{"id":2386,"date":"2019-05-22T18:04:24","date_gmt":"2019-05-22T08:04:24","guid":{"rendered":"https:\/\/comprara.com.au\/procurement-glossary\/corporate-social-responsibility\/"},"modified":"2021-09-08T00:53:19","modified_gmt":"2021-09-08T00:53:19","slug":"corporate-social-responsibility","status":"publish","type":"glossary","link":"https:\/\/www.comprara.com.au\/procurement-glossary\/corporate-social-responsibility\/","title":{"rendered":"Corporate Social Responsibility"},"content":{"rendered":"<p>Corporate Social Responsibility [CSR] is the extension of corporate goals and decision making to include a broader range of concerns than simply organisational objectives and financial measures of performance.  The objectives of CSR are sometimes known as the &lsquo;<a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Triple Bottom Line&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;While the adoption of corporate social responsibility implies a broad commitment to address objectives other than narrow economic goals, the triple bottom line concept seeks to measure the organisation&#x2019;s performance in terms of its impact on &#x2018;people, planet and profits&#x2019;.  Reporting frameworks that previously focused on financial measures of performance are expanded to include ecological and social performance.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/triple-bottom-line\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>triple bottom line<\/a>&rsquo; or &lsquo;people, planet and <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Profit&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Profit has several different definitions.  Gross profit is the difference between sales revenue and the cost of goods sold, and is one measure of company profitability.  Gross profit margins vary from industry to industry, and as a measure of the profitability of a business gross profit may make a business appear more profitable than it really is, as the company has to pay for overheads, interest and taxes from its gross profit.  Operating profit is sometimes known as Earnings Before Interest and Tax [EBIT] and this is calculated by deducting the cost of goods sold and all expenses, except for interest and taxes, from sales revenue.  This measure of profitability focuses on the surplus generated by the company&#x2019;s operations. Net profit is calculated as total revenue minus total expenses.  For example, a company has sales of 100,000 widgets, sold at $5 each, with a cost of goods sold of $2 each.  Sales revenue is $500,000, and cost of goods sold is $200,000, making a gross profit of $300,000.  Operating expenses of $100,000 to calculate EBIT are then subtracted.  The operating expenses are comprised of sales and administration, research and development etc.  The sum is now $200,000 profit before taxes.  Deducting $50,000 in tax leaves a net profit of $150,000. Most published financial accounts aggregate information at a high level, which makes assessing a supplier&#x2019;s profitability more difficult for the procurement practitioner.  Most practitioners select a number of profitability ratios and consider the trends in the data in order to reach judgements about the firm&#x2019;s overall profitability.  When the market is in recession, solvency measures tend to assume a greater significance than profitability measures for buyers concerned with supplier viability.  See also Ratio Analysis.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/profit\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>profit<\/a>&rsquo;.  CSR promotes good corporate citizenship and responsibility for corporate actions, as well as encouraging a positive impact on all its stakeholders, including suppliers, consumers, employees, communities governments and the <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Environment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;The surroundings of a central entity or organisation.  When undertaking a PESTLE analysis, a number of environments are reviewed in order to understand the trends and factors impacting on the organisation.  For example, the second E in PESTLE is usually held to mean ecological and physical environmental factors, such as climate and natural disasters.  The idea is that by detecting current environmental trends, organisations will be able to anticipate the impact and take appropriate action.  See also PEST Analysis.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/environment\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>environment<\/a>.  CSR has clear implications for <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Procurement&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Procurement describes all those processes concerned with developing and implementing strategies to manage an organisation&#x2019;s spend portfolio in such a way as to contribute to the organisation&#x2019;s overall goals and to maximise the value released and\/or minimise the total cost of ownership. Procurement is a more comprehensive term than purchasing, which is more focused on the tactical acquisition of goods and services and the execution of plans rather than the development of strategies. Procurement can be a department, a role and\/or a process. As a process, procurement begins with the review of the spend portfolio and the development of an opportunity analysis. Once categories are defined, the procurement process involves identifying and engaging with potential stakeholders, defining business needs and preparing a business case. Once the market has been reviewed, a reconciliation of the business need and the supply market character ensures that appropriate procurement strategies are developed. Strategies may involve insourcing, outsourcing, competitive bidding, direct negotiation, and a variety of other sourcing strategies. Once the strategy is developed, the execution will involve market engagement and the issue of the RFI and the RFP and\/or negotiation. Once offers are evaluated, the optimum solution will be selected and the appropriate contractual agreement established. Procurement differs from sourcing in that the procurement process addresses all pre-contract and post-contract processes. Supplier relationship management, performance management and supplier development are key procurement activities to realise the potential value created during the sourcing phase. Procurement as a full-time role is a specialised job requiring a range of skills and capabilities. Traditional analytical capability is helpful to undertake spend analysis and evaluate offers, but the ability to understand and interact with supply markets is just as important. In terms of interpersonal skills, influencing skills and facilitation skills are just as important as negotiation skills. As an organisation, procurement structures vary with the culture and structure of the host organisation. Many organisations have a centre-led structure with a small central team setting policy and standards and coordinating activity, which is primarily undertaken in the spending departments.The following table seeks to distinguish between commonly used labels for procurement-related processes. While there are no universally accepted standards, most people agree that vendor management applies to post-award processes (though some vendor managers do manage the end-to-end process apart from market engagement). Similarly, sourcing