Theories of the Four-Part Model of Corporate Social Responsibility - Term Paper Example

Contemporary Management Issues1 Table of Contents Introduction 3 Corporate Social Responsibility 4 a. Theories of the Four-Part Model of CSR 4 Economic Responsibilities 5 Legal Responsibilities 6 Ethical Responsibilities 6 Philanthropic Responsibilities 6 b. The Application of Four-Part Model of CSR of Oman Oil Company 7 Business Ethics and CSR 10 a. Theories of Business Ethics and CSR 10 b. Application of the Theories on the Challenges Facing the Organisation 11 Conclusion 12 13 References 14 Introduction In the present day context, the business scenario has changed to a large extent due to factors that include globalisation and advent of technology. In this regard, organisations with the aim of conducting their operations with better sustainability are focusing on the concept of Corporate Social Responsibility (CSR) policies. Organisations of varied sectors are performing CSR activities to enhance their sustainability. CSR is regarded as a vital aspect for the development of a corporate identity. Nowadays, public as well as private organisations are taking effective steps in performing social activities to enhance their brand image and to conduct operations with better social initiatives for the development of a community as a whole (Hohnen & Potts, 2007). In the year 1996, Oman Oil Company (OOC) was established and it is owned by ‘Government of the Sultanate’. The company deals with petroleum products and natural gases. Contextually, OOC is regarded as the main base of the Omani economy. The company is also considered as an important source of Foreign Direct Investment (FDI), which is accountable for the development of the economy as a whole. In addition, the company has participated in CSR activities in national as well as international level. The company has adopted CSR policy as an integral part of business strategy with the aim of ascertaining that business operations are performed for the development of communities as a whole. Every year OOC contributes millions of funds for local community development. Moreover, it is worthy to state that OOC has achieved awards for its CSR activities in national levels. As a part of the CSR activity, OOC developed a partnership with “Oman Society for Petroleum Service (OPAL)” to provide technical and vocational training to local youths and its present employees (Oman Oil Company, 2012). In this regard, the objective of the essay is to highlight Four-Part of Model of Corporate Social Responsibility activity. The four-part model of CSR comprises economic, legal, ethical and philanthropic, which are described on the basis of CSR policies adopted by OOC. . Moreover, the essay describes the challenges faced by the company in the areas of business ethics and CSR activities. Corporate Social Responsibility a. Theories of the Four-Part Model of CSR Globalization has transformed the picture of organisations. In modern scenario, organisations have used varied kind of activities to enhance their growth level. Notably, CSR is an activity, which makes a particular organisation different from others. Moreover, CSR is regarded as a new form of business strategy to maintain sustainability of an organisation. The concept of CSR has been effectively defined with the assistance of four-part model. This four-part model has followed a hierarchy, which included four responsibilities such as economic, legal, ethical and philanthropic (Carroll & Buchholtz, 2014; Schwartz, 2011). The four-part model of CSR is also identified as Carroll’s CSR pyramid. The below graphical diagram illustrates Carroll’s four-part model of CSR. Carroll’s Four-Part Model of CSR Source: (Carroll & Buchholtz, 2014) Every organisation has to perform varied kind of responsibilities to maintain an effective relationship with stakeholders for future growth and development. With the help of varied CSR responsibilities, an organisation can move to a higher level in terms of performance and sustainability. In this regard, four-part model defines four kinds of responsibilities, which make an organisation more liable and diverse from other organisations (Schwartz, 2011). The four-part model is described hereunder. Economic Responsibilities For every organisation, economy is one of the vital elements. Every managerial leader has framed diverse strategies to enhance the level of profit. The main aim of economic responsibilities is to make an organisation profitable in the long run and to improve earnings per share. Similarly, organisations with the intention of maintaining strong competitive position and high level of operational efficiency are recognised to adopt CSR policy. The economic responsibilities of an organisation are identified to be to improve job opportunities, enhance investment level and tax payments among others (Schwartz, 2011). Legal Responsibilities The main aim of legal responsibilities is ‘obey the law’. Every organisational structure is needed to be based on certain policies along with procedures. In addition, organisations are required to conduct operations on the basis of legal obligations. The important objective of legal responsibilities is to develop an effective relationship with government officials. With the help of correct legal support, organisations are able to conduct operations in a lawful and with better growth prospects (Carroll & Buchholtz, 2014). Ethical Responsibilities Every organisation has to attain achievable goal with due ethical considerations. To be a responsible citizen every managerial leader has to perform organizational responsibility in a more ethical way. Every organisation has to maintain corporate integrity and ethical behaviour to reinforce future economic growth. In this regard, organisations in terms of legal responsibilities are required to adopt codes and standards based on which operations are performed with better governance and ethnicity (Schwartz, 2011). Philanthropic Responsibilities Nowadays, every organisation works as charitable institute to improve natural resources. To remove the monotony of professional