Corporate Social Responsibility and Product Success - Coursework Example

CORPORATE SOCIAL RESPONSIBILITY AND PRODUCT SUCCESS By According to Abdolvand and Charsetad , corporate social responsibility refers to the continuous commitment by a company in a given area to initiate activities that will ethically impact the progress of the people in the same area. The activities may consider the aspect of contributing to economic development, improvement of the lives of the people in the region, hiring workforce from the people as well as directly involving in the community based activities through sponsorships and promotions. The level of involvement, according to Ararat & Göcenoğlu (2010) is sometimes determined by the types of products that the companies produce. All products have their characteristic nature. Consider the 2010 case where BP Company had a major fault at its operations leading to extreme levels of crude oil spilling in the Gulf of Mexico in the USA. The results were disastrous. BP Company produces oil which is inherently dangerous to the environment. The company was considered to have acted in a manner that was not socially responsible in spite of dealing with a product that is very volatile and dangerous to the environment. Moreover, consider another company like Coca-Cola. The Coca-Cola Company has always been part of the community in many places that it operates. For instance, it has initiated several water projects in the African continent as part of giving back to the community (Abdolvand & Charsetad, 2013, p. 90). In the Americas, it has been known to initiate several programmes aimed at making sure that health awareness programmes are initiated and supported. In the state of Alabama in the USA, the company has been known to seek bids supporting the summer activities for the youth with the major aim of promoting sporting activities. Therefore, the company has undoubtedly the strongest CSR activities in the whole world. Wal-Mart is another company that has a very strong and renowned CSR contribution to the immediate environment. According to Crane, Matten, & Spence (2013), one of the greatest activities that the company carries out is the renewable energy agenda that it has and its ability to directly employ local people for the local business. Moreover, the company does local food sourcing which an active role is played by the company at local level. In essence, its three categories of strategic objectives that involve the local people are important in having the company declared as one of the greatest CSR centres in the world. In all the three examples in this case, there is a strong link between the way a company operates and the way it expects its products to be consumed in the marker. However, some of these companies do not directly expect their products to be consumed based on their market levels of CSR. For instance, consider BP Company. It is generally considered that the people that purchase their oil from the company will not be always concerned with the impacts of the company to the environment. This is because they are directly purchasing product that will harm the environment (Ararat & Göcenoğlu, 2010, p. 98). It is the nature of the products to have externalities that are negative. Such a trend will automatically have a limitation on the CSR activities of the company in the environment. It is considered that the customers will still purchase its products even if there are CSR activities or not. The same will not be automatically possible for Wal-Mart that must get directly involved with the customers at their levels as a way of attracting their attention to the company. If Wal-Mart fails to carry out CSR activities, then Tesco will. In this case, there is a direct relationship between the presence of the company in the market, its activities and the way the customers will respond to the same. Apparently, Crane, Matten, & Spence (2013), noted that Coca-Cola has the same fate as Wal-Mart based on the products that they deal in. There are several corporate objectives that a company can focus on to win the market and these are; Loyalty to the customers Leadership in the market Commitment of the employees Global expansion and leadership. Klein (2012) determined that most of these goals are endowed on the development of the company as compared to the inclusion of the community. There are general actions that a company is always supposed to underatake as legislated by the environmental bodies (Crane, Matten, & Spence, 2013, p. 612). These link the production process and the effects to the immediate environment. Companies are therefore forced in accepting greater responsibilities due to these legislations. For instance, a company like BP did not have a direct CSR connection but obeyed the respective environmental acts of 1990 and 1995. To these, the company controls its environmental pollution. This is a corporate responsibility that is not directly linked to the communities in its operation areas benefitting. Such laws invoke high costs to the companies and do not add any form of connection to the community. Consider the case of BP Company experiencing the oil spill. Without connection to the immediate community, there were widespread protests against the company from community environmental groups (ESRT, 2013, p. 97). The company had to pay large sums of money to shield its dignity and continue its operations. The case is not the same when the company considers that it has to take to account CSR activities. In the case the company considered to have gone beyond the environmental acts and considered the plight of the immediate communities, and then there would have been less action against the company. According to Ramasamy & Yeung (2009), companies in such situations are not likely to quickly resolve their downfall. The community is considered a base upon which successful business runs. The case of BP saw the company being fined $34 billion without the support of the local community. Moreover, other companies like Coca-Cola and Wal-Mart directly rely on CSR as a basis for their operations. Although each company has its operational corporate objectives, the same cannot determine its ability to sustain a market favorably. Direct involvement with the communities has made them win over several markets and make their presence known. There are factors that determine which activities that are considered responsible in a given market. The first is the culture of the people (Klein, 2012, p. 98). Culture is the way of the people in a certain area. There are communities that practice fishing. Companies operating in such areas have an obligation of taking care of the water resources which is the basic component of the economic stability of that community. When BP destroyed the water systems in the Gulf of Mexico, there was a strong negation to the natural fishing systems in the area. The aborigines of Australia have a natural setting in which they live. Therefore, logging companies in these areas are supposed to remain friendly to the natural life through activities that will upgrade the systems to better ones. In this case, companies have drastically used the aspect of social reporting to turn the tides against some allegations. Coca-Cola for instance is a company that runs a website on social reporting. All the CSR activities are recorded in this section so that the whole world can view the level of involvement with the external corporate world. This has helped its customers to review its activities in the areas in which it operates. Moreover, the company carries out a collection of different activities in different areas all over the world. These activities are not uniform and they define the corporate requirements of the residents of such places (Ramasamy & Yeung, 2009, p. 87). The choice of the CSR activity is dependent on the need requirements of the different places and the natural ecosystem. In Alabama, Coca-Cola carries out health awareness programmes through sports. In Africa, the company carries out water conservation and preservation activities. Therefore, the social responsible and acceptable method depends on the type of products that a company deals in and the expectations of the community. Social reporting is an outward method of outlining that there is a strong link between the company and all the areas in which it operates. The value of the limitations to social reporting on stakeholders and the company is that the companies are allowed to portray the right message to the public. This is also a situation that brings in the government and its legislative machinery (Tian, Wang, & Yang, 2011, p. 76). The governments must therefore influence the CSR activities to the level that is limited to the laws. There are companies that make use of the CSR activities to gain undue advantage over others in the market. The governments to this cause have a reason to involve itself so that effective competition is maintained in the market. Companies that compete would always want to outdo each other through false means which does not encourage creative competition (Wang & Juslin, 2011, p. 43). In conclusion, the products that companies sell have a strong bearing on the successful operations of the companies socially. There are some products that would lead to the companies acting more socially than others. Some companies are market monopolists and they have little precision for CSR yet their products still sell. This essay has determined through effective references that successful CSR has a direct relationship with the products sold. References Abdolvand, M., & Charsetad, P. 2013. