Social Reporting in Business - Case Study Example

Social Reporting in Business Report Word Count Affiliation: Introduction Social responsibility and social reporting are two fundamental concepts that influence organizational operations in the contemporary business environment. This paper explores the many different business practices that reflect the presence or absence of social responsibility and social reporting in two companies, namely: Coca-Cola1 and Tesco2. Corporate social responsibility (CSR) encompasses organizational practices that reflect enhanced societal and environmental welfare. These practices go beyond compliance with relevant laws, government requirements or regulations, and the set ethical standards of conducting business operations. Coca-Cola is a leading soft drinks’ multinational in the world. On its part, Tesco is an England-based grocery and general merchandise retailer. Coca-Cola’s CSR is driven by social needs in the drinks industry, while Tesco’s CSR targets sustainable business practices. Benefits of CSR CSR enhances business growth and development in diverse and dynamic ways. To start with, it provides businesses with the opportunity to be accountable to the society within which they operate. In this respect, CSR links business activities to the growth and development of the society. The essence of businesses is to provide goods and services at a cost. However, doing so should not be detrimental to the public. In other words, business enterprises, through CSR, take responsibility for the negative implications of their business operations. On the society side, CSR allows the public to enjoy beneficial business practices that are not necessarily enforced by law, government regulation, or codes of conduct in the business setting. What this means is that businesses become agents of promoting social welfare without necessarily being under the pressure of regulatory authorities. For example, Coca-Cola engages in vibrant charity and women empowerment programs across the globe. As the practice stands, legal provisions do not require the company to do so. The need to enhance women welfare and general social progress, however, drive the company to pursue this form of CSR. It is important to note that CSR practices come at a cost. Both the business and the stakeholders have to come to terms with the high costs or heavy investments made in CSR projects. Internal stakeholders such as employees, business owners, customers, suppliers, and contractors among others have to align their duties and responsibilities with the prospects of CSR3. On the same note, external stakeholders such as the public, lobby groups, communities, and the media among others have to be in a given form of relationship with the company in order to reap maximum benefits in that regard4. in this respect, the social responsibility of an organization is best captured through social accounting and subsequent reporting. Corporate Objectives Any business enterprise strives to achieve a given set of short-term and long-term goals and objectives. These goals and objectives define that enterprise’s corporate objectives. Corporate objectives denote the organization’s progressive growth and development. In light of corporate objectives, CSR acts as an aiding business practice. This is because organizations strive to win the trust and loyalty of the society in many different ways. While CSR works to the best interest of the society, it also enhances business performance and productivity. Taking Coca-Cola as an example, there are numerous players in the soft drinks industry. The company entry into non-explored African markets has enhanced the company’s corporate objectives through CSR, women empowerment and charity foundations. On its part, Tesco has been pursuing green business practices for the last several years. In so doing, competition from other leading retailers has always been a critical challenge. To address this challenge, the retailer engages the society within its supply chain with the aim of cutting corporate footprint. Even though Tesco is profit-driven, this corporate objective relies heavily on CSR as far as realizing the ultimate results is concerned. Based on these observations, CSR is a significant ingredient in the realization of corporate objectives. The only difference between organizations is the approach taken in linking CSR to corporate objectives. Acceptable Responsibilities Corporate responsibility primarily covers those social and/or environmental issues caused by an organization’s operations. For example, Coca-Cola pursues environmental responsibility based on the effects of production processes on the environment. On the same note, the company funds charitable programs in communities and societies where soft drinks are marketed. In this respect, the public is both the target consumer and beneficiary of corporate responsibility. On the other hand, Tesco engages in sustainable business practices with the view that green business practices are beneficial to the society and the environment at large. Based on this observation, the adoption of CSR is subject to the influence of the relationship between the companies, the society, and the environment. Social and environmental factors, therefore, constitute the key influencing factors that drive CSR in both Coca-Cola and Tesco. In order to communicate their corporate citizen behaviour to the public, both Coca-Cola and Tesco undertake social reporting and accountability. Measuring Level of Responsibility Social responsibility is subject to the influence