Corporate Responsibilities And Ethics

There exists no universal definition of the term corporate social responsibility. Hence, we could refer it as a transparent business practice where it is build on the basis of respect, ethical values and compliance with the available legal requirements for people, community and the environment. Besides the profit factors, companies should be responsible for the impact totality on the people and the planet at large. In corporate social responsibility, it refers people as the company’s stakeholders who are; the employees, business partners, customers, investors, suppliers, community and the government (Dopers& Halme, 2009). Therefore, for most stakeholders they expect that companies should consider the environmental and social responsibility while business is conducted. Therefore, it is observed that in the business community corporate social responsibility alternatively known as corporate citizenship is the essential means that a company should consider for good neighbours, whom are the host community (Wong, 2013).   

The entirety of CSR at times is discerned from the three words that are contained within its title phase; corporate, social and responsibility. Hence, in broader terms, CSR tends to be a cover of the corporate responsibilities to the society where they are based and conduct their daily business. But, in a wider sense CSR is business identifying procedure for stakeholders groups and incorporation of needs and value that are strategic and are involved during day to day decision making process (Kaur, 2016). The CSR factor also goes beyond the occasional community service action, this is because it tends to drive factors such as; strategic decision making, hiring practices, brand development and partner selection (Okafor, 2014). As discussed CSR is all about business and organizations that go beyond the legal obligation of management and have impacts on the environmental or society. In particular, this could include how organizations interact with their customers, suppliers, employees and the community where they operate, and the extent they undertake in protecting the environment.

Argument in Favour of Companies Practising CSR

In the current business world, more firms have come to realize that for the sustenance of productivity, competition and relevance in this rapid changing business world, there is the need of considering the factors of social responsibility. For almost a decade, globalization has blurred nations border as well as technology which accelerate time and distance. Hence, with this sea change in the corporate world, companies have seen the need of increasing their ability to manage their profits and risk, as well as protecting their brand (Stu?Ckelberger & Mugambi, 2009). As a result, of globalization there tends to be fierce competition for the skilled employees, investors, employees and the consumer loyalty factor. Therefore, businesses have realized that their relation with host communities and market place could contribute to their sustainability in business success(Stu?Ckelberger & Mugambi, 2009)

Still on arguments that are in favour of CSR business, it starts with the believe that is in business long term, and the self interest of being socially responsible. Therefore, the view of CSR to business holds that if businesses want to have a healthy climate they must take action that would that ensures their long term viability. Hence, firms using this act of taking action that ensures long term viability are likely to succeed in their operations because of the business promotion act between them and the community (BSR, 2011).

Second argument in favour of companies practising CSR is that it tends to ward off the governmental regulation. Hence, this comes out to be a practical reason where it is build on the basis of ideas that may be pertained by future government intervention. Hence, it can be forestalled to an extent where business policies are self-disciplined and fulfil the society expectations.

Thirdly, CSR provides that business have resources and they allow the business to try. Hence, these two factors tend to maintain that since businesses have reservoirs of managing talents, functional expertise and capital, and since other have tried and failed to solve the social problems, businesses have now the platform of doing so (Okafor, 2014). Hence, this shows that CSR creates some form of harmony between the community and business. Therefore, it would tend to favour their operations in the corporate environment.

Another justification that tends to favour CSR is that of pro-acting being better than reacting. Hence, this means that such an approach is more practical and cheaper that simple reaction to social problems once they have emerged. Hence, the considerations of CSR in firms tend to be effective in the sense that it avoids high levels of uncertainties when issues emerge.

Lastly, firms are required in the current world to engage in CSR because of the strong public support. Today, we have witnessed that the public service believes that in pursuit of profits, business are held responsible for their workers, communities as well as other stakeholders, even if for them to make things better will involve sacrificing on their profits (BSR, 2011). Therefore, we would expect that firms considering this factor promote the society, as they protect their brand and reputation on the community they are based under. 

What are the Arguments Against Companies Practising CSR?

As stated above more companies have realized that for them to remain productive, competitive and relevant in the business world, they have to consider the social responsibility factor. But, there are arguments developed that state that companies shouldn’t consider the CSR factor as it is not the duties of firms in conducting social responsibilities issues they should only focus on wealth maximization of the shareholders.

Firstly, companies’ main purpose or role is to create products, and ensure that that they provide services to the community rather than handling welfare issues. They also fail to have the expertise or knowledge in regards to handling social problems. Hence, this means because of poor expertise in welfare activities companies would need to employee welfare manager which tends to be an expense to the organization. There could also be managers intervention in the welfare issues, as a result it would be witnessed that they are not performing their primary roles of the company to full capacity (Wong et al, 2015). Hence, this could lower the levels of profits margins since managers aren’t fully utilizing their expertise potential.

