Social Responsibility in UAE - Research Paper Example

? Social Responsibility of the of the Table of Contents Introduction 3 Social responsibility of corporate organizations 3 CSR practices in UAE 4 Public policy support for CSR in UAE 6 Conclusion 6 References 8 Introduction Corporate Social Responsibility (CSR) refers to practice in which the profit oriented corporate organizations make certain activities to improve welfare levels of the society. In the modern world, CSR has received significant attention from policy makers, corporate decision makers and the general stakeholders of the society. CSR is now established as a set of principles by following which, companies would be able to take such actions, so as to increase welfare of the society. Organizations that follow CSR policies recognize their responsibility towards the society in which they operate. Although they operate with profit motives, their sole objective behind running the business is not maximizing profit. A company cannot run without the support of the community and it can only grow when it takes such steps that would improvise the status of the society as a whole. Every organization feels an obligation towards fulfilling the demands and well being of its customers, welfare of its employees, profit of shareholders and the interests of the whole community (Hassan & Harahap, 2010). Besides, the company also has a responsibility towards the environment. They have to make ecological considerations in all their operations. It is a big responsibility for socially responsible organizations to reduce their ecological footprints and make more environmentally friendly activities. Managers that develop their business policies by synchronizing their objectives with principles related to these aspects, finds success in making socially responsible moves. Social responsibility of corporate organizations Concern towards CSR is rising fast among the companies operating in the gulf countries. A number of ways have been devised to make the socially concerned organizations operate in socially responsible way. Research shows that organizations in UAE base their CSR activities on the four pillars strategic governance, human capital, shareholder capital and environment (Hancock, 2005). The companies dedicate a portion of their profit for the funding of art and culture in different countries, for providing academic scholarship to less advantaged students belonging to the grass root level in the society and for supporting any type of community-building initiative (Du, 2013). The theory of CSR links closely with the concept of Sustainable Development (Shahwan & Hassan, 2013). According to this concept, enterprises are supposed to make their decisions on the basis of short term financial factors as well as long term factors that have deep environmental consequences. It is strongly believed that while short term profits or dividends allow the company to occupy good market position in the short run, in the long run, companies can become successful by making holistic moves towards the development of the entire society in which it is operating (Hassan, 2009). For achieving this end, organizations have to look after the environmental cost of their activities. Four important arenas that companies should look after while making socially responsible action, besides presentation of environment are human rights, labor rights and anti corruption. CSR practices in UAE Organizations based in UAE are actively thinking about their CSR initiatives. These are aimed at a number of purposes. Some of the most important objectives of practicing CSR activities by the companies are building community relationships, enhancing living standards of the population of the country and also helping the people of the country defend themselves against natural calamities. Various companies in the Emirates take socially responsible actions in the form of “social marketing projects” (Flynn, 2012). Corporate managers in the country demonstrate high level of responsibility towards the society. Therefore, their organizations are encouraged to demonstrate awareness about the expectations and demands of the communities (Sayani & Miniaoui, 2013). Different industries in UAE are taking steps forward to promote better CSR activities. The firms that are most actively taking part in this issue belong to the renewable sector industry, the tourism and hospitality industry, the heavy metals and engineering industry and the information and telecommunication industry (Mezher, Tabbara & Al-Hosany, 2010). The renewable energy sector is making significant moves towards increasing availability of renewable sources of energy (Panda, 2012). This is a very decisive move towards making the process of development sustainable (TRA, n.d.). When a corporation involves in social practices, it needs to allocate certain amounts of resources for doing these activities. This is considered as an investment and not a cost to the company. This is because once the company acts for the preservation of the environment and uphold fair treatment of the employees, it improves brand image for the company. Therefore, it turns into financial benefits