Corporate Social Responsibilities And The Entrepreneur
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The European Commission (2011) defines the concept corporate social responsibility as a concept whereby companies integrate social and environmental concerns in their business operations in their interaction with their stakeholders on a voluntary basis. Hopkins (2005) argues that corporate social responsibility is concerned with treating the stakeholders of the firm ethically or in responsible manner. Stakeholders exist both within a firm and outside. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for people both within and outside the corporation. In the South African context, the most accepted definition was provided in the King Report (2009) which defines corporate social responsibility as “a well managed company that is aware of and respond to social issues, placing a high priority on ethical standards. CSR is understood as the formation of responsible leadership behavior, which in addition to its central responsibility for making profit also pays attention to ecologically and socially responsible actions across all levels of value creation chain and makes a contribution in the spirit of solidarity to solving societal problems.
In contrast to CSR, the idea of sustainable development is an abstract basic idea that does not contain any concrete operating instructions.CSR can be understood as a company’s contribution to sustainable development. The stakeholder theory of corporate social responsibility by Freeman (1984) views the corporation as a set of interrelated, explicit or implicit connections between individuals and or groups of individuals. Basically a stakeholder includes anyone who can affect or is affected by the actions of the firm. The European Commission sees Corporate Social Responsibility (CSR) as a contribution to the realization of the strategic objective set in Lissabon in 2000: “The realization of the objective to become the most competitive and dynamic, knowledge based economic area in the world, that is able to provide continual economic growth, increased and improved employment possibilities and greater social unity will ultimately depend on the success of the companies and in particular the small and medium‐sized ones.” We cannot have a vivid look at the above definitions without talking about ethics. So, we would look at the definition of ethics in the subsequent text.
2.1 Business Ethics
Hellriegel et al. (2008) describe ethics as the code of moral principles and values that direct the behavior of an individual or a group in terms of what is right or wrong. Smit et al. (2007) said that ethics affects both individuals and business organizations. At individual level, ethical questions arise when people face issues involving individual responsibility, such as being honest, accepting a bribe or using organizational resources for personal purposes. At business level, ethics relates to the principles of conduct within organizations guide decision making and behavior. Business ethics are the standards used to judge the rightness or wrongness of a business’ relations to others. Hellriegeletal. (2008) furthermore notes that business ethics involves how a company integrates core values such as honesty, trust, respect and fairness into its policies, practices, and decision making. Rossouw (2004) points out that business ethics is about identifying and implementing standards of conduct that will ensure that, at a minimal level, business does not detrimentally affect the interests of its stakeholders. Business ethics therefore involves people participating in economic transactions and at the same time serving their own as well as others’ interests. A research by David p. Baron published in 2005 under the above topic, gave the view of Milton Friedman who argued that the social responsibility of firms is to maximize profits.
This paper examines this argument for the economic environment envisioned by Friedman—citizens can personally give to social causes, can invest in profit-maximizing firms and firms that give a portion of their profits to social causes. Citizens obtain social satisfaction from corporate social giving, but that giving may not be a perfect substitute for personal giving. The paper presents a theory of corporate social responsibility (CSR) and shows that CSR is costly when it is an imperfect substitute, but entrepreneurs, not shareholders, bear that cost. A social entrepreneur forms a CSR firm at a financial loss because either doing so expands the opportunity sets of citizens in consumption-social giving space or there is an entrepreneurial social “glow” from forming the firm. The creation of CSR firms increases aggregate social giving. Firms can also undertake strategic CSR activities that increase profits, and a social entrepreneur carries strategic CSR beyond profit maximization and market value maximization.
The paper also examines the implications of taxes and the effect of the market for control for the sustainability of CSR. A second approach to business ethics is that moral obligations in business are restricted to what the law requires. The most universal aspects of Western morality have already been put into our legal system, such as with laws against killing, stealing, fraud, harassment, or reckless endangerment. Moral principles beyond what the law requires – or supra-legal principles appear to be optional since philosophers dispute about their validity and society wavers about its acceptance. For any specific issue under consideration, such as determining what counts as responsible marketing or adequate privacy in the workplace, we will find opposing positions on our supra-legal moral obligations. It is, therefore, unreasonable to expect businesses to perform duties about which there is so much disagreement and which appear to be optional. The unreasonableness of such a moral requirement in our society becomes all the more evident when we consider societies that do have a strong external source of morality.