The factor of social responsibility tends to damage a company in regards to the global marketplace. The issues of cleaning the environment, ensuring product safety and money donation or welfare issues increase the company’s expenses. Therefore, in the end we would expect that the cost will be passed to the consumer through the final prices of the product that the firm produces. Since, customers may be willing to pay more in purchase of the product other may not be (Wong, 2013). Hence, this could place a company at an economic disadvantaged situation. Hence, such a factor tends to discourage the firms in engaging in welfare activities because of the expense, and could lead to increased prices of their goods.

Thirdly, with the current situation of economic recession firms are striving so as to keep their business in-check. Therefore, the adoption of the CSR strategy tends to reduce the viability of firms persevering in these hard economic times. Hence, firms practising CSR have a hard time of trying to survive the hard times.  Take the example of large firms they tend to have lots of resources at disposal, but for smaller firms who are fighting to survive the picture tends to be different. This is because one can’t afford to go spending money on some unnecessary frills while you lay off the core business of the firm (Prof. Luca Nannini, 2011).  It would also be hard for employees to work with firms whose sole operation is ineffective because of social welfare consideration. Sometimes, the welfare issues may lead to loss of valuable and precious time that could have been used in solving issues that primarily affect the firm. Hence, this argument shows that CSR tends to limit the potential of performance, thus it should be avoided at all circumstance.   

Highlight the Efforts of Companies leading to CSR

The existing simple argument for social responsibility is that it’s the right thing that should be done. Some of the problems found in our society have been as a result of corporation establishment with issues such as pollution and poverty level wages. Hence, it is ethically responsible for companies to correct these emerging wrongs.

At times companies’ posses large amount of resources at disposal. Therefore, there exceeding resources at disposal could be seen as a catalyst that works on reducing society problems, thus one should use them in solving social issues that affect the society (Kaur, 2016).

Another effort pertained to companies leading to CSR is that businesses would face issues of corporate legal requirements. Hence, in some instance the government may create regulation and may establish fines to corporations. This is especially been a case in the pollution issues. Therefore, firms would prefer to engage in social welfares so as to avoid issues of fines and other legal requirement.

At times business may create efforts of policing themselves, thus this reduces their viability of government intervention. Hence, they could consider the social responsible issue that are profitable. Since, it is hard for firms to prosper and maximize shareholders value by solving social problems (Dobers & Halme, 2009). Such a CSR effort may be a good way of building positive public relation, and attracting the top most talent in the industry.

Conclusion

In conclusion, CSR tend to be a significant tool because it mobilizes resources that address development both socially and business-wise. CSR also tends to stimulate new technologies and investments that bring new actors and ideas in the corporate sector. Thus, it is a significant tool that promotes productivity and social change.

References

Wong, C. W. Y., Lai, K.-H., Lun, Y. H. V., & Cheng, T. C. E. (2015). Organizational Capabilities.

Prof. Luca Nannini, & Zhang, Lingyan. (2011). The Corporate Social Responsbility in CHINA. Pisa University. http://etd.adm.unipi.it/theses/available/etd-05272011-204914/.

Wong, C. W. Y. (2013). Leveraging Environmental Information Integration to Enable Environmental Management Capability and Performance. Journal of Supply Chain Management. 49, 114-136.

Kaur, I. (2016). CSR in Hotel Industry in India.

Dobers, P., & Halme, M. (2009). Corporate social responsibility and developing countries. Corporate Social Responsibility and Environmental Management. 16, 237-249.

Corporate Social Responsbility: Mitie is raising vocational skills in schools and changing the life prospects of young people as a core part of its CSR.PREMISES AND FACILITIES MANAGEMENT. 22-23.

Okafor, C. E. (2014). Ownership and corporate social responsbility: an empirical investigation on data from the Nigerian industry.

It Governance Research Team. (2008). Green IT: reality, benefits and best practices. Ely, U.K., IT Governance. http://www.books24x7.com/marc.asp?bookid=36121.

Winter, G. (2006). Multilevel governance of global environmental change: perspectives from science, sociology, and the law. New York, Cambridge University Press.

Stu?Ckelberger, C., & Mugambi, J. N. K. (2009). Responsible leadership: global and contextual ethical perspectives. Nairobi, Kenya, Acton Publishers.

Business For Social Responsbility (Organization). (2001). Values in action: formalizing your company's values. San Francisco, CA, Business for Social Responsbility.

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