Corporate Social Responsibility: What's the Status - Coursework Example

We are living in a society that since the 2nd half of the 20th century the business world has take the wealth of our entire society. Govermental institutions are not in control of our economy, the reality is that the private business sector has much more wealth than any particular government. Multinational Corporations such as WalMart, Coca-Cola Starbucks Café generated billions of dollars in revenue every year and employee thousands of people directly and indirectly. For example WalMart is the world’s largest global employer with one million employees (Wakeupwalmart, 2005). In order for the world to improve its overall standard the private sector has to do more, this is where social corporate responsibility comes into play. The puspose of this paper is discusss corporate social responsbility and its impact on society and its effectiveness as a business strategy. Corporate social responsibility is defined as a voluntary approach a business enterprise takes to meet or exceed stakeholder expectations by integrating social, ethical, and environmental concerns together with typical goals of achieving revenue, profit and complying with regulations and legal requirements (Bnet, 2008). Social responsibity takes into consideration all the stakeholders of the company from the inception of the supply chain to the final end customers. The major stakeholders groups of a corporation are its lenders, shareholders, business partners, the community, the environment, suppliers, other vendors, and the the customers (Kotler, 2002). Due to the lack of ethical consideration and ilicit activity of many companies in the past social responsibility has become a hot issue in the business world and the academia. Universities have the obligation of preparing professionals of all disciplines particularly business students in the value of social responsibility and how its virtues can be utililized to increase the value of firm. In the past companies such as Nike have an embarressment for the entire business by being involved in ilicit and unethical business activities in developing nation running sweatshops. At the beginning of the 21st century Enron is classic example of firm whose fraudelent behavior caused its employees their lifetime pension which were hard earn money. Two of the newest examples of companies that have not applied corporate responsibilty are JPMorgan and AIG. The United States and globe is in the middle of recession that can be consided the biggest one since the Great Depresion of 1929 which lasted nearly 10 years. The roots of the problem was the housing bubble and the irresponsible behavior of many bankers. AIG happen to be one of the campanies that beg the federal governmert for assistance last year at the end of President’s Bush 2nd four year term. Mr. Bush due to the public pressure to do something about the economy and the credit crush that was hurting individuals and business sign a bailout package of of three-quarters of trillion dollars. AIG happen to receive $85 billion of the hard earn money of American Taxpayers. Imagine the nerves of the executives of this company which just two weeks after receiving our money were caught partying in style at extremely expensive resort called St. Regis Monarch Beach Resort (Kells, 2008). JP Morgan is another corparte villain whose actions are beyond belief. In the aftermath of the Enron scandal the SEC found out that this accounting / financial firm were partly responbile for covering the Enron debacle. They loan money Enron and helped them desguise the money as operating activities; they received a $135 million fine from the Security and Exchange Commision. (Cheatingculture). If I were president of the SEC I would have taken all their licenses away and put them out of business permenatly. Despite some of the bad apples there are a lot of companies in the world doing good deeds and appying corporate social principles to benefit our society. Starbucks Café of one of these firms. Despite the fact that they do sell cofee drinks which a little expensive they are providing a premium product. The good thing about the way this company runs their operation is that they purchased was is fair trade coffee. Fair trade coffee is an arrangement between the farmers and the buyer (Starbucks), where the buyer pays the poor farmers doing business business with them twice the going rate for a pound of coffee. In a Fair Trade Coffee arrangement farmers receive a minimum of $1.26 per pound, the buyers provide the farmers with credit assistance to improve their infraestructure, and provide them with technology transfer and technical assistance free of charge (Globalexchange, 2008). Customer that realize that Starbucks is certified Fair Trade Coffee firm know that the premium price there are helping are indirectly helping poor people in developing that need the assistance from the developed world to raise their standard of living and be able to provide food, shelter and medicine to their families. Corporate Social Responsility can be utilized as business strategy to increase customer retention, improve relationship with suppliers and vendors, and most importantly provide assitance to those in need. Many pharmaceutical companies donate free medicine to poor nations such as the people living in Sub-Saharan Africa. Philatrophy is part of social responsility, but corporate social responsibilility is not limited to that aspect. Social responsibility in the business also implies applying manufacturing methods that reduce pollution to help our environment. It is not only complying with the minimum environental regulation, it is going in step above and finding ways to reduce and minimize wastage that is hurting the earth ecological system. Incorporating a practice of buying only recycle materials is an application of corporate social responsibility. In the United States President Obama is trying to promote the evolution of altertative energy in order to reduce the nation’s dependence on foreing oil. We have reached the point that the exploitation of our natural resource is putting in danger the well-being of our future grandchildren. The private sector as a whole has to raise in concius and stop think about the short-term, and begin focusing on business practices that will protect our environment so that in 100 years our planet will be suitable for the entire population to have a good stardard of living. The world has accoulated a tremendous amount of wealth and knowledge in the last 150 years since the start of the industrial revolution. The problem has been that humans have put their needs above the neccesities of our planet. The corporate world everywhere has exploited the natural resources and in many instances the body of humans which have been force to work for inhumane salaries and miserable working conditions. Social corporate responsibility is the solution to change our mistakes of the past. Govermental institution have to do more to regulate and audit large companies so that the abuse will not continue anymore. The young professionals that will lead the multinational corporation are the ones are going to be making the decision in the future. The academic community has to place greater emphasis in teaching ethics at the undergraduate level. This could be done by including in all curriculums a mandatory requirement of 6 to 12 credits in professional ethics. Life is never ending challenge in which as humans have to grow and become better people. The corporate has the financial resources to provide a lot more assistance. One of best things that has happen in the first decade of the 21st century is that corporate villains such as Enron, JP Morgan and AIG have been uncovered. The world is tired of greedy corporate behavior and the rest of the industry now knows that people are no longer going to support companies that do not respect its customers, stakeholders groups and our environment. References Bnet.com (2009). Corporate Social Responsibility. Retrieved March 30, 2009 from http://dictionary.bnet.com/definition/Corporate+Social+Responsibility.html Cheatingcultuure.com. J.P. Morgan Chase. Retrieved March 29, 2009 from http://www.cheatingculture.com/jpmorganchase.htm Globalexchange.org (2007). Fair Trade Coffee. Retrieved March 29, 2009 from http://dictionary.bnet.com/definition/Corporate+Social+Responsibility.html Kells, T. (2008). AIG after bailout scandal, executives party in California. Now Public. Retrieved March 29, 2009 from http://www.nowpublic.com/tech-biz/aig-after-bailout-scandal-executives-party-california Kotler, P. (2002). Marketing Management (11th ed.) New Jersey: Prentice Hall. Read More