Corporate Socials Responsibility

Question: Describe about the corporate social responsibility. Answer: Introduction Corporate social responsibility (CSR) also referred to as corporate citizenship or corporate governance has become one of the most of debated issues in the present day business discussions. There are many views about what constitutes CSR, why it is important and how to integrate CSR into the business culture of an organization. Essentially, CSR is form of corporate self-governance and a long-term commitment of an organization to conduct business in a socially responsible, sustainable and ethical manner (Carroll 2015). Corporate social responsibility is a means of incorporating ethical business practices and regulations into the business organizations and its operations. This essay, therefore, aim at discussing and analysing corporate social responsibilitys contemporary controversies and architecture. In the modern business context, the role of CSR has become even more important, as it aims at sustainable development and increasing organizations participation in community development. Therefore, it is important to understand what are the current trends in the CSR and how the CSR activities of corporations are defining the business environment and what are its future implications. Corporate Social Responsibility Corporate social responsibility can be defined as a business approach that aims at sustainable development by delivering economic, social and environmental benefits for all the stakeholders. CSR, however is a very broad term and includes many elements such as corporate governance, health and safety, environmental issues, human rights, and contribution to economic development of stakeholders. Although, CSR many definitions the underlying principle is to drive change towards sustainability (Pedersen 2015). The current discussion on CSR aims at finding the right answers to questions such as how an organization can generate legitimate profits? What should be considered a fair distribution of a corporations wealth between shareholders, employees and the society? Are companies are required to put part of their wealth back into the society? Can markets be relied upon to set fair prices of labour, resources and products? Do government needs to monitor corporations CSR? (Preuss 2013). Business ethics being a part of the broader concept of CSR has always been a hot topic. It is the responsibility of business corporations to serve the society where it operates. In spite of all issues related to what constitutes ideal definition of CSR and how an organization can integrate CSR in the core business policies, there are some companies that have set good examples for other corporations to follow. CSR when implemented and incorporated in the true sense can lead to many benefits to the organizations that cannot be analysed immediately but has long term positive outcomes. CSR helps in character building of the organization and helps in enhancing brand value and sustained business operations. There are some organizations that have taken the concept to a whole new level by being socially and environmentally proactive about organizational roles and responsibilities in relation to its stakeholders and the society it serves (Weiss 2014).One such example can be Starbucks. The company has pledged to provide full tuition fees to its employees for all four years of college with no commitment to stay back with Starbucks post graduation. Over the past few years, the company has undertaken many steps to help in the development of its stakeholders. The company had voluntary shared its profits with its employees by providing them with health care facilities, pre-tax stock gains and pension contributions (Korschun et al. 2014). Previously corporate social responsibility has been understood as the charity or philanthropic works performed by business corporations. In addition, due to increasing concern for the environment, business corporations actively started undertaking initiatives to conserve the environment. However, the concept of CSR is very broad and includes business ethics, legal compliance, community investments, employee welfare, transparent reporting of financial statements, environmental management, sustainability, bio-diversity conservation, human rights, corporate governance, and fair and transparent business practices (Aguinis and Glavas 2012). The current trends in CSR focuses on both internal and external stakeholders of the organization i.e. employees, shareholders, and community as a whole. The CSR aims at building a long-term and mutually beneficial relationship with the organizations stakeholders and society by large. Business corporations need to develop voluntary and mandatory reporting relating to the business. The general principles of ethics and morality should be incorporated into the business practices in such a manner that business generates sustainable wealth for itself and help in development of society and environment (Cheng et al. 2014). In spite of extensive discussion on the CSRs main objectives and, how it can help the organization, society, and environment in achieving sustainable development, there is huge difference between theory and practice. Most of the business organizations see corporate social responsibility activities as means of hiding their unfair business practices and presenting a favourable image of itself in the society. The emergence of various scandals in the recent past validates this point (Ragas and Culp 2014). For instance, the financial scandal of Enron Corp. not only lead to bankruptcy of the business but also severely affected its stakeholders such as employees, shareholders, society and government. It is the responsibility of business to help in the wealth maximization of it stakeholders and follow fair business practices to protect the interests of its stakeholders. Volkseagen exemplifies the similar breach of CSR core policy. Volkswagens emission scandal that was due to companys fiddlin g of diesel exhaust pollution tests comes under the purview of unethical business practices. On the one hand, the company presents itself as socially and environmentally responsible business while at the same time indulges in such unscrupulous business practices that puts the environment at risk (DesJardins and McCall 2014).The Volkswagens case is a classic example of CSR failure. The company deliberately developed defeat devices (software) that have circumvented the emission tests and this has helped the company to become number one carmaker in the Germany. The company has completely ignored the principles of corporate social responsibility and manufactured and marketed cars that produce 40 times of the permissible nitrogen oxide emissions. This had serious environmental implications that slowly poisoning the environment and put the interests of its stakeholders at risk (Schneider and Schmidpeter 2012). In the light of these two examples, it can be said that business corporations are not as responsible as it expected of them. To maximize profits, defeat competition, and to achieve success, companies are deliberating violating the principles of business ethics and corporate governance. The practices such as falsification of accounting reports, excessive exploitation of natural resources, unfair trade practices, violation of human