involves all those processes up to the award of the contract. In Europe and Asia, the term &#x2018;purchasing&#x2019; is used to describe transactional processes such as raising purchase orders and reconciling invoices. However, in North America the term &#x2018;purchasing&#x2019; is sometimes used to describe the whole procurement process. The procurement process in North America usually begins with the review of an organisation&#x2019;s spend portfolio, and the development of appropriate strategies, and proceeds right the way through to the review of procurement arrangements and the disposal of goods at the end of their life. Some category managers are not full-time procurement staff but functional practitioners who also undertake business planning for that discipline. For example, a company counsel may be the category manager for legal services, but also plan the size and shape of the organisation&#x2019;s legal services. Police officers with special responsibility for firearms may be the category manager for weapons. In such cases, category management will not only comprise the application of the procurement process to a specific category, but may include elements of business planning as well. See also Category Management and Purchasing.Procurement Essentials and Facilitating the Procurement Process training is available at Academy of Procurement.&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/procurement\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>procurement<\/a> in terms of adoption of sustainable practices, <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Standards&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Standards are the specifications and norms applicable across a trade, industry or nation that are designed to ensure buyers and suppliers share common expectations about minimum requirements for quality, safety and technical performance.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/standards\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>standards<\/a> and <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Specifications&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Detailed and specific requirements or criteria that define the quality, features, performance, and other characteristics of goods, services, or works that an organization or buyer intends to purchase&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/specifications\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>specifications<\/a> in the <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Supply Chain&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A supply chain refers to the organisations that participate in the flow of products, services, finances and information from a source to a customer. The organisations share linkages such as being customer and supplier. The concept of a chain is based on the principle that the participants&#x2019; business success depends in part upon the performance of the supply chain as a whole that may promote a more cooperative mindset.Take the Supply Chain Knowledge Evaluation at Skills Gap Analysis.&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/supply-chain\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>supply chain<\/a> and <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Consideration&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;For promises to be enforceable as a contract, each party to a contract must provide &#x2018;consideration&#x2019;, unless the agreement is a deed.  In procurement, the buyer usually agrees to pay a sum of money - the price - in return for the supplier promising to perform the contract.  The mutual exchange of benefits between the parties is one test to establish the existence of a legally binding contract.  See also Contract, Bilateral.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/consideration\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>consideration<\/a> of the social impact of the organisation&rsquo;s behaviours.  See also <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Socially Responsible Procurement&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Socially responsible procurement occurs when organisations design their procurement processes to deliver social outcomes as well as, or as an alternative to, normal economic measures of value. For example, supply chain partners internationally may be encouraged to observe international standards for employment conditions and to allow free association of workers. The definition of value for money may be configured so that social outcomes such as the use of local labour, or the engagement of apprentices, or the participation of disadvantaged groups is given a weighting in the bid evaluation.Social &amp;amp;amp; Sustainable Procurement training is available at Academy of Procurement.&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/socially-responsible-procurement\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Socially Responsible Procurement<\/a> and <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Triple Bottom Line&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;While the adoption of corporate social responsibility implies a broad commitment to address objectives other than narrow economic goals, the triple bottom line concept seeks to measure the organisation&#x2019;s performance in terms of its impact on &#x2018;people, planet and profits&#x2019;.  Reporting frameworks that previously focused on financial measures of performance are expanded to include ecological and social performance.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/triple-bottom-line\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Triple Bottom Line<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Corporate Social Responsibility [CSR] is the extension of corporate goals and decision making to include a broader range of concerns than simply organisational objectives and financial measures of performance. The objectives of CSR are sometimes known as the \u2018triple bottom line\u2019 or \u2018people, planet and profit\u2019. CSR promotes good corporate&#8230; <br \/><a style=\"color:#00b4cd;\" class=\"excerpt-anchor\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/corporate-social-responsibility\/\">Read more<\/a>.<\/p>\n","protected":false},"author":2,"featured_media":0,"menu_order":0,"template":"","meta":{"_acf_changed":false,"_uag_custom_page_level_css":""},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Corporate Social Responsibility - Comprara<\/title>\n<meta name=\"description\" content=\"Corporate Social Responsibility\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/corporate-social-responsibility\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Corporate Social Responsibility - 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The objectives of CSR are sometimes known as the \u2018triple bottom line\u2019 or \u2018people, planet and profit\u2019. CSR promotes good corporate... Read more.","_links":{"self":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/glossary\/2386"}],"collection":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/users\/2"}],"version-history":[{"count":0,"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/glossary\/2386\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/media?parent=2386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}