Outsourcing Accounting and Corporate Social Responsibility: What is the connection?

Jan. 29, 2009 - PRLog -- Outsourcing and CSR: Doesn’t it sound quite weird? But the truth is that outsourcing definitely can be a part of CSR activity of a business.

What is CSR?
CSR, also called Corporate Social Responsibility or responsible business is a concept where organizations consider the interests of the society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders and other stake holders and also on environment.
The concept of CSR is not a statutory one but a voluntary one which organizations seek to comply with in order to be referred as responsible citizens of this world.

Outsourcing on the other hand means sub-contracting of a process to t third party for strategic reasons either:
a. for making better use of time and energy;
b. for redirecting or conserving energy directed at the competencies of the business;
c. for making better and efficient use of resources.

So how does outsourcing help a business in its CSR?
There are a few factors that CSR impacts and the same factors are affected by outsourcing as well. This article delves deep to understand those factors and how are they affected by CSR and outsourcing.
Let’s look at those factors on which CSR and outsourcing per se have both some kind of impact:
a. Human Resources:
a) An organization following CSR looks at employees as shareholders in doing business and strives to provide the best of facilities. Employees on the other hand, while joining do get impressed by an organization having CSR as one of its goal and thus CSR does aid in recruitment of good talent.
b) Outsourcing, when done on a strategic basis takes into consideration needs of human resources and also helps in furthering CSR image of the organization. A business looking at the entire world as its playground would like to take advantage of factors in those areas where these factors are available at cheaper cost, thereby increasing the profitability of the business which can then be utilized in other areas/functions. Besides, the image of the business in those areas gets a boost thereby increasing its standpoint in CSR.
b. Risk Management:
a) As a responsible business, any business would look at managing risks and mitigating those factors that generate such issues. In fact managing of risk is central to policy making of many a business around the world.
b) Outsourcing also is a strategic tool that a business uses to mitigate the risks associated with the business getting bogged down with non-core areas of operations. In fact, when a business decides to opt for outsourcing, the driving factor is that the core area of operation shall be kept within the control of the business while the non-core area of operation shall be outsourced in order to reduce overheads.
c. Brand Differentiation:
a) CSR offers a unique selling proposition for any organization that has CSR as one of its activity. In fact CSR oriented organizations draw people to these organizations.
b) Outsourcing, if done on a global scale also helps in building brand of the business in those areas where it has got its outsourcing hubs.
d. Environmental awareness:
a) One of the most important factors of CSR is taking care of the environment while taking any decision. In fact, when any organization decides to abide by CSR, it constantly tries to be aware of the environmental issues and take steps to mitigate any harm done to environment.
b) When outsourcing is done on a global scale, business becomes aware of the environment and social conditions prevailing in those areas where it outsources its works. This makes the business a global citizen and it tries to bring those conditions also in its CSR activities.

Thus, outsourcing does have positive impact on CSR and a business actively considering outsourcing becomes a player of social corporate behavior. It also proves that outsourcing shall be looked as a strategic tool so that there is a merger of the CSR goal and the outsourcing reason of the business.

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APT Services is the fastest growing outsourcing firm in India servicing clients in US. Owned and managed by Indian CPAs, APT Services has built up expertise in the niche area of accounting, payroll and tax preparation services. Numerous small businesses and CPA firms in US have gained immensely by utilizing the quality services of APT.