PAGE PWU-CDCEC CALAMBA ALVA CENTER ROSAL ST. BRGY. UNO, CROSSING CALAMBA CITY, LAGUNA Contact No.: 0922-821-6938/0939-904-3185/0917-527-5465 Tel. No: (049) 508- 1963/ (02)420-8209 Chapter 1 THE PROBLEM AND ITS BACKGROUND Introduction Corporate Social Responsibility is the new “religion” in business. Investor-owned companies are now rushing to compete on the basis of who is more socially responsible, or who can best deliver its responsibility. Social responsibility is the obligation of organization to make decision and take actions that will enhance the welfare and interest of society as well as the organization. Social responsibility is quite important to the society, organization and human. There are several reasons to support the importance of social responsibilities. It is related to the ethical responsibility, and differentiates into difference level of social responsibilities, which is economic, legal, ethical and philanthropic responsibility. There are six main areas of social responsibility, the employees, providers of finance, consumer, community and environment, and other organizations or groups. 1
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PAGE PWU-CDCEC CALAMBA ALVA CENTER ROSAL ST. BRGY. UNO, CROSSING CALAMBA CITY, LAGUNAContact No.: 0922-821-6938/0939-904-3185/0917-527-5465 Tel. No: (049) 508-1963/
(02)420-8209
Chapter 1
THE PROBLEM AND ITS BACKGROUND
Introduction
Corporate Social Responsibility is the new “religion” in business.
Investor-owned companies are now rushing to compete on the basis of who
is more socially responsible, or who can best deliver its responsibility.
Social responsibility is the obligation of organization to make decision
and take actions that will enhance the welfare and interest of society as well
as the organization. Social responsibility is quite important to the society,
organization and human. There are several reasons to support the
importance of social responsibilities. It is related to the ethical responsibility,
and differentiates into difference level of social responsibilities, which is
economic, legal, ethical and philanthropic responsibility. There are six main
areas of social responsibility, the employees, providers of finance, consumer,
community and environment, and other organizations or groups.
For cooperative, social responsibility is their nature. As member-owned
and democratically-controlled enterprises, cooperative has a different and
unique approach to social responsibility. The view among cooperative
enterprises is that social responsibility is something which is a voluntary and
natural function of all cooperatives emanating from their values and
principles.
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PAGE PWU-CDCEC CALAMBA ALVA CENTER ROSAL ST. BRGY. UNO, CROSSING CALAMBA CITY, LAGUNAContact No.: 0922-821-6938/0939-904-3185/0917-527-5465 Tel. No: (049) 508-1963/
(02)420-8209
The movement of cooperative social responsibility has given the
impetus to shift from simply doing good things in the community to one that
embrace the notion of improved accountability to stakeholders and the need
to explain themselves, and to maintain a license to operate. The idea of
social responsibility has opened up new understanding that all cooperative
organizations affect far more members than was perhaps realized in the past
and that these stakeholders have a legitimate right to at least know what is
going on, or even have some influence on them.
Cooperatives are known for their commitments to social responsibility.
According to Republic Act No. 9520 also known as Philippine
Cooperative Code of 2008, cooperative should practiced transparency and
accountability. The cooperative are required to submit social responsibility
audit to the Cooperative Development Authority (CDA).
Cooperative Development Authority (CDA) was created by virtue of
Republic Act No. 9520 in compliance with the provision of Section 15,
Article XII of the Philippine Constitution of 1987 which mandates Congress to
create an agency to promote the viability and growth of cooperatives as
instruments for equity, social justice and economic development. CDA is the
lead government agency in the registration, regulation, promotion and
development of cooperatives.
Cooperatives are defined as “autonomous associations of persons
united voluntarily to meet their common economic, social and cultural needs
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(02)420-8209
and aspirations through a jointly-owned and democratically- controlled
enterprises”.
Sulong sa Tagumpay Multi-Purpose Cooperative (STMC) has already
gone a long way — from the time when it took roots in Philips
Semiconductors Calamba, No. 9 Mt. Drive, Light Industry and Science Park II,
Brgy. Lamesa, Calamba City, Laguna. Now, STMC stands tall as landmark of
cooperative endeavors in Laguna.
