertise are drawn from them. On the question of trade unions involvement in corporate social investment programs, RBM’s employees are not fully involved in corporate social investment. “ We agreed with the trade unions in one of our regular meetings with them that they will not be fully involved and that we will keep on informing them as far as corporate social investment programs are concerned within the company” said Jabu Kubheka. Richards Bay Minerals identify the recipients when they write on a daily basis and the donation committee meets on every second Monday of the month to decide who get what, how much, when and how? Emphasizing the differences between RBM’s corporate social investment and other organization’s corporate social investment, Jabu Kubheka said “our corporate social investment differs significantly to other organization’s corporate social investment in that we have a practical approach towards corporate social investment, for example we do not believe in donations, instead we actually do what is required”

The overview of some of the projects Richards Bay Minerals has been or is involved in

Richards Bay Mineral’s corporate social investment program covers four main areas. These areas are Community development, Business development, Health care and Education.
 

At Kwambonambi, RBM initiated a rural development program in 1998, which started out with cooking and gardening clubs. Presently, this initiative takes a form of a network of efficiently run committees under the overall control of a local community development council (LCD). Meetings, gardening lectures and practical demonstrations are held for the benefit of the community. Members of the community also learn how to sew and cook nutritious meals for their families and any surplus is sold to the public. Some sewing clubs have acquired contracts to supply uniforms for local schools. Thus RBM has given the Umbonambi community the tools to manage the development of their community. They are now changing their lives for the better everyday.
  A project called Business Advice Center, was established by RBM in 1986 which has been instrumental in the creation of more than 3 000 job opportunities in the region and attracts over 2 000 emerging entrepreneurs seeking advice and counseling per annum. The Business Advice Center co-ordinates a national entrepreneurship education initiative that focuses on the introduction of entrepreneurship education as an accredited subject into the national school curricula. The Business Advice Center has for many years been instrumental in promoting and developing a strategy that links capable small-scale entrepreneur with sub-contracting opportunities available from big business. In the Mbonambi tribal area, through BAC projects, seven mini-factories were built by RBM, thus creating more employment opportunities. The department of trade and industry acknowledged the Business Advice Center as a local business service center, this will in turn lead to the establishment of a national network of small business resource that provide quality care services to the small business community.
  RBM has built eight clinics in rural areas that provide free health care service to pupils, company employees and their dependants. A modern family clinic has been built also by RBM in the Umbonambi rural area. These facilities provide a convenient, decentralized medical service that helps relieve over-crowding at nearby hospitals. These clinics have made big difference to the lives of the Umbonambi people. Before these developments, the local people had to travel to Nseleni clinics, Ngwelezana hospital, and even Hlabisa hospital for medical care.
  Education formed the cornerstone of Richards Bay Mineral's corporate social investment program. Rural schools are seen as having more needs than the urban schools, thus basic facilities at rural schools were addressed a priority. This ensured that there are sufficient classroom to keep the teacher-pupil ratio as low as possible and that the schools have water and toilets. A partnership between RBM, Hoer Skool Richards baai and Manqamu High school resulted in an annual winter school for metric pupils. After consultation with the community, RBM designed and built Tisand technical High school in Esikhawini to provide much-needed technical education in the area. The school has a fully equipped electronic, metal work and motor mechanics workshop, thus giving pupils a thorough technical knowledge prior to entering the industry. In computer education, RBM-sponsored computer center at the University of Zululand and Tisand technical high school enable students to become computer literate.

From the above overview of some of the projects Richard's Bay Minerals has been or is involved in, it is apparent that the communities around Richard's Bay Minerals are what they are because of Richard's Bay Minerals. Each an every day they are changing their lives for the better because Richard's Bay Minerals have given them the tools to manage the development of their lives. So if all the South African companies or organizations could do as RBM is doing, the standard of living of the South African citizen can be uplifted to such an extent that there would be no more poverty and unemployment particularly on the historically disadvantaged people.