for the firm in the long run. CSR activities help in developing and strengthening relationships with customers and improving public relationship and networks with suppliers. In UAE, customers are more inclined towards purchasing the products of the company that has well established brand name. It leads to higher levels of customer retention. Socially responsible actions are made by UAE based firms with another intention. These activities involve new investments and new relationship building. Hence, it is a good opportunity to establish new business deals and make new business decisions. These companies undertake CSR activities in innovative ways to mark their difference from their competitors (Alserhan, 2013). They set different industry standards through their social responsibility and generate huge volume of positive publicity. Differentiation of the company from competitors acts as a huge motivation behind CSR activities by the companies. Public policy support for CSR in UAE Recent research shows that “the world’s largest carbon footprint per capita” belongs to UAE (Mezher, Tabbara & Al-Hosany, 2010). This is because the country uses huge volume of fossil fuel for its economic activities. In this context, both corporate organizations and the government work hand in hand to reduce environmental impact. Some of the most eminent organizations in UAE that make massive activities for fulfilling corporate responsibility are Dubai Aluminum Company Limited (Dubal) and Marriot Hotels. They have set targets towards carbon neutrality by investing in carbon efficient technology. The government of UAE always makes active involvement in protecting their environment and ensuring welfare of the citizens of the country (Alserhan, 2013). The politicians and members of the well to do sections of the society in the country donate large sums of money as well as other facilities, such as land, for the development of its people. Active public support further promotes the CSR activities within the country. Financial and advisory support by the government encourages the corporate organizations to make more social activities. It leads to congruency of attitudes of the managers towards their social responsibility with the motto of the government to promote CSR in the country. Conclusion CSR activities in the UAE are made by firms with the aim of environmental protection, customer retention and differentiation from competitors. In UAE there is very high percentage of emigrant workers or expatriates. Research shows that socially responsible actions benefit the customer and employees alike. It has been found that besides retaining customers; socially responsible corporate firms are more capable of retaining employees than other business firms. In UAE, workers are present from the Asian countries as well as the rest of the world. This creates a situation of diversity in cultural background, linguistics and social upbringing (Shahwan & Hassan, 2013). Apart from profit, factors that drive employee motivation and performance are working environment, relationship with coworkers and level of communication within the organization. Some organizations in the country demonstrate low levels of CSR practices. Thus, they fail to fulfill their social responsibilities and objectives. This indicates that much work is yet to be done to fill the gap in fulfilling social responsibilities by the corporate firms. References Alserhan, B. A. (2013). Branding employment related public policies: Evidence from a non-western context. Employee Relations, 35 (4), pp. 423 – 440. Du. (2013). What is CSR? Retrieved from http://www.du.ae/en/about/corporate-social-responsibility Flynn, S. (2012). Corporate social responsibility in the UAE. Retrieved from http://csrmiddleeast.org/profiles/blogs/corporate-social-responsibility-in-the-uae Hancock, J. (2005). Investing in corporate social responsibility: A guide to best practice, business planning & the UK’s leading companies. London: Kogan Page. Hassan, A. & Harahap, S. S. (2010). Exploring corporate social responsibility disclosure: The case of Islamic banks. International Journal of Islamic and Middle Eastern Finance and Management, 3 (3), 203 – 227. Hassan, M. K. (2009). UAE corporations-specific characteristics and level of risk disclosure. Managerial Auditing Journal, 24 (7), 668 – 687. Mezher, T., Tabbara, S. & Al-Hosany, N. (2010). An overview of CSR in the renewable energy sector: Examples from the Masdar Initiative in Abu Dhabi. Management of Environmental Quality: An International Journal, 21 (6), 744 – 760. Panda. (2012). Living planet report. Retrieved from http://wwf.panda.org/about_our_earth/all_publications/living_planet_report/ . Sayani, H. & Miniaoui, H. (2013). Determinants of bank selection in the United Arab Emirates. International Journal of Bank Marketing, 31 (3), 206 – 228. Shahwan, T. M. & Hassan, Y. M. (2013). Efficiency analysis of UAE banks using data envelopment analysis. Journal of Economic and Administrative Sciences, 29 (1), pp. 4 – 20. TRA. (n.d.). A view into the UAE’s future ICT scene. Retrieved from http://www.tra.gov.ae/download.php?filename=brochures/TRA%20Brochure%20En.pdf . Read More