Importance of Corporate Social Responsibility for Organizations - Research Paper Example

Corporate Social Responsibility AFFILIATION: Table of Contents Introduction 2 Importance of CSR for Organisations 2 Challenges of Corporate Social Responsibility 4 Conclusion 7 Introduction Corporate social responsibility (CSR) can be defined as the organisation’s responsibility towards the community when conducting its business operations in the region. The business activities of the organisation should not harm the community and social environment. In the current era of globalization, organisations are striving towards coming up with strategies that allows them to gain a strong competitive edge in the market. Corporate social responsibility is one of the most successful strategies that have allowed organisations to observe success in the long term. This paper discusses the importance of CSR strategy for the organisations and the challenges faced by organisations when they implement such a strategy. Importance of CSR for Organisations The corporate social responsibility strategy is important for the organisations as this strategy takes into consideration the acceptability of the organisation by the consumers of the particular region. This strategy has to take into consideration the corporate governance factors; this strategy ensures that the organisation is conducting its operations in a responsible ways and will be accountable for all its business activities that are impacting the environment (Brooks, Williams, and Thomas, 2004). Implementing a corporate social responsibility strategy in the organisation is a strategic issue. This is so because this strategy allows organisations to conduct their business by maintaining strong and cordial relationship with their stakeholders and the community (Hemingway and Maclagan, 2004). The customers are important for the success of the organisation, when customers have in mind that the organisation is a socially responsible organisation, the reputation of the organisation further improves and so does the customer base. This positive image proves to be useful for the organisation in the long term. If organisations do not consider the community and their business operations harm the community then there stands a high chance of business failure in that community. Customers may get the message that this particular organisation is not concerned with the welfare and wellbeing of the people (Levy, 2007). Any negative message transmitted to the consumers by any business activity will cause the organisation to face heavy consequences. Therefore, keeping in view the shareholders and the community is important for organisation’s success. The shareholders or the organisation, the valuable customers and the workforce of the organisation, all these elements have expectations with the business and they are highly concerned about how the business is conducting its operations (Responsibility, 2008). Some organisations start some communal activities by the profits they earn and some donate a share of their profits in charity. These donations and events cause the organisation to earn a title of being socially responsible. These expectations compel organisations to diligently make an effort in impacting the society in a positive way via the organisation’s production and manufacturing services (Halme, Roome, and Dobers, 2009). The results of the business activities should impact the environment in a positive way as well so that the shareholders and customers in general remain optimistic about the business activities. In addition, organisations need to design policies, rules and regulations for the workforce so that proper level of productivity and discipline is maintained in the firm. Organisation should have competitive recruitment and selection policies so that a competent and talented workforce can be hired for conducting the business operations successfully. A competent workforce is crucial for attaining the goals and objectives of the organisation in the required manner. It should be noted that no strategy is successful without the coordination and cooperation of the workforce. All these factors would contribute towards building a positive and reliable image of the organisation (McWilliams, Siegel, and Wright, 2006). Organisations that are categorised as a corporate socially responsible organisation have more chances of growing their business, due to their CSR activities; they have more business opportunities such as diversifying and expanding their business in new markets. When they are accepted in a particular business market, organisations can start expanding their business by opening new branches in other areas of the country. Challenges of Corporate Social Responsibility There are many challenges for organisations when they plan to implement corporate social responsibility strategy in their organisation. Challenges can be both internal for the organisation as external for the organisation. Internal challenges may include cooperation from employees and management to implement the strategy and external changes include government, rules and regulations of the country, and the community business culture (Brooks, Williams, and Thomas, 2004). The organisation needs to state their policies and responsibilities according to the requirements of the public sector firms and accordingly design the activities of supply chain for the firm. The implementation of corporate social responsibility requires a pragmatic approach by the organisation as regardless of the benefits it provides, it has its boundaries of control which cannot be trespassed. For example, CSR activities cannot compel the government in amending certain laws or impact the international standards for labour (Husted and Allen, 2001). It can be argued that at times, there is a possibility that the CSR measures are lacking in adoption of the right measures and hence this may impact the reputation of the organisation in a negative way (Ibeh and Davies, 2009). The consequences of this may lead to incurring of additional costs and the organisation may lose its competitive ability by a large extent. There have been many research studies conducted that depict the profitability and success level of the organisation due to business practices being reliable and responsible apart from being competitive. These firms do not focus only on the short term profits but rather cater to long term strategic planning as well. On the contrary, it can be argued that these research studies also depict the value of implementing CSR strategies and also reflect upon the success by organisation that implements such strategies (Maznevski, 2010). In promoting CSR activities, the government plays a vital role. An example of this can be that governments have conditions that are beneficial for the organisation, that allows governance standards to be established well and hence organisations are encouraged to participate in such activities (Meijer, 2005). The government does not compel the firms to have CSR policies but rather provides a favourable business climate so that organisations take part in such responsible activities. It is important for many organisations, especially those that are part of the OECD to maintain a good reputation amongst the social network so that they have a good stand (Lantos, 2001). If firms are not having a favourable reputation amongst the society, then this means their good will value is low and hence this can impact their global activities. One of the consequences can be that consumers may not buy their products as they may deem their business practices to be unfair (Joyner and Payne, 2002). The consumers are a vital element for businesses and they play a critical role in allowing the organization to be a sustainable firm. Consumer decisions reading products are based upon many other factors apart from price, globalization has allowed consumers to become educated in many areas of decision making. The purchase decisions of consumers are based upon price, as well as safety and quality issues of the product. The way it is manufactured and its position as a socially responsible organisation. The environmental impacts of the business operations affect the decisions of the consumers (Castelo and Rodrigues, 2006). Also the organisation needs to abide by all the labour laws and labour rights when they hire the workforce for the production of goods. The organisation’s management of business, their abiding by the corporate governance laws in the country and demonstrating a sound corporate social behaviour allows the organisation to achieve sustainable achievements in the long term as well (Pearce and Doh, 2005). Being a corporate social responsible organisation allows the business to recruit fresh talent and capital from the market and ensuring the business earns a good image and reputation (Sasse and Trahan, 2007). In the present changes of the world, one of the most crucial challenges is the implementation of being socially responsible in the community for the organisations (Halme, Roome, & Dobers, 2009). All global organisations are observed to implement corporate social responsibility strategies such as Procter and Gamble, McDonalds, Unilever and other such organisations. Unilever has increased its reputation in the field of maintaining corporate social responsibility by developing a sustainability living plan (Business 2 Community, 2011). Conclusion It can be viewed from the discussion that being a corporate social responsible organisation is important for attaining competitive advantage in the business environment. The strategies need to be implemented for the sound success of the organisation in the community where business operations are being conducted. When organisations are implementing CSR strategies it can develop a good reputation and image in the consumer market. The recruitment and selection of employees would allow the best talent to be hired in the firm. This would lead to successful execution of the strategies by the organisation. There are a lot of challenges for organisations when implementing the CSR activities. The most important one is the consumer knowledge regarding the business operations of the products. References Brooks, S., Williams, W. and Thomas, P., 2004. CSR and Strategic Management: The Prospects for Converging Discourses, The Inter-Disciplinary CSR Research Conference, 22-23 October, 2004. Business 2 Community, 2011. Unilever Raises the Bar for Corporate Social Responsibility. [online] Available at: http://www.business2community.com/trends-news/unilever-raises-the-bar-for-corporate-social-responsibility-023838 Castelo B., M., & Rodrigues, L. L., 2006. Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69(2), 111-132. Halme, M., Roome, N., & Dobers, P., 2009. 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