Social Reporting in Businesses - Coursework Example

Social Reporting in Businesses work Word Count Affiliation: The success of any given business is highly influenced by the environment within which it operates. This means that business enterprises have to take into account cultural, social, economic, political, and environmental factors as they pursue their business goals and objectives. At the height of their operations, businesses have increasingly engaged in corporate social responsibility. The need to consider societal implications relative to business operations has come up. Communities and societies have had to deal with differentiated social and environmental implications that result from business operations. Business activities are vital in the societal setting. They seek to meet market demand, satisfy consumers, and provide goods and services that meet the diverse and dynamic tastes and preferences exhibited by consumers. In so doing, corporate social responsibility has had to be factored in to account for the negative social and environmental effects realized as businesses undertake their day to day operations. The primary focus has been directed towards communities, societies, the environment, and employees among other critical social variables1. Trends in corporate social responsibility have further influenced the need for businesses to undertake social reporting. Social reporting measures, assesses, and evaluates business performance relative to various social indicators; community, society, environment, and employees among others2. Social reports entail business-related behaviour and response to issues and concerns raised by the identified indicators. This encompasses corporate social responsibility programs run by businesses as they strive to act in a socially responsible manner. Whether or not social reporting is essential for businesses is determined by the outcome of the whole process. Businesses are profit-driven, meaning that most often than not they pursue profit motives relative to return on the investments they make. In this regard, a business will essentially engage in social reporting if the outcome of the process is expected to or actually benefits the business. On the other hand, if social reporting stands a chance to adversely affect a business, then it is highly likely that the business will not consider social reporting as a beneficial operational strategy. The contemporary trend in corporate social responsibility shows that social reporting is now essential for businesses3. The essentiality of social reporting is informed by the actual activities and operations undertaken by a business enterprise. In order to assert the specific aspects that benefit businesses through social reporting, it is important to note the stakeholders interested in social reports. The society, environmentalists included, is the direct consumer of social reports. This is in line with the need to know what businesses do to counter the social and environmental effects caused by their economic operations. Business enterprises create an interaction ground for three vital parties, namely: investors, consumers, and employees4. These three parties can essentially determine the success or failure of a business. For this reason, treating each and every one of them with utmost respect and accountability raises businesses’ chances of success. Creativity is a key factor to consider when dealing with employees, consumers, and investors. The more unique a business becomes, the more it appeals to the three aforementioned parties. Employees, consumers, and investors always want to be informed about the prospects of a business. Supplying social reports complements the financial factor that investors consider when making their investment decisions. Investors always want to invest in businesses for which they have adequate information. Social reports encompass non-financial reports that further guide investor decision making process. In this respect, social reporting gets to attract investors for businesses by making it easy to make investment decisions and complementing the financial factor that almost all investors heavily rely on. The relationship between employees and customers/consumers is critical in the business setting. These are two fundamental parties that businesses can hardly do without. On one side, businesses seek to satisfy their customers by addressing their needs, tastes, and preferences. On the other hand, the same businesses rely on their employees to attend to the customers/consumers. This makes it critical to consider the relationship between employees and customers. Essentially, employees are partial customers to the businesses, and customers are partial employees in the same context5. Both employees and customers/consumers are part of the larger society, which experiences social and environmental effects caused by businesses’ economic actions. As a result, employees and customers become interested stakeholders as far as social reporting and social reports are concerned. Therefore, businesses that engage in social reporting are likely to attract more employees and customers/consumers, the two parties being a vital component of the larger society. Social reporting is heavily influenced by corporate social responsibility. This is because social reporting actually communicates social and environmental implications realized by the society as businesses conduct their operations in the short run and in the long run6. The society, therefore, is at the centre stage of social reporting. Essentially, undertaking social reporting encompasses social and environmental accountability of businesses. Here, goals and objectives relative to social reporting are set and subsequently pursued. Important to note is that areas that need improvement in the process can be noted and worked on as social reporting progresses. In order to understand the actual business areas that social reporting is essential for businesses, it is important to highlight an actual organizational or industrial example. Take the corporate social responsibilities undertaken by BP Company. The company operates in the energy industry alongside many other players. This company has had social and environmental issues relating to oil spills and environmental pollution. Essentially, BP makes annual social reports relative to its operations, responsibilities, and areas of accountability that touch on the society and the environment7. BP’s move is not embraced by every player in the global industry. For instance, many oil producing countries in the Middle East have few or no social