rights at factories (especially in underdeveloped and developing countries), environmental degradation are still in practice and corporate social responsibility has become just a kind of obligation or compliance that corporations undertake (Mirvis 2012). As mentioned, the underlying principle behind corporate social responsibility is to device means for sustainable development and doing business in a ethical manner so that overall development of the society can achieved. CSR is a form of corporate self-governance and it is necessary that business follow the principle of integrity and ethics. However, as evident from the cases of Enron and Volkswagen that business corporation are still struck in the industrial age where the sole purpose of business is to maximize profits at any cost. CSR has become a mask under which corporations hides their true intentions and tries to present a positive or socially responsible image. Therefore, it is important for the government to closely monitor businesses internal operations and CSR practices being followed by corporations, as business corporations have not been able to monitor and internally govern unethical and unfair business practices (Vogel and Trapp 2014). Corporate governance is determined by corporations internal code of ethics, vision and mission statements and leadership style. Although, CSR is determined by free market conditions and organizations self-responsibility towards the community they serve, it may be beneficial for the community if the government supervises and controls the CSR of business corporations. Government have better understanding of community needs and business organizations works better under legal regulations rather than the free market. Government can enforce moral and ethical principles on indifferent corporations (Servaes and Tamayo 2013). CSR is something that requires normative and descriptive study, government involvement, legal framework, and market dynamics. CSR is quite important for decision-making and actions since it is related to director, managers and other participants from corporate sectors. For instance, Australia has taken major CSR regulatory inquiries in 21st century. Being a member of G20 it is one of the biggest economies in Asia pacific region which has increased its significance towards creating sustainability framework and investment (Cavico 2013). Recent debates regarding the CSR Strategy are mainly concerned about the fair distribution of organizations wealth between the shareholders, employees and society. CSR, which is the global challenge of 21st century, can be explained in many different angles. It focuses on governmental, legal and business framework and corporate responsiveness to the system of governance and ensures responsibility in todays business environment. Many public, private and community sectors are engaged in CSR activities. They have taken measure to standardize CSR initiatives in UN, EU, UK and a host of other countries which are involved to review the CSR issue in their corporate policy and practices. Todays CSR is characterized by increasing public awareness which has taken it to a new level (Ofodile et al. 2012). A recent study has revealed CSR in USA has drawn clear lines between political and business responsibility and raised skepticism towards CSR for being socially responsible (Korschun et al. 2014 ). New rules and regulation should be implemented in practicing CSR. In this essay the concept of CSR strategy and the different dimensions of this concept have been analyzed. How the strategy is affecting the modern business industries and the different types of use of the strategy are the major parts of the essay (Mousavi et al. 2013). The purpose of CSR is to improve the standard of the business with societys expectation. It reflects a good image of the company, providing competitive advantage and influencing decisions of the management to create sustainable environment (Lins et al. 2015). The business environment has become more competitive and to bring success in business it has to build relationship with stakeholders, communities, and suppliers. Therefore, maintaining these relationship focuses on people centric corporate strategy which identifies the need of corporate social responsibility (Rossouw and Van 2013).The management seeks to achieve optimal balance by giving response to diverse group of people those are impacted by its decisions and those have a stake in the business. While explaining CSR each enterprise responses to CSR in its own way which is dependent on the core competency and the interest of shareholders (Kitzmueller and Shimshack 2012). Hence social responsibility is a vision that symbolizes i ts relationship with the business and society. It is considered as investment which is a continuous process and need continuous improvement. It is linked with profitability in terms of improving the community where the company operates the business, ensure fair wages, pay taxes, it invests in services (Kilkenny 2014). Conclusion From the above discussion, it can be concluded that corporate social responsibilities are one of the main aspect of business development and business organizations need to develop their CSR in such a manner to benefit its stakeholders and community by large. The principles of business ethics and morality of doing business must be the guiding principle for an organizations CSR. In spite of, its importance in business development and long-term benefits, many organizations view CSR as a necessary evil and have adopted superficial policies to comply with the legislative requirements of business. However, those organizations who have adopted CSR in its true spirit enjoys greater trust from the community. The business organizations are focusing in this area for improving the brand image, internal business structure in order to get the sustainable competitive advantages. In this area, the employee benefits, customer loyalty, shareholder engagements are the important factors of the business strategy for practicing the corporate social responsibilities. Both the social and environmental development are important for achieving the desired level of success in the business operations. It is the responsibility of the business organizations to contribute in the development of a better, healthier and cleaner environment and society. In this concern, the core business activities should be properly aligned with the goals of the CSR. It has been found that the business organizations with good CSR practices perform better and achieving success in long term growth. After analysing all the concerns of the CSR strategies and practices, it can be said that the CSR practices have become must for the business organizations. References Aguinis, H. and Glavas, A., 2012. What we know and dont know about corporate social responsibility a review and research agenda.Journal of management,38(4), pp.932-968. Brammer, S., Jackson, G. and Matten, D., 2012. Corporate social responsibility and institutional theory: New perspectives on private governance.Socio-Economic Review,10(1), pp.3-28. Carroll, A.B., 2015. Corporate social responsibility.Organizational Dynamics,44, pp.87-96. Cavico, F.J., 2013.Corporate Social Responsibility. ILEAD Academy. Cheng, B., Ioannou, I. and Serafeim, G., 2014. 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