Islam, for example, contains a broad range of moral requirements such as an alms mandate, prohibitions against sleeping partners that collect unearned money and restrictions on charging interest for certain types of loans, particularly for relief aid. Thus, in Muslim countries that are not necessarily ruled by Islamic law, there is a strong source of external morality that would be binding on Muslim businesses apart from what their laws would require. Similarly, Confucianism has a strong emphasis on filial piety; thus, in Chinese and other Confucian societies, it is reasonable to expect their businesses to maintain a respect for elders even if it is not part of the legal system. In Western culture, or at least in the United States, we lack a counterpart to an external source of morality as is present in Muslim or Confucian societies. One reason is because of our cultural pluralism and the presence of a wide range of belief systems. Even within Christianity, the diversity of denominations and beliefs prevents it from being a homogeneous source of Christian values.
In short, without a widely recognized system of ethics that is external to the law, supra-legal moral obligations in our society appear to be optional; and, it is unreasonable to expect business people to be obligated to principles which appear to be optional. In our culturally pluralistic society, the only business-related moral obligations that are majority-endorsed by our national social group are those obligations that are already contained in the law. These include a range of guidelines for honesty in advertising, product safety, safe working conditions, and fair hiring and firing practices.
In fact, the unifying moral force of businesses within our diverse society is the law itself. Beyond the law we find that the moral obligations of businesses are contextually bound by subgroups, such as with a business that is operated by traditional Muslims or environmental activists. In these cases, the individual businesses may be bound by the obligations of their subgroups, but such obligations are contingent upon one’s association with these social subgroups. And, clearly, the obligations within those subgroups are not binding on those outside the subgroups. If a business does not belong to any subgroup, then its only moral obligations will be those within the context of society at large, and these obligations are in the law.
2.2 Importance of corporate social responsibilities Corporate social responsibilities play a major role in developing the economy of a country. It can be defined as the way in which a company manages various business entities to produce an impact on the society. Companies with high CSR standards are able to demonstrate their responsibilities to the stock holders, employees, customers, and the general public. Business organizations that have high corporate social responsibility standards can attract staff thereby reducing employee turnover and cost of recruitment. What is the importance of corporate social responsibility? Anyone can give a clear answer to this question. Companies voluntarily contribute a large sum of money to make a better society and a clean environment. Corporate social responsibility is a process in which all companies come together as one and take part in the welfare of the society. Many organizations conduct campaigns to create awareness among corporate, civic bodies, and government bodies about the importance of corporate social responsibility.
Many national and multinational firms are booming in various developing countries. But at the same time, these countries suffer social challenges such as poverty, corruption, population growth, etc. Therefore, it is important for all companies to strive together and adapt corporate social responsibility standards to make the society better than before. An organization can exhibit a better image in the society if it cares for its employees and involve them in social activities. The responsibilities of an organization may range from providing small donations to executing bigger projects for the welfare of the society. Many business houses around the world show their commitment to corporate social responsibility. What is the importance of corporate social responsibility? The answer lies in two things: 1. organizations understanding their role in developing a society and 2. Awareness among business houses, corporate bodies, and the people. Versatile, profitable, and dynamic businesses are the driving forces that build the economy of the country. We must remember that the growth of a country purely depends on the growth of the society and the people in the society.
According to David Saul; is view to the importance of CSR; Judging by the various newspaper reports I’ve seen recently, business ethics and the importance of corporate social responsibility is currently a hot topic. While it’s a good thing that this issue is on the agenda, the picture painted by various studies and surveys is mixed. For the business world, these studies offer an important insight into consumer perception and underline how important CSR can be for businesses. It’s for this reason that I think it’s worth examining recent research, considering what it means for businesses, how they can adapt and why it’s important for them to do so. The first point to note is that CSR isn’t just good for the environment and communities – it’s likely to significantly influence business success. Recent consumer polls by Edelman, and Young & Rubicam, show that 87 per cent of UK consumers expect companies to consider their impact on society as much as their own business interests, while more than 70 per cent of people make a point of buying from companies with views similar to their own.