Sulong sa Tagumpay Muliti-Purpose Cooperative is one of the most
viable and stable institutional based cooperative in the Region IV. Its
membership is about 1,600 individuals all regular employees of
STMicroelectronics Inc. and ST-Ericsson Philippines Inc. It offers a wide range
of basic services to its stakeholders, and presently it renders credit services,
financial and social responsibility, coop education and training. In 2007, it
won most outstanding cooperative in Laguna conferred by the Cooperative
Development Authority, making it number two in Laguna based on total
asset as of December 31, 2012.
The cooperatives’ organizational structures are good training grounds
for productive citizenship. Through the dynamic workings of the cooperative
structures, the members are afforded the opportunity to see a functioning
democracy and at work, to learn the enabling endowment of the value of
self-help and self-responsibility, to understand in a non-abstract way equality
and equity, to practice social responsibility and the caring for others, and of
solidarity, honesty, openness – values that a cooperative holds. Through
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(02)420-8209
their active participation, the members in consequence assimilate the
essences of these values, in a way that is incarnate and authentic. And
through these members, who in turn become purveyors and missioners of
these values to the community, the community gains, earns its peace, and
becomes a better place for all.
Theoretical Framework
This study is anchored on the code of social responsibility. Through
this theory social audit reports has been established.
The code of social responsibility framework runs through with the
seven cooperative principles. The principles identify and fastidiously
distinguish the cooperatives as business enterprises and people’s
organizations. They make for the cooperatives’ uniqueness, so distinct from
any other businesses or community organizations, and invariably spell the
cooperative difference. These principles are the empowering framework by
which cooperatives move on in their daily activities, without being lost in the
maze of their own operations. These are also the energizing tools upon which
the cooperatives look and grasp the future and assuredly cope up with the
future’s concomitant complications.
Cooperatives around the world generally operate according to the
same core principles and values, adopted by the International Co-
operative Alliance in 1995. Cooperatives trace the roots of these principles
to the first modern cooperative founded in Rochdale, England in 1844. These
PAGE PWU-CDCEC CALAMBA ALVA CENTER ROSAL ST. BRGY. UNO, CROSSING CALAMBA CITY, LAGUNAContact No.: 0922-821-6938/0939-904-3185/0917-527-5465 Tel. No: (049) 508-1963/
(02)420-8209
principles are also embodied in RA9520. Approved and enacted into law in
2008.
These principles are: Voluntary and open membership. This
principle affirms the fundamental importance of people choosing by their
own volition to make commitments to their cooperatives. This further affirms
the universally accepted general commitment to recognize the fundamental
dignity of all persons regardless of gender, social status and cultural
preferences, race, political affiliation and religious beliefs, as long as they
have uses for their cooperative’s products and services and are willing to
accept the obligations of membership.
Second Principle is democratic member control. Democracy
generally refers to rights — the right to vote and be voted upon, equal voting
rights, etc. — and to obligations. In STMC, however, democracy is not only
about rights and obligations of members; it most importantly integrates in
the idea of democracy, the fostering itself and the promotions of the spirit of
democracy within the organization.
The third principle is Member economic participation. The
economic participation of the members in STMC is a three-sided affair. The
first side is the members’ capital contribution, which comes in four ways: (a)
the subscription of share capital, (b) putting in of savings deposits, (c) the
building-up of the collectively owned reserves, (d) the plowing back of
dividends in the form of new shares, and (e) participation in special fund
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(02)420-8209
campaigns for special projects. The second side is the members’ enjoyment
of the fruits out of the usage of the products and services of the cooperative.
Fourth principle is autonomy and independence. This principle
addresses the essential nature of STMC to be autonomous. This means
vigilance, in various ways, of its independence. When it enters into
agreements, either with government or with other business entities,
cooperatives have to define in very clear terms that relationship with them,
in the same way that businesses controlled by capital are autonomous in
their dealings with government or with other businesses.
Fifth principle is Education, training and information. Education
and training are vital components of STM’s’ life. Education is engaging the
minds of members, elected officers, managers and employees to
comprehend fully the complexity and richness of cooperative thoughts and
actions. Training means making sure that all those who are, in one way or
another, involved in cooperatives have or are fully provided with skills that
are required to carry out their functions efficiently, effectively and
responsibly. Training also includes preparing the young for leadership
positions and good citizenship in the future.