responsibility programs. The society gets its fair share from the government’s actions designed to contain social and environmental effects realized from oil production. In other areas across the globe, corporate social responsibility has to be enforced by law because firms do not take a self-driven approach towards corporate social responsibility. The global oil industry, BP included, is made up of players that approach social responsibility from different points of view or perspectives. What works for one organization or country does not necessarily do so for another8. The idea is to identify areas that work best for each and every business enterprise. Businesses cannot pursue similar strategies within their independent operations. For this reason, social reporting cannot be practiced in a harmonized manner. However, each business stands a chance to identify its areas of improvement in the social reporting context. The persistent and increasing need for businesses to be socially responsible cannot be overlooked, meaning that there are diverse and dynamic benefits derived from social reporting. The business environment exhibits diverse and dynamic trends. In other words, changes are normal to occur and they are inevitable. These changes can be cultural, social, religious, economic, political, legal, or environmental in nature. Whenever they occur, businesses have to redesign their approach to the business environment and subsequently accustom themselves to the changes. Operational costs have to be adjusted accordingly, thereby allowing businesses to continuously pursue their set goals and objectives. This whole process can be enhanced through social reporting. Social reporting builds on the already existing financial factors, but goes a step further to communicate non-financial reports that appertain to businesses’ operations. This is essential for businesses because it allows business stakeholders to track, evaluate, and assess accountability and transparency in business operations relative to social and environmental issues. Moreover, corporate social responsibility can be measured through the effectiveness and efficiency of social reporting. Any business that seeks to foster good relations with the society has to account for its public relations strategy. One of the many ways through which businesses capture the attention of the society is undertaking social reporting. Members of the society are interested in social reporting because they expect businesses that prepare social reports to communicate how they affect and benefit the society. This provides a favourable ground upon which public relations are pursued. In other words, social reporting fosters business-society interaction and relation in diverse and dynamic ways. Daily business operations face criticisms that emanate from different stakeholders. Whilst it is hard for any given business to address all its criticisms, criticisms that are societal-based can be countered through social reporting9. Corporate social responsibility reassures the society that businesses are mindful to their social and environmental effects suffered or enjoyed by the society. In the process, societal-based criticisms are minimized while societal-based prospects are enhanced. How essential social reporting is depends on many and differentiated factors, which include but are not limited to: perceived benefits, business objectives and strategies, competitor factor, social perceptions and/or expectations, business culture, business values, and business commitment to corporate social responsibility10. Organizational and industrial approaches to social reporting and corporate social responsibility in general best describe the essentiality of social reporting for businesses. Perceived benefits drive almost every aspect of business operations. Businesses persistently pursue profit motives within and without the social context. The fashion industry, for example, is highly volatile. Its diversity and dynamism would require shifts in corporate social responsibility programs every time shift in fashion occurs. However, doing so is not only expensive, but also time wasting. For this reason, many players in the fashion industry align their creativity and innovation with the expectations and desires of the society. Doing so allows fashion firms to be dynamic while maintaining their already functional socially responsible operations. This realization does not come off social reporting. Social reporting aids corporate social responsibility, and the reverse is also true. Businesses pursue goals, objectives, and strategies that are highly likely to foster business continuity. This further takes the competitor factor into account. Where competitors are ignoring the dynamics of social reporting, a business can employ social reporting as an operational strategy that raises its short term and long term prospects. This is essentially seen in the energy sector. Firms in this sector have been shifting from energy sources that are environmentally harmful to green energy sources that best suit social and environmental concerns in today’s societies. As a result, players in this sector are now competing on green basis. In conclusion, perceptions and expectations of the society shape social reporting in a very unique manner. Businesses develop values and cultures that allow them to effectively and efficiently serve the society. In order to fully communicate these values and cultures, businesses have to communicate them to the society. Moreover, the society cannot associate with business values and cultures that it is not aware of. For this reason, businesses have factored in their values and cultures in social reporting. This unique practice strengthens business-society ties in the corporate social responsibility context. References Banerjee, S., Corporate Social Responsibility: The Good, the Bad and the Ugly, Edward Elgar Publishing, London, 2007. Belal, A. R., Corporate Social Responsibility Reporting in Developing Countries: The Case of Bangladesh, Ashgate Publishing, Ltd., London, 2012. Griffin, M., ‘The Corporate Social Performance and Corporate Financial Performance Debate’, Business and Society, 36, 2007, pp. 5–31. Hopkins, M., Corporate Social Responsibility and International Development: Is Business the Solution? Routledge, London, 2012. Mareș, R., The Dynamics of Corporate Social Responsibilities, Martinus Nijhoff Publishers, London, 2008. Solomon, J., Corporate Governance and Accountability, John Wiley & Sons, London, 2011. Weber, J., Business and Society: Environment and Responsibility, McGraw-Hill, London, 2005. Read More