life, organisations have organized charitable activities with local non-governmental associations. With the help of philanthropic responsibilities, organisations are able to enhance local people’s ‘quality of life’. Through philanthropic responsibilities, organisations have been able to develop an improved profile of a particular employee. The philanthropic responsibilities are one of the prime sides of CSR in an organisation, as funds are accumulated for investing in social projects (Carroll & Buchholtz, 2014). b. The Application of Four-Part Model of CSR of Oman Oil Company Every multinational are identified to be adopting four-part model of CSR to enhance their growth and sustainability. Notably, CSR activity is one of the essential parts of OOC. The company has named its CSR activity as ‘corporate sustainability programs’. As a government owned company, OOC has provided strong economic support to the development of the Omani economy. As per Correll’s Four-Part Model of CSR, OOC has been performing economic, legal, ethical and philanthropic responsibilities in an efficient manner. To enhance its economic growth, the company has adopted different CSR practices. The company has used Strategic Business Units (SBU) to increase its economic level. With the help of SBU, the company has also supported the Omani government as well as private institutes financially in terms of attracting FDI. The economic responsibilities main aim is “Be Profitable”. The SBU helps the company to maintain its strong position and efficiency level (Oman Oil Company, 2012). Moreover, as a part of economic responsibility, OOC is taking steps to provide healthy business units in the society. OOC is also creating positive aspects by providing employees with fair salaries and proper environment as a form of CSR activities (2Oman Oil Company, 2012). It is to be noted that OOC is devoted towards its society and people through its social activities. As a CSR initiative, the company is applying the philanthropic responsibilities by organising sports, charitable events and providing education for the welfare of the society. Moreover, the company is taking immense measures to provide proper training to its employees, so that the organisation can work effectively and help in enhancing the economy of a country. With the help of legal and ethical responsibility, the company has designed a vibrant networking system with government as well as non-governmental organisations. In this context, the company has been recognised to be arranging training session with joint collaboration with OPAL. The main initiative of the company is to provide training for employment, entrepreneurship and SME support for building competency level of youths. These are the various ways based on which the company has performed its philanthropic responsibilities. On the other side, through training programs, the company has developed contracts based on which different services relating to Omani children education, health and sports development are provided. The training program has been recognised as ‘Sharikati’ and ‘Ghaytuh’. To implement the Sharikati program in Sultan Qaboos University and Higher College of Technology, the company has signed an agreement with Injaz Oman (2Oman Oil Company, 2012). On the other side, Ghaytuh is a youth entrepreneurship program designed for school students to develop their leadership skills and original business ideas. In 2012, the company has taken the initiative to enhance general business knowledge amid people in the Omani society (2Oman Oil Company, 2012). Another responsibility taken up by OCC is regarding providing lectures on strategic planning and skills development, which would help the development of the workforce in the long run. This is a social and ethical responsibility of the company for the betterment of the society. As a responsibility towards the society, the company is providing support to the people involved in enhancing professional skills for the welfare of the society. There are several other activities provided by the company among which is the sponsorship event. This event is important as a part of the CSR activities for the welfare of the society and the people. The company in the form of responsibility is encouraging people to be involved in cultural and creative arts for a better livelihood. Moreover, OOC is meeting its legal responsibility by adhering to the government policies and maintaining the environment (2Oman Oil Company, 2012). The ethical responsibility of the company is linked with the guidance provided to the employees in the form of training, so that the employees follow the same mission and vision, and work for the betterment of the society and the company. OOC is also taking measures to support the disable people as well as the small and medium enterprises for the development of the society at large. OOC also ensured that for the effectiveness of the CSR activities, it is vital to have a comprehensive vision, innovation as well as cooperation (Carroll & Buchholtz, 2014). OOC is taking measures to fight for the rights of children in Oman by exercising its power and ethical responsibility towards the society. The company is also providing jobs to people by providing them support and training, so that they can earn fair wages for a better livelihood. In the present day context, it can be stated that CSR not only deals with social responsibility, but also provides competitive advantages to the organisations for long term sustainability. By implementing the CSR model, the company is able to gain greater access to capital, improve brand image in the market, motivate employees and increase the rate of retention, and reduce the risk through sustainable activities (Maaytah, 2009). Thus, it can be observed that with the applicability of CSR activities, OOC has gained a strong market in the country. Business Ethics and CSR a. Theories of Business Ethics and CSR Business ethics is an important concept for the long term sustainability of an organisation. It reflects the code of conduct that an organisation needs to follow for the success within the competitive