Sixth principle is Cooperation among cooperatives. It has to be
recognized that cooperators have in common their individual vulnerability
and powerlessness in the marketplace, and the inadequacy of their personal
wealth to meet their needs for subsistence and welfare. For cooperation to
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PAGE PWU-CDCEC CALAMBA ALVA CENTER ROSAL ST. BRGY. UNO, CROSSING CALAMBA CITY, LAGUNAContact No.: 0922-821-6938/0939-904-3185/0917-527-5465 Tel. No: (049) 508-1963/
(02)420-8209
be practiced by economically vulnerable people, the only way is for them to
act together, to organize themselves into cooperatives. That is one of the
essences of cooperatives. However, cooperatives can only achieve much on
a local level — this one has to be recognized. Beyond are so much more. To
achieve full potential, cooperatives must enter into practical and rigorous
collaboration with other cooperatives. This can be done through alliances,
mergers or joint ventures, by way of large-scale business enterprises that
can have real impact on the members and the community.
The seventh and last cooperative principle is Concern for
community. STMC exist primarily for the benefit of its members. Because of
this reason, they carry with them a very strong affinity with the communities
of the members.
The seven principles are not simply measuring sticks. They are
guidelines upon which the stakeholders continuously evaluate the
cooperative in a more socially responsible way. They equally raise the
question of how the cooperatives can better carry out their work in
conformity with the directions suggested in each of the principles, as they
raise the challenge of how the cooperatives conform to the directions and
practices as suggested by the integrated application of all the principles.
Cooperatives are independent of government and other private
businesses and for social responsibility to be accepted by a conscientious
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(02)420-8209
business person, it should be framed in such a way that the entire ranges of
business responsibilities are embraced.
Archie Carroll (2000), a business management professor at the
University of Georgia: “The social responsibility of business encompasses the
four kinds of social responsibilities: economic, legal, ethical and
philanthropic. Furthermore, these four categories or components of social
responsibility might be depicted as a pyramid.
Figure 1. “The Pyramid of Corporate Social Responsibility
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PAGE PWU-CDCEC CALAMBA ALVA CENTER ROSAL ST. BRGY. UNO, CROSSING CALAMBA CITY, LAGUNAContact No.: 0922-821-6938/0939-904-3185/0917-527-5465 Tel. No: (049) 508-1963/
(02)420-8209
At the most basic level, companies have an economic responsibility
to be profitable so that they can provide return on investment to their
owners or investors, create jobs for the community, and contribute goods
and services to the economy.
Of course, businesses are also expected to obey all laws and
regulations. Legal responsibilities reflect a view of "codified ethics" in the
sense that they embody basic notions of fair operations as established by
our lawmakers. They are depicted as the next layer on the pyramid to
portray their historical development, but they are appropriately seen as
coexisting with economic responsibilities as fundamental precepts of the free
enterprise system.
Business ethics comprises principles and standards that guide
behaviour in the world of business. Although economic and legal
responsibilities embody ethical norms about fairness and justice, ethical
responsibilities embrace those activities and practices that are expected
or prohibited by societal members even though they are not codified into
law. Ethical responsibilities embody those standards, norms, or expectations
that reflect a concern for what consumers, employees, shareholders, and the
community regard as fair, just, or in keeping with the respect or protection of
stakeholders' moral rights.
Finally, philanthropic responsibility refers to activities that are not
required of business but promote human welfare or goodwill. Philanthropy
encompasses those corporate actions that are in response to society’s
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(02)420-8209
expectation that businesses be good corporate citizens. This includes
actively engaging in acts or programs to promote human welfare or goodwill.
The distinguishing feature between philanthropy and ethical
responsibilities is that the former are not expected in an ethical or moral
sense. Communities desire firms to contribute their money, facilities, and
employee time to humanitarian programs or purposes, but they do not
regard the firms as unethical if they do not provide the desired level.
Therefore, philanthropy is more discretionary or voluntary on the part of
businesses even though there is always the societal expectation that
businesses provide it.
Based from the above-cited theoretical framework, the proponents of
the study have conceptualized his research as shown in the figure given
below.
INPUT PROCESS
OUTPUT
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Code of Social Responsibility of STMC based on the Seven
Cooperative Principles• Open & Voluntary Membership• Democratic Members’ Control• Members’ Economic Participation• Autonomy & Independence• Education, Training & Information• Cooperation Among Cooperatives• Concern for Community
Promotion of the Welfare of Stakeholders based on the four