CSR for Education, UGM’s Perspective

Management Thought

CSR for Education, UGM’s Perspective. Amidst a long debate on the failure to allocate 20 percent of national budget for education, here’s a new idea from a Gadjah Mada University (UGM) management expert, Dr Hargo Utomo who is the Director of UGM’s Master of Management Program. In an interview with Tommy Fitriadi from Campus Asia, Dr Utomo said that the idea of producing a regulation to encourage business corporations’ contribution to education is feasible, yet it must be carried out cautiously.

How do you see Corporate Social Responsibility (CSR) in Indonesia nowadays?

In my opinion, nowdays CSR is seen as a jargon. It has emerged because the government wants to set aside a percentage for social care activities. In my opinion, this is a repackaged old stuff.
The best thing to be concerned with is whether CSR is mandatory or voluntary. If it is mandatory, questions may arise as to how much [needs to be given] and how to control this kind of CSR. After all, as implied by the term itself, is it only the corporations which [should] take the responsibility? What about society? People fiercely criticize industry as the cause of pollution, but don’t they also cause pollution? When we talk about CSR, it would be unfair if it is just the company that receives exposure because it would mean that the government does not teach society to be socially responsible as well. I support the existence of CSR, but it is merely an instrument to assert that companies have an obligation. The government has asked the corporations to take part and that should be followed by asking society too. So, both corporations and society must be socially responsible.

What should the government do to companies that have not implemented CSR properly?

CSR is being limited to a marketing gimmick only, so what happens now is that companies would appear to have done something good if they implement CSR. But CSR actually comes in many forms. It is not just a marketing gimmick. Surely it will improve the company’s image, but the thing that’s more important is that CSR needs to return to its original state. To illustrate this, does the product maker use safe material in production? Does it recruit those who are socially responsible? If the companies give five percent of their profits in the name of CSR, such gimmick will be meaningless. What is needed now is not to mislead people. Return CSR to its original state.

Have companies aroused understanding about people’s social responsibility? How can people be asked to be responsible if they have never been taught how to do it? Companies often blame education. In my opinion, if we want a good CSR, let us talk about it together. There has been a gap between education and industry. Let us talk about how to define education that covers both interests.

CSR seems to be for community development and charity. In your opinion, can CSR in Indonesia be expanded for instance by requiring companies to provide scholarship?

That’s a good and interesting idea. However, if it is obligatory, a big reluctance or resistance will emerge from the industry. If it is an obligation, it will be a burden eventually, because it is related to the belief that “nothing is free in this world”. But the idea of giving scholarship is interesting. Such scholarship can be given in the form of internship or joint research to harmonize the interest of education and industry. So, the fund will bear fruit in the form of repairing process. It should not be spent merely as grant to build a campus.
How many companies have allocated a percentage of their profits for research purpose? Few do. Most companies do not care about research. Instead of conducting research by themselves, they would rather buy research results because it is faster and cheaper.

So, if CSR is made mandatory, I do not think it will fit here in Indonesia. If it is made voluntary, who starts first will have an effect on how everyone learns together. The problem is ,who will take the lead. Actually, we have begun and it can be seen from the existence of corporate universities, which is actually a reflection of universities being incapable of responding to the needs of industry. Many big banks have their own training centers. If there is a university that can be a facilitator, corporate universities are not necessary. CSR can penetrate into that area. Let us sit together as an effort to be a bridge between education and industry. That is why it is called an old idea that has never been real. “Missing link and mismatch” will happen. That is why everything seems to go their own way. So, in my opinion, voluntary CSR is better than the mandatory one. If it is voluntary, the areas that will drive the economy must be selected. When it comes to which industry, it is only a matter of choice.

In your opinion, has the time come for companies to do CSR for education?

There will be pros and cons if there is a forced CSR concept which interferes with a company’s policies too much because resistance will emerge. It may even be called an abuse, because education is normative (should do) in nature, and CSR is in this normative area, whereas companies are not normative in nature but objective (have to do or must do). So, in my opinion, there should be the same perception between what must be done and what should be done. Education can become a tool to organize what must be done, and then it becomes a case of “laundering”. But companies can defend themselves using the excuse of CSR.

And when education has been used as tool, the intervention from business interest will be a very hard thing to deny. So, if it is said that the time has come, yes indeed the time has come to do some fine-tuning or to make the same perception about CSR from both education and business angles so that CSR is not merely a tool for promotion or marketing.
We know that education also needs media to deliver its idea and it is the industry that has it. Education also needs to be more open. So far, education is too normative in nature and seems to see business as an enemy. Is there a school in this world that can survive alone? Big educational institutions in America are handled by business. Take Harvard, a private university, for example.

So, are you really not for mandatory CSR?

If it is implemented, there will be pros and cons. That is why what we need to do is redefine the concept of CSR. I agree 100 percent with CSR, but the way CSR is implemented will determine whether it is effective or not. If a company is forced to keep one percent of profit for education, it will still do it but later on people will grumble. So, what is needed is making it clear what the one percent given is for and prevent it from becoming a source of exploitation or “laundering”. It is common in Indonesia, though, that sometimes if things are not compulsory, people don’t work. But this is another problem. This is related to how to educate the masses. It is the responsibility of the mass media to make this appear mandatory but realized voluntarily.

So, as a representative of UGM, what is your assessment about CSR for education?Let us define CSR as a symbiotic mutualism. It means we do not want education merely to be the tool for justifying an activity in an industry. For instance, a company has conducted research and it claims that it has done CSR. What must be done is to see whether the research brings forth a meaningful impact to educational community. So, let us think together about CSR so that it does not become a source of exploitation. If a new form of CSR needs to be defined, let us talk about it together.

If there is a rule that requires companies to set aside one percent of profit before tax for educational CSR, do you think it is feasible?

It is. It is very feasible. However, a great deal of caution must be taken, because pros and cons are bound to emerge. But I personally support the existence authority that forces companies to keep their profits for education.