With this in mind, let us look at a recent study by JWT Intelligence and Ethos JWT of UK, US and Canadian consumers, which showed how skeptical consumers are of CSR efforts. Some 88 per cent of those polled were concerned that money doesn’t go where promised and more than 75 per cent believe companies need to provide more information on how funds are allocated to charitable or social causes. When we consider the facts highlighted by these studies – the majority of consumers seek out brands with socially responsible values and the majority of consumers are skeptical about companies’ efforts in this area – we can infer that many businesses could damaging their profitability by failing to demonstrate they are genuinely committed to CSR.
Some might dismiss these findings as a sign that consumers are too cynical, but I believe that doesn’t give consumers enough credit. Instead, I feel these findings show that too many companies see CSR as an add-on, rather than an integral part of how their business operates. A strong CSR policy is important for our communities and this research shows it’s important for business. Underlining its importance, research shows it can also play a key role in employee development. A recent study by the consultancy Corporate Citizenship, which tracked the learning and development of over 500 volunteers in 16 blue-chip companies, showed how enabling employees to participate in charitable initiatives could actually deliver returns to businesses by reducing training and development costs.
The study revealed that those employees taking part in voluntary initiatives had improved their communication, coaching, influencing and negotiating abilities and were more adaptable – valuable and transferable skills for any business, regardless of size or sector. It should also be noted that giving employees a sense of pride by empowering them to make a difference to their communities can help with staff retention. It’s for this reason that it should come as no surprise that efforts to help staff volunteer are taken into account when the Sunday Times Best Companies to work for lists are compiled. It’s for all these reasons that we’ve made social responsibility a central part of our company culture at Business Environment, placing CSR at the heart of the business by offering employees time off work, on top of their usual holiday allowance, so that they can carry out charitable work and support good causes.
We’ve also donated services in kind to good causes, including Rays of Sunshine, a charity helping seriously ill children, and have raised money for charities our employees have a personal connection with. When research makes clear how important corporate social responsibility is for the planet, communities, your customers and employees, the question shouldn’t be ‘why CSR?’ We should instead ask ‘why not? Corporate social responsibility generates direct and indirect business benefits and advantages to the corporation that adopt it (Bueble, 2009). In synthesis, the benefits and advantages that corporations adopting Corporate social responsibility initiatives may obtain are the following (Campbell, 2007):
1. Increased employee loyalty and retention;
2. Gaining legitimacy and access to markets;
3. Less litigation
4. Increased quality of products and services;
5. Bolstering public image and reputation and enhanced brand value;
6. Less volatile stock value;
7. Avoiding state regulation; and
8. Increased customer loyalty;
Corporate social responsibility (CSR) activities amongst various corporations and it stakeholders could contribute to the macroeconomic
development of a developing country through sustainable benefit to all. At the same time, optimum national impact, cooperation, and communication would be encouraged and socialized. The following are the various benefits of corporate social responsibility to the society. 2.3 Features of CSR
At a recent Master class organized by MHC International Ltd (MHCi), participants from Nestlé, Unilever, Manpower, Reuters, Standard Life, UNICEF, UNCTAD and ILO raised six key questions about CSR: 1. How should CSR be treated in SMEs (Small and Medium Sized Enterprises)? 2. How could CSR be considered in country such as China? 3. How best to measure CSR? 4. What is the key benchmark for CSR? 5. Where does the social responsibility of a company stop? 6. What is the role of international organizations? There is no quick answer to each of these questions but here, in brief, is an overview of each question with a summary of the response from the Master class. Research based on interviews with managers and owners of small businesses suggested the main motivational factors for small businesses to be socially responsible were as follows: 1. Learning for staff – new skills and competencies developed 2. Improved culture – increased motivation and commitment of staff 3. Reputation – enhancing the firms image locally
4. Recruitment – links with potential recruits
5. Productivity – gathering innovation for products and efficiencies 6. Corporate responsibility – personal satisfaction from discharging wider responsibilities 7. Customers – expanding the customer base We also noted in our 2000 global report on CSR that small companies with less than 50 employees have, on average, lower scores than larger companies when ranked on our CSR Critics scale (where zero is very bad and one is very good). What is particularly striking is that companies with ten to fifty employees have the worst record on CSR (0.46) on average, than all other size categories. This is probably because when a firm is very small then each individual is very aware of the business and the ethics involved. As a firm grows more problems develop. As a firm gets to be bigger and bigger then more stringent management controls are implemented leading to more control and awareness of ethical issues. The most surprising result was the consistently poor scoring of companies with ten to fifty employees ñ the small to medium sized enterprises.