environment. Ethics is of great significance for the success of an organisation, as it helps in proper decision making. Moreover, it is regarded as a concept, which reflects about the ‘right and wrong’ within a workplace at the time of dealing with various aspects relating to conflicts and cultural differences among others. Ethics implies that an organisation is adhering to all its responsibilities with the aim of accomplishing CSR objectives. There are various features of business ethics, which are to be followed by an organisation. In this regard, it can be stated that OOC maintains business ethics along with CSR for its long term sustainability in the market. The theory of business ethics implies to the behaviour and attitude of the company towards the society. Ethics and CSR are interrelated to a considerable extent. It is to be noted that a company with good ethics are able to create a better environment for the society. In other words, business ethics depicts the behaviour of an organisation while conducting its business activities. With a positive business ethics, an organisation will be able to maintain a good relationship within a society and ensure greater responsibility through quality products and/or services. In this context, it can be stated that OOC follows ethics in its activities in order to ascertain transparency and integrity within the workforce and for its sustainability. Moreover, with the help of ethics and by maintaining proper code of conduct, OOC is facilitated with the opportunity of maximising its resources (Frederiksen & Nielsen, 2013; Werhane & Singer, 1999). As per the theories of business ethics, it can be stated that with proper applicability of ethics in business, the power of the same can increase to a considerable extent. In this context, malpractices within a business can be minimized with the help of appropriate business ethics and this was the case in OOC. Due to a strong business ethics, employees maintained transparency in their activities. The CSR activities of the company also depend upon the ethics of the business and the guidelines followed within the workplace. There are various forms of ethics in a business that include Utilitarianism, Rights, Egoism as well as Justice. Utilitarianism refers to the net benefit of an organisation as well as a society. Right is another theory, which deals with the legal as well as moral actions (Slideshare, 2014). These theories of ethics help a business to perform effectively by following proper guidelines and meet the social responsibility. Thus, it can be stated that there is a strong relationship between CSR activities and business ethics (Frederiksen & Nielsen, 2013). b. Application of the Theories on the Challenges Facing the Organisation The theories of business ethics are effective for the success of an organisation. Business ethics and CSR activities together affect the functioning of an organisation. An organisation with proper code of conduct and CSR activities is able to mitigate challenges and gain competitiveness. The objective of OOC is to earn profit and maximise its resources following ethics and code of conduct. In this regard, the ethical theories will help the company to take steps regarding the activities in a well-organised manner by maintaining transparency and integrating activities. The theories state about the just, right and benefit of the organisation by ethical means without hampering the society. There are various challenges that the company faces, which leads to risk (Werhane & Singer, 1999). The challenges faced by any company can be mitigated by the use of proper strategies, ethics and responsibility. These theories are effective as they state that every individual within the organisation must be treated properly. Adhering proper rules and regulations are other important criteria that are to be followed within the organisation for greater efficiency. As stated earlier, it is notified that CSR plays a vital role in enhancing business activities. Ethical responsibility is also a part of the CSR activity, which is to be fulfilled for the profitability as well as growth of the OOC. The challenges faced by OOC can be mitigated by taking proper as well as right decision and ethical consideration with respect to the society as well as organisation (Roa, 2007). Conclusion CSR and business ethics are the two most important aspects for the success of an organisation. CSR depicts the activities taken up by an organisation for the benefit of a society. In addition, business ethics are the rules and regulations that are to be followed for the growth and expansion of a business in the long run. In this regard, OOC has adopted various CSR activities such as supporting education and more for the benefit of the business and the society as a whole. Ethics was also followed by OOC for its long term sustainability in the market. Transparency and ethics is considered as a vital element for the success of a firm. References Carroll, A. & Buchholtz, A., 2014. Business and Society: Ethics, Sustainability, and Stakeholder Management. Cengage Learning. Frederiksen, C. S. & Nielsen, M. E. J., 2013. The Ethical Foundations for CSR. Springer-Verlag Berlin Heidelberg, pp. 17-33. Hohnen, P. & Potts, J., 2007. Corporate Social Responsibility: An Implementation Guide for Businesses. CSR Guide. [Online] Available at: http://www.iisd.org/pdf/2007/csr_guide.pdf [Accessed December 18, 2014]. Maaytah, D., 2009. Partnerships Mapping in Oman: Overview of CSR Activities. UNICEF-Oman Country Office, pp. 3-67. Oman Oil Company, 2012. Welcome To Oman Oil Company S.A.O.C. Home. [Online] Available at: http://www.oman-oil.com/index.php [Accessed December 18, 2014]. 2Oman Oil Company, 2012. Corporate Sustainability. Home. [Online] Available at: http://www.oman-oil.com/CSR.html [Accessed December 18, 2014]. Pourmohammadi, E., 2014. Oman Oil Initiative to Aid the Disabled. Times of Oman. [Online] Available at: http://www.timesofoman.com/News/40684/Article-Oman-Oil-initiative-to-aid-the-disabled [Accessed December 18, 2014]. Roa, F. F., 2007. 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