Corporate Social Responsibility - Assignment Example

? Corporate Social Responsibility Introduction Corporate social responsibility has been used globally inrelation to specific situations. One common definition for CSR is that it is a concept that entails companies integrating both social and environmental concerns in their business operations, over and above, interaction with other stake holders on a voluntary basis.1 Social responsibility means environment, relations with stakeholders and investing more in human capital. Thus, CSR is simply amalgamating environmental and social concerns into business policy and procedures. Potential benefits of CSR relative to the costs for businesses and stakeholders Apparently, CSR is an ongoing responsibility held by businesses to ethically behave and economically develop while improving the quality of life of their employees and their families, over and above, that of the local community and society at large. Scholars argue that companies must be prepared to merge both the business and society through the principle of shared value. Shared value incorporates economic value that creates value for society through addressing needs and challenges.2 For instance, the Coca-Cola Company participated in a Corporate Social responsibility by sponsoring World Cup, 2010 in South Africa. In essence, the potential benefits associated to CSR include human response, risk management, brand differentiation, operating licence, and diverting attention. In human resources aspect, CSR acts as an aid to retention and recruitment especially in relation to a competitive market. Moreover, managing of risks is crucial as one of the important corporate strategies that are achievable through building a culture of doing the right thing within a corporation. Besides, the competitive market requires companies to have a unique factor that differentiates them from other brands that are in the market, thus separating them from the competition in the minds of customers. Consequently, companies tend to take substantial voluntary steps of convincing the government about their participation in social responsibility such as health and safety and environment. Never the less, companies may involve themselves in high profile CSR programs so as to divert the minds of the customers from their perceived negative impacts. Of importance to note is that CSR has cost of aiming to satisfy the customers both in product quality and ethically sourced a process that requires additional costs. In essence, companies use extra cost in creating brand loyalty, which assist in increasing revenue that is meant to attract customers. Additionally, companies have a cost of corporate social responsibility which is the capital investment. Capital investment is taken to handle a different kind of investment that a specific company prefers to take into account and find out if the investment is worthwhile.3 The importance of CSR relative to other corporate objectives Corporate objectives are goals that are normally laid down by the board of directors putting more influence on the critical factors that are necessary for company to excel in the market. Once companies are formed, the people in charge understand that social responsibilities in respect to the society must be accomplished even though it is not in the expected set out. This is because companies have different issues that they work on. For instance, a particular company may have an excellent customer but have the worst record of employment, so as to reduce the cost of the company. One crucial responsibility that companies should pay attention to is legislation. Essentially, some areas of corporate social responsibility are covered by legislation and regulation, which should be compiled by every company according to the law. Besides, public companies are expected to give reports on their environmental impacts in their own reports that are later combined to form an annual report and accounts. Consequently, companies have various laws they must follow depending on the type of firms that they are. For instance, the BP Company is likely to focus on legislation that entails the environment, Environment Acts 1990 and 1995. These two acts assist in the improvement and control of pollution, over and above, the clearance of contaminated sites that are owned by the firm.4 In light of this, positive impacts such as production that is environmental friendly and one that motivates the employees to feel that they are making a contribution to society. Never the less, the corporate social responsibility in this case denotes a depressing force on the profit margins of the company because new equipments are required to perform that task. Moreover, BP could also have a health and safety acts. In this act, the workplace ought to maintain a high standard of safety, a situation that should be inspected by a union representative. Thus, employees are happy and motivated especially when there are working at the firm. This kind of arrangement is also costly due to putting up the safety measures that are required although it is worth it. Apparently, stake holders have a direct or indirect stake in organizations or companies, even though all stake holders are not equal as some are more powerful than others. Power interest matrix is used by most organizations to analysis various stake holders that are involved in the business. Through this matrix, companies are able to identify main stakeholders in their business, a situation that allows them to assess their needs and wants individually. Due to the significant power held by stakeholders, companies must ensure satisfaction at all times in terms of business deals. Needles to mention, that the community plays a role in Corporate Social Responsibility, although could be regarded as that of low power and a low level of interest. In regard to power interest matrix, the community has minimal effort in the business. Thus, they do not have a significant impact on making decision of a company. However, once the community is unsatisfied with what companies do they have the right to protest for correction