Equally surprising is that medium sized companies with 50 to 1000 employees have almost identical behavior patterns to large (i.e. over 1000 employees) companies. The main striking difference between these latter two groups is that the larger companies pay less heed to transparency of their Boards of Directors than the smaller companies and this is true across all sizes, on average. But CSR should not pass SMEs by. What is required is a simple checklist for each SME that can be carried out within minutes since no SME has much time for complicated maneuvers outside of business itself. Some attempts have been made to create web based systems but, because of the large numbers of SMEs, only automatic audits can be carried out continuance of State interference. Nevertheless, inroads are being made into Asia as ACCA has shown with two reporting awards ceremonies this year – the first time for both Malaysia and Singapore with Pakistan and Hong Kong 3. How best to measure CSR?
One of the biggest problems devisers of measurement systems face, just as the creators of codes of conduct or principles of behavior do is what conceptual basis to use. There is also a proliferation of the term CSR, corporate citizenship, corporate sustainability, business ethics etc. This makes focusing on CSR more difficult. A useful framework for thinking about codes of conduct is one which we at MHCi have been active in working on with companies and where we have developed a number of indicators. It is also multi-stakeholder in concept. In this conceptual model, the questions asked are whether the company does have a clear statement of principles, whether this is followed by a number of processes to implement these principles and what outputs can be measured. Thus CSR is measured following a business organization’s configuration into three levels: The Triple-P Approach to CSR: Level 1: Principles of social responsibility Level 2: Processes of social responsiveness Level 3: Products (or Outcomes) as they relate to the firm’s societal relationships.
These can then be further divided, naturally, into the principles, processes and outcomes for each stakeholder group. The GRi, for instance, uses this approach implicitly but tends to go too far with too many indicators. Which leads us into our next issue: 4. what is the key benchmark for CSR? What is the standard upon which companies pursuing CSR can base their own programme? The quick answer is that one does not, to date, exist. There have been many attempts but most stem from the environmental reporting framework: this is more established although not it without problems. Indeed the current most mentioned benchmarking system in the field is the Global Reporting Initiative. It has gone a long way but many, including MHCi, think it is over heavy with unnecessary detail. Perhaps the best approach for any company wishing to check out where they are is to compare their work with some of the industry prize winners such as The Cooperative Bank, Shell and BT in the UK, Van City in Canada and, yes despite many criticisms, Nike in the USA.
5. Where does the social responsibility of a company stop? Again there is no easy answer. Should a socially responsible company expect all its suppliers small, medium and large to adhere to the same standards? What about the suppliers of suppliers? The latter is, again, of particular importance for companies using a developing country supplier which takes us back to the point above on developing countries. There is no easy solution to this issue and best practice is hard to find although B&Q the largest DIY retailer in the UK (parent company Kingfisher) has paved a way and is worth investigating. 6. What is the role of international organizations? International organizations coming under the umbrella of the United Nations have made several steps in the past few years to promote the CSR agenda. Models are hard to come by simply because the UN is a membership organization of just about all the countries in the world and therefore any agenda is a compromise of many views. For instance the UNís Global Compact is widely cited but only covers nine principles, a subset of all stakeholder concerns, and has been accused of lacking teeth. 2.4 Types of CSR
Corporate Social Responsibility (CSR) is a very hot topic that affects many stakeholders and all companies. CSR touches many aspects of a company’s strategic external environment, and if effectively deployed, CSR can be a very tactical differentiated advantage to a firm’s value creation and value-proposition model. Reverse Logistics covers many process areas that directly correlate with CSR. One of the main challenges companies have with CSR is to effectively incorporate programs that create a transparent business link to their CSR efforts and create a valid business model that improves their bottom-line result There are six distinct types of CSR that fall into targeted categories:
* Cause Related Marketing
* Corporate Social Marketing
* Cause Promotions
* Corporate Philanthropy
* Community Volunteering
* Social Responsible Business Practices
Now, we shall be looking at all of the above types distinctively. 1. Cause related marketing:
A corporation commits to making a contribution or donating a percentage of revenues to a specific cause based on product sales; most commonly, this offer is for an announced period of time, for a specific product, and for a specific product and for a specified charity. Also, Cause Related Marketing is a commercial activity by which businesses and charities (or causes) form a partnership with each other to market an image, product or service for mutual benefit. It is a marketing tool used to help address the social issues of the day, through providing resources and funding, whilst at the same time addressing important business objectives.
