CSR meets VBM

Ini dia bahasan yang aku tunggu-tunggu, kenapa?? soalnya menarik n complicated banget, di dalamnya terlibat moral perusahaan terhadap government, lingkungan sekitar lalu dikaitkan kepentingan para pemegang saham dan pegawai di dalam perusahaan. Well, ini kasus dalam perusahaan maksudku, tapi tentu saja CSR ini ada di setiap organisasi seperti misalnya sekolah. Yuks langsung aja..cap cus cin..ha..ha..kata-kata ini baru aku denger dari temen2ku itu yg gaul abiezzzzzzzzz..

VALUE (S)-BASED MANAGEMENT:

CORPORATE SOCIAL RESPONSIBILITY MEETS VALUE-BASED MANAGEMENT

 

Definition :      Value Based Management (VBM) is the management approach that ensures corporations are run consistently on value (normally: maximizing shareholder value).

Corporate Social Responsibility (CSR) is about how companies manage the business processes to produce an overall positive impact on society.

Corporate objectives are not only generate profits for shareholders but there are aspects such as employees, customers, vendors, the governments, communities where the company is located, and on the overall community into thinking part of the company’s own existence.

These include:

  1. Creating value
  2. Managing for value
  3. Measuring value

Then how VBM is from the viewpoint of shareholders? So that between shareholders and employees, customers, vendors, Governments, Communities, the Governments, the environment, and society in general is structuring win-win agreements? This is where the role of the CSR strategy in identifying advantages in considering the needs and values of all stakeholder groups.

As defined by Drucker, that the objectives set forth in the company’s business objectives, in his book The Practice of Management:

If we want to know what business is, we have to start with its purpose. And the purbose must lie ouiside the business itself. In fact, it must lie in society, since a business enterprise is an organ of society. There is only one valid definition of business purpose: to create a customer. The customer is the foundation of a business and keeps it in existence. He alone gives employment. And it is to supply the customer that society entrusts wealth-producing resources to the business enterprise.

Drucker also describe the concept of social responsibility in his book Managing in a Time of Great Change:

A business that does not show a profit at least equal to its cost of capital is socially irresponsible; it wastes societys resources. Economic profit performance is the base without which business cannot discharge any other responsibilsties, cannot be a good employer, a good citizen, a good neighbor. But economic performance is not the only responsibility of a business…. Every organization must assume responsibility for its impact on employees, the environment, customers, and whomever and whatever it touches. That is social responsibility. But we know that society will increasingly look to major organiza tions, for-profit and nonprofit alike, to tackle -major social ills. And that is where we had better be watchful, becausje good intentions are not always socialy responsible. It is irresponsible for an organization – to accept—let alone pursue—responsibilities that would impede its capacity to perform its main task and mission or to act where it has no competence.

In order business sense for firms to invest in CSR programs. Characteristics of the firm that were labeled as CSR strengths showed a-very strong positive association with the firm’s return on assets (ROA), whereas firm characteristics that were labeled as CSR concerns showed a very strong negative association with the firm’s ROA. Value-based management makes sense from a financial perspective.

Mariany W Lidia (29010026)

Reference:

http://www.valuebasedmanagement.net/faq_what_is_value_based_management.html

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