of many different factors. At the very least, business enterprises must comply with relevant laws, rules, regulations, moral, and ethical standards that govern the environment in which they operate. For many businesses, however, CSR goes beyond these forms of compliance. The essence of CSR is to enhance societal growth and development, without necessarily being required to do so. Levels of responsibility vary from one business to another. For Tesco for example, environmental concerns constitute key measurements of the company’s level of social responsibility. In contrast, Coca-Cola targets members of the society within which the company markets its products. In this respect, social welfare, environmental issues, globalization, and business sustainability influence the extent to which both companies are socially responsible. Amid their different approaches to CSR, both companies keep the public informed as far as social responsibility and accountability is concerned. Social Reporting The communication of the effects caused by a company’s economic actions to the social and environmental settings denotes the practice of social reporting5. in other words, organizations take responsibility after acknowledging that they are accountable for their actions. Social reporting targets a section of the society or the society in general. The essence of social reporting is to have businesses or organizational players present what they do to mitigate social and environmental effects that result from their economic actions. In light of Coca-Cola and Tesco, the companies identify all aspects of accountability, take necessarily actions, and finally communicate their responsive actions to the society. In general, the society or part of the society constitutes the second primary stakeholder in social reporting after the reporting company. As earlier identified and subsequently listed, stakeholders within and outside the organizational environment are categorized into two: primary and secondary stakeholders. The value of social reporting to both businesses and stakeholders draws from the role of these stakeholders in the organizational environment. Primarily, social reporting provides for functional business-stakeholder engagements. It offers both businesses and stakeholders a better platform upon which to describe their performance. The requirement to measure social and environmental effects resulting from a company’s economic actions is best captured through social reporting. In other words, businesses cannot take responsibility without first acknowledging their accountability. When these organizations own up their actions, they then execute accountability and subsequently communicate the underlying performance through effective and efficient social accounting standards. Amid this progress, there are critical limitations to account for. Social and environmental issues are hardly defined in monetary terms. Without specific monetary value, businesses and stakeholders cannot specify the actual threshold of social responsibility. Most importantly, it is difficult to ascertain the impact of social accountability at an individual organizational level. In this respect, both businesses and stakeholders cannot tell whether social accountability works to the desired capacity or not. In light of the above values and limitations of social reporting, both Tesco and Coca-Cola exhibit different social accounting standards. Tesco reports its green strategies in business, but at the same time, the company cannot specify its overall impact on carbon footprint in the world. On its part, Coca-Cola reports on women empowerment, climate protection, and sustainable packaging6. However, the actual friendliness of the company’s products to the environment is not specified. In essence, social reporting plays an important role in tracking businesses’ corporate citizenship from time to time, but there is need to enhance efficiency and effectiveness. Government Influence Governmental influence on CSR practices is evident in the organizational setting. For businesses to operate within the relevant legal framework, they have to meet the set government requirements and/or regulations. The role of the government in CSR practices is to ensure that organizations do not exploit the public under the notion of social responsibility. Moreover, the government acts as an oversight authority that assesses and evaluates the implications of business activities on both the society and the environment. As much as businesses are socially accountable and responsible, for example, the government has to control environmental pollution and ensure social reporting is accurate and within non-exaggerated parameters. Conclusion In conclusion, social responsibility is the result of social accountability. Businesses like Coca-Cola and Tesco exhibit different approaches to social accountability and reporting, but the common denominator is that social and environmental welfare is critical to social growth and development. Through social reporting, businesses communicate with many different stakeholders on matters that affect their welfare in diverse and dynamic ways. On the same note, businesses manage their performance and keep track of corporate citizenship developments through social reporting. References Coca-Cola. 2013. http://www.thecoca-colacompany.com/citizenship/ (Accessed 2014-26-2) Idowu, S. O. & Filho, W. L., Global Practices of Corporate Social Responsibility, Springer, London, 2008. Tesco. 2013. http://cr2010.tescoplc.com/ (Accessed 2014-26-2) Read More