Examples of Cause Related Marketing in the UK include a partnership by Cadbury Limited and Save the Children which raised funds for Save the Children and focused community programmes to the benefit of Cadbury’s corporate image. Another good example from the retailing industry is Tesco’s ‘Free Computers for Schools’ which is based on parents and friends of schools collecting vouchers in proportion to the amount of money they spend in Tesco stores. When Cause Related Marketing works well, everyone wins – the company, the cause and the consumer. In business terms, this is known as a win/win/win situation. American Express first used the phrase “cause-related marketing” in 1983 to describe its campaign to raise money for the Statue of Liberty’s restoration. American Express donated one cent to the restoration every time someone used its charge card. As a result, the number of new cardholders grew by 45 percent, and card usage increased by 28 percent. 2. Corporate social marketing:
A corporation supports the early development and/or implementation of a behavior change campaign intended to improve public health, safety, the environment, or community well-being. In 1971, Kotler and Zaltman (1971) proposed the concept of social marketing as an attempt to expand the marketing discipline. Social marketing is defined as “the design, implementation, and control of programs calculated to influence the acceptability of social ideas and involving considerations of product planning, pricing, communication, distribution, and marketing research” (Kotler & Zaltman).
It involves the application of marketing technologies to programs that aim to promote socially responsible ideas and behaviors among target audiences to improve their welfare and that of the larger society (Kotler & Zaltman, 1971). Although research traditionally examined social marketing programs implemented by government agencies and nonprofit organizations, Kotler and Lee (2005) have extended this concept to the context of for-profit organizations by using a term, corporate social marketing. Corporate social marketing (CSM) refers to “a means whereby a corporation supports the development and/or implementation of a behavior change campaign intended to improve public health, safety, the environment, or community well-being” (Kotler & Lee, 2005, p.114). The major goal of CSM is to persuade individuals to perform socially beneficial behaviors. This intended influence on behaviors distinguishes CSM from other types of corporate social initiatives implemented by firms to assume their corporate social responsibility (CSR). 3. Reputation (enhancing the firm’s name locally):
Reputation has long been considered critical for firm survival and success in the business world. Since the seminal work of Kreps (1990), the idea of firms as bearers of reputation has become increasingly important in the modern development of the theory of the firm. For example, Tadelis (1999, 2002), Mailath and Samuelson (2001), and Marvel and Ye (2004) develop models of firm reputation as tradable assets and study the market equilibrium for such reputation assets. Klein and Leffler (1981) and Horner (2002) analyze how competition helps firms build good reputations when their behavior is not perfectly monitored by customers. Firm’s reputation is based on the information its customers hold about its past performance. Such information may simply result from own past experience but more often than not it will actually stem from information exchange—from what consumers have heard from others. In fact, most brand reputation appears to be based on such word of mouth. In many cases, such as luxury cars or high-end stereos, consumers who know about a product’s high quality far outnumber those who have actually tested it. Consequently, the way consumers exchange information matters for firms’ reputation and, ultimately, for market outcomes. Consumer networks are the carrier of firms’ reputations. 4. Cause promotions:
Kotler and lee (2008) stated that because promotion is primarily focused on efforts to raise awareness and concern for a social issue (e.g. global warming domestic violence) but typically stop short of charging itself with changing behaviors. This change in knowledge and belief may be a necessary prelude to changing behaviors, and social marketers may contribute to this awareness building and attitude change-but the ball their eyes will be on is the one indicating desired behavior was ‘bought. Cause promotion is not for selling a product to customers like business promotion. It aims to make people aware of social issues in the hope they would change their behavior, such as not wasting water, caring about public health, preventing air pollution, and preventing infectious diseases and so on.