of procedures.5 Influence determining which Responsibilities are accepted by a business It is worth noting that companies involve themselves in aspects of Corporate Social Responsibility that are enforced by law and regulation as all companies are expected to comply to the law. Through this, companies are socially responsible in terms of working conditions, health and safety environment, environmental pollution among others. However, in areas where the law is not strict, some companies tend to be reluctant in participating in corporate social responsibility. In the recent past, the company law was reviewed to emphasize on giving report that concerns the environmental review especially in the usual business review. This ensures that the companies accept greater responsibility in handling the Corporate Social Responsibility. An influence is mostly considered by various stakeholder groups which have different levels of power. Customers have greater power in manipulating the impact of sales in a firm. For instance, customers could withhold purchases in a firm, a situation that leads to poor profit margin in the concerned companies. One particular company that relies on the purchase of the customers and their power to spread the word of mouth to others is the D&G Company. Factors Determining the Extent to which a Business is Socially Responsible There are numerous factors that determine the extent of social responsibility that a company has with regard to Corporate Social Responsibility. First, it is important to note the nature of business ownership in that social enterprise tends to take more interest in CSR than it would other companies especially in relation to profit, planet and people. Second, the location of the business or company heavily influences the level of corporate social responsibility. For instance, firms that are located in Northern Europe are said to have a tradition of greater adoption to CSR that other regions. Additionally, if companies have a corporate culture and management style that is known to have a direct influence on CSR. Besides, companies with younger management tend to appreciate social responsibility to improve the image level of their companies, over and above, interdependence between the company and society. Apparently, the strength and influence of stakeholders especially the role of the media, non-governmental organisation and customers increasingly important. In fact, the higher the potential risks and costs, the higher the extent of corporate social responsibility.6 The Limitations and Value of Businesses and Stakeholders of Social Reporting Social reporting is a communication process that incorporates social and environmental effects of organisations economic performance to specific groups within the society. Social reporting assists a company by holding itself responsible for the damages done on the environment and putting a value on the impacts they are causing by producing products. Thus, the image of stakeholders is terms of responsibility and the reputation of companies are improved. Through social reporting, stakeholders and share holders are able to make knowledgeable decision with consideration to the company as a public view and that of the media. Hence, both the stakeholders and shareholders are capable of making a decision on whether they can involve the companies they are attached to or not. Social reporting also entails attracting and motivating employees to retain them. Simply, retaining employees ensure that there is lower labour turnover for the company, as well as, increased productivity. However, there are limitations that are brought about by social report. To begin with, social reporting gives information that is proven to various companies that incorporate environment and employee among other statistics, although the information is not credible enough to make decisions that are most needed between companies. This is because the statistics found in social report are not credible. Additionally, data provided by social report is not easily understood by the share holders and stakeholders especially on the term that are used, making it difficult to operate.7 Government Influence The influence of government on Corporate Social Responsibility by is crucial in ensuring that companies have the mandate of appreciating back to the community and society. In essence, the government ensures that rules and regulation are put in place put pushing companies into taking the responsibility of the environment in which they work in by putting in place Environmental Act. Besides, the government had compelled the companies to pay taxes over and above registration in regard taking responsibility and having a permit to create companies in various parts of their specific countries. Conclusion CSR has been used globally in relation to specific situations. One common definition for CSR is that it is a concept that entails companies integrating both social and environmental concerns in their business operations, over and above, interaction with other stake holders on a voluntary basis. It is worth noting that, Corporate Social Responsibility is an ongoing responsibility held by businesses to ethically behave and economically develop while improving the quality of life of their employees and their families, over and above, that of the local community and the society at large. Additionally, companies involve themselves in aspects of Corporate Social Responsibility that are enforced by law and regulation as all companies are expected to comply with the law. There are various factors that verify the level of social responsibility that a company has with regard to Corporate Social Responsibility. Social report plays a part in value and limitation to business and stakeholders. The influence of government on Corporate Social Responsibility by is crucial in ensuring that companies have the role of taking responsibility to the community and society. Bibliography; Bueble, E., 2009. Corporate Social Responsibility: CSR Communication as an Instrument to Consumer-Relationship Marketing. Mu?nchen GRIN Verlag GmbH. Read More