Corporate Social Responsibility - Essay Example

College CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate social responsibility is defined as the good will efforts that businesses engage in that are different from their main objectives. These efforts are considered as social work and responsibility to helping people or rather giving back to the society. Therefore, CSR shifts focus from the economic and legal responsibilities of a business to social influences. This means that the businesses use their resources, both human and capital for a good course that the society actually needs. This strategy began in the 1960’s following arguments that there are more roles of a business other than making profits. Business services or products that the society purchases do not necessarily shape its success because the social responsibility of the business is part of what makes business work and remain stable. CSR has worked for many years and continues to remain relevant for both the society and the business organizations. Although there are other ways through which an organization can get attention and actually make profits through consumers, CSR remains to stand out because of the popularity it has continued to gain over the years. The corporate world is all about money but for a constant flow of the profits, having the society on your side is very important. Once a business has the society, it is easy for it to work with the government as well. Nonprofit projects are what CSR is all about. (HAERENS, 2014) Indeed, there have been debates about the relevance of CSR in the modern world because most corporations are actually issuing this strategy just to get numbers of consumers on their side. Other strategies that lure clients have come up especially with the advances made in technology annually. Therefore, a company may fail to incorporate CSR in their annual calendar due to the masses of consumers that are loyal to it. Some companies do not see the need; rather they view CSR as a waste of time and resources. The level of competition in the current corporate world is so stiff that CSR becomes either and advantage or a disadvantage to the businesses. A few businesses are known for their philanthropic nature in helping the communities around them. For instance we have Tom’s Shoes a company that produces and retails shoes. This company has over the years dedicated and committed to giving a free pair of shoe per every sale made. The free pair is given to a child who needs it and not just to any random child. This is a form of CSR that the company has focused on and hence its popularity in giving back to the society. CSR mainly is done to benefit those in need and Tom’s Shoes strike as a good example. The child given the free pair benefits and the society works hard to shop at Tom’s Shoes so as to get more free pairs and minimize costs of buying all the poor children shoes. This example benefits both the company and the society but the answer to whether the shoe company makes profits is a definite yes. A company may sell one shoe at a pricy cost that could cover two pairs. The idea is to show the society that you want to engage in helping them. (SCHRECK, 2009). Other examples of businesses that effectively use CSR include Starbucks. The coffee guidelines and practices were adjusted by the management to ensure that the production of coffee into its finished product is sustainable at all levels including the social sector. For Starbucks CAFÉ, it is a product bought by consumers whose actually get returns at the social level during its production. Sustainable use of resources, both human and others is a form of CSR that companies are adapting to. For instance, instead of hiring workers who are not citizens, the company hires citizens preferable those who need the job during coffee production. This benefits the company as they still get the work done and maintain a good reputation within the society. Ben and Jerry’s is a dairy producing company that is also on the CSR strategy. The company during the production of its products has resorted to using ingredients from the fair trades only. These ingredients are produced by their end consumers hence it’s a win-win situation for both the ingredient providers and for the dairy company. Through those ingredients, Ben and Jerry’s have built a dairy farm in their home area, a possible way of giving back to their society. By promoting local resource providers, CSR is promoted. In any case, Ben and Jerry’s could use imported ingredients but they choose to promote their own people. This is a constant CSR move that will benefit the dairy farm through resources and market for their products. CSR sure has its benefits to a company and the benefits are probably the reasons that also influence the course and how often a business will engage in CSR. One benefit is defending the company’s reputation. A business that does one good course for the community must continue doing the same or much better projects to ensure their good will is not tarnished. For any business, small or large, keeping a good name is important for client loyalty. The consumers are the major shareholders of any business in the sense that they are the people who bring in profits by purchasing the goods or services offered. Therefore, maintaining a good reputation with them is very crucial for the success of any business. Other benefits include justification of the profits over the costs incurred by the business. A company is required by the government and other legal entities to account for every amount of money they spend. CSR becomes on the ways through which a business can use to account for their costs. When the taxing is heavy, the costs incurred through CSR projects can be used to reduce taxation. Taxes are made on the basis of profits hence when a business adjusts their benefits by incurring their profits in a CSR course, then taxation levels down. Another benefit and factor that an influence CSR is the advantage a company gains to fight competition. (IDOWU, 2013) Popularity amongst businesses in the same field is gained by the consumers. If a company engages vigorously in CSR missions, then consumers may shift from one business to the one offering social philanthropic activities. Working with consumers will also give the business a chance to know firsthand what more they want from the products and services and thereafter make the necessary adjustments. This is important in relation to corporate objectives. As much as CSR is beneficial, there are several disadvantages that arise from it. Resources are widely used that could be employed in other profitable projects. Money is required to fund the project and in some cases free services and products and given for free. For instance with companies that deal with consumables, their CSR projects mostly involve giving their products for free to their consumers. These are resources wasted since they fail to bring in capital. Another disadvantage is the time wasted in CSR especially with businesses that engage annually or biannually. The staff has to go on several days without working on the main objectives of the business in order to please their consumers. Mostly, these projects go for about 7 days. A week out of business can be very damaging. There is also the risk of losing investors and potential investors during CSR missions. (PAETZOLD, 2010). During the projects, for instance, cleaning the environment, anything negative can happen between the staff and the public that could raise questions on the ethical responsibility of the staff. The staff to some extent is misused during these projects and when they fail to do according to the public, their good will can be jeopardized. These activities thus require patience and tolerance with the public, an aspect raised during most arguments against CSR. Business men and women are not trained towards solving social problems thus anything can happen during the field work that could actually put the company in worse place among its competitors. The influences that determine whether a business will engage in CSR or not include government policy while in some, the financial status of the business greatly acts as a factor. Some CSR projects consume a lot of capital that would lead the shareholders losing a great deal of their money. When this is possible, then CSR is not done. Trending issues influence CSR in a great way for example environmental hazards or natural disasters are things that could mandate businesses to come in and help the affected people. It is both ethical and philanthropic to follow on the trending issues affecting people socially. The government’s role in influencing CSR is to place rules and policies that mandate every business registered to work towards benefiting the community. These policies must be followed by all corporations. In conclusion, we establish that a company’s goods or services may influence its success but not entirely. The social responsibility that any corporate entity attempts to engage in plays a huge role in making profits as well as defending the reputation of the business. The government also comes in in ensuring there are legal laws to make certain that corporates involve CSR related work in their calendars and actually report on it. The main goal is to satisfy economic, political and social aspects of the society through businesses. Therefore, the success of a business is not solely dependent on its goods and services. BIBLIOGRAPHY HAERENS, M., & ZOTT, L. M. (2014). Corporate social responsibility. IDOWU, S. O., CAPALDI, N., ZU, L., & DAS GUPTA, A. (2013). Encyclopedia of corporate social responsibility. Berlin, Springer. http://dx.doi.org/10.1007/978-3-642-28036-8. PAETZOLD, K. (2010). Corporate social responsibility (CSR) an international marketing approach. Hamburg, Diplomica-Verlag. http://www.ECU.eblib.com.au/patron/FullRecord.aspx?p=595333. SCHRECK, P. (2009). The business case for corporate social responsibility understanding and measuring economic impacts of corporate social responsibility. Heidelberg, Physica-Verlag. http://public.eblib.com/choice/publicfullrecord.aspx?p=418231. Read More