Kotler, Lee, and Rothschild (2006) stated that because promotion is a process that applies marketing principles and techniques to create, communicate, and deliver value in order to influences target audience behaviors that benefit society (public health, safety, the environment, communities) as well as the target audience. Social marketing is not business marketing for selling a product to customers, and get profits from target market. It only focuses on selling behaviors to the people and benefits to society. Dann (2008) also stated that “social marketing is the adaption and adoption of commercial marketing theory and practice for social change programs, campaigns, and causes”.[ From the definition of social marketing we can see that social marketing is similar to cause promotion, which is focus on social issues. Cause promotion campaign efforts to raise people’s awareness of social issues, and social marketing campaign use marketing principles and techniques to deliver information to influences target audience behaviors based on those social issues. 5. Community volunteering:
Volunteering, in the sense of carrying out tasks or providing services for individuals or community organizations without financial recompense, is generally considered an altruistic activity, intended to promote good or improve human quality of life. It is considered to be serving the society through one’s own interests, personal skills or learning, which in return produces a feeling of self-worth and respect, instead of money. Volunteering is also famous for skill development, socialization and fun. It is also intended to make contacts for possible employment or for a variety of other reasons. Volunteering takes many forms and can be performed by anyone with his or her own set of skills. Many volunteers are specifically trained in the areas they work in, such as medicine, education, or emergency rescue. Other volunteers serve on an as-needed basis, such as in response to a natural disaster or for a beach-cleanup.
6. Social responsible business practices: This encompasses programmes and systems that a company can put in place to increase the safety and well-being of individuals. Companies can seek to establish systems to ensure that human rights are upheld within the supplier network and to help improve the livelihood and welfare of its suppliers. In addition, companies can also improve the lives of employees by ensuring workplace safety, dealing with work-life balance issues. Organizations can put socially responsible practices in place to improve customer safety and to educate consumers on how to use the products safely. One reason why business is taking on more social responsibility is that large institutions are failing us. Political strife and overwhelming debt crises are crippling governments around the world and, in turn, are infuriating their already jaded citizens. In many countries, the church has faded from a strong role in many citizens’ everyday life, even here in the U.S., which arguably is the most spiritual and religious nation in the industrialized world.
And despite the U.S. foray into two wars abroad, the fact is that our military does not have the huge impact on daily life the way it did even a generation ago when U.S. bases were ubiquitous at home and abroad. A smaller, leaner and technologically advanced military in part means that for many Americans, the only military they know about is through the updates they receive on cable news. And while there is still angst about outsourcing, off shoring and downsizing, the fact is that at least on this side of the pond, business has an opportunity to fill in some cracks and make a difference where they operate. Campbell Soup Company, for example, has been aware of the impact its consumption of water can have on local communities, and has worked within those towns to become m. And in the company’s headquarters in Camden, NJ, Campbell’s employees are working with local schools and non-profits to improve local’s children nutrition and overall well-being. Other companies are undertaking research and development projects that can help develop better and more sustainable materials.
Nike is one such example; it is working with hackers and NASA on a bevy of projects from finding better to waste diversion. And with livestock production having a huge impact on the globe’s greenhouse gas emissions, puma’s search for a viable alternative to leather could pay huge dividends in the long run. It is a stretch for now to assume that these and other companies could fill the huge shoes of both the U.S. space and defense programs and their lasting legacy during the post World War II era. Companies have not found the next Internet, GPS system or even smoke detector (all emanating from the defense and space programs), but the fact that more companies are joining and sharing, not hoarding, their technologies does give hope that the future can be cleaner.
Finally, more companies are realizing that treating their employees well is not only ethical, but also a business differentiator. In an era where many retail employees struggle to the point that they are on food stamps while working full time, Costco offers a great shopping experience for its customers while providing its employees competitive wages and generous health insurance plans. Zappos’ unconventional corporate culture and a focus on fun has made customer service jobs far more than just serviceable. Method rounds out the pack with environmentally responsible products and a spirit within the company’s offices that inspires creativity resulting in great products.
2.5 ways of encouraging social responsibility
There are two ways of encouraging business organizations to develop a sense of social responsibility:
1. They can be enforced by law
2. Entrepreneurs can be persuaded to do it willingly
Examples of government agencies set up in Nigeria to monitor the activities of business organizations and protect the community from destructive activities such as hazardous product, pollution and substandard products respectively are: 1. Federal environmental protection agencies
All this regulatory bodies are responsible for the regulation of business activities. If they do not put to check the activities of organizations, they may as well, do whatever that like in their organizations, some which might even put the lives of innocent consumers into jeopardy.
3.6 different perspective of CSR
The idea of Corporate Social Responsibility, CSR, first appeared in the late 1960s in response to the need for businesses to address the effect of their pursuits on the environment and society, in addition to the interests of their shareholders. CSR attempts to portray corporations as responsible citizens who are concerned with issues of social and environmental welfare.
1. The public/ customers:
CSR argues that corporations bear responsibility for the effect they have on other sectors of society. The activities of corporations have an impact on individuals who don’t work for them and don’t buy their products, through, for example, secondary economic impacts and degradation of the natural environment. CSR acknowledges this, and attempts to make the interactions between corporations and society positive and productive. This can be done by consulting with neighbors and citizens who are affected by corporate activities and by striving for transparency in corporate pursuits so that the public knows what is going on.
Corporate social responsibility (CSR) activities have the potential to create several distinct forms of value for customers. It is the customer perception of this value that mediates the relationship between CSR activities and subsequent financial performance. By categorizing major CSR activities and the different types of value each can create, this report offers a number of practical recommendations to business leaders embarking in CSR programs for their companies. Investments in CSR activities are under scrutiny. Boards and shareholders are increasingly demanding that outcomes from these investments be measured to understand if and how they positively impact the profitability of the firm. Not surprisingly, a significant amount of research has been undertaken to understand the relationship between CSR and profitability.
2. The environment:
Increased knowledge on the part of the public about declining resources, toxic waste and global warming is compelling companies to make more efforts to be more environmentally benign. The traditional view that the natural world is merely a source of materials and an equally convenient dump for waste is being challenged from many quarters, and CSR is an attempt by corporations to respond to these concerns. The sincerity of changes being made on the part of corporations includes some serious efforts to achieve sustainability and other efforts that are essentially “green washing,” activities in which corporations put more effort into appearing green than into actually being green.
CSR challenges the traditional wisdom that the interests and needs of the clients of a corporation will be adequately protected by the market itself. Because the free market has been severely compromised by a combination of government subsidies and manipulative marketing practices, CSR attempts to remedy this situation by installing practices into corporate life that will monitor the interaction between corporations and their clients in an attempt to ensure that nobody is being exploited or cheated. Consumer protection can be enforced by the government or voluntarily pursued by companies, the latter course have clear advantages for the public relations of the company.
Staff and employees of corporations have a right to expect fair pay, safe working conditions and meaningful work. CSR is one aspect of a transformation in the corporate world that attempts to overcome archaic views of workers as mere means to an end on the part of shareholders. Particularly in less developed countries that are often the sites of intensive resource extraction, the treatment of labor is frequently substandard. CSR is intended to promote the rights of all workers and to ensure that corporations respect these rights and make whatever changes are required to prevent the exploitation and mistreatment of labor.
After a lot of brain storming on the topic corporate social responsibility, we were able to come down to this piece based on various researches. It is pertinent to note here that CSR as being clearly defined and given justice to. We have being able to define what CSR means to different people and by so many authors who would later be referenced. Also, we have been able to look at the foremost benefits and importance of what CSR is, different features, types of CSR, ways of encouraging social responsibilities all in bit by bit for the understanding of whoever see this piece. In the light of this, we can say justice has been melted out on the assignment and research of corporate social responsibilities
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Responsibility. Academy of management Review, 32(3): 194-967 * Mullerat R (2009), “International corporate social responsibility: the role of corporations in the economic order of the 21st century”, Kluwer Law International, Netherlands, pp 14. * http://en.wikipedia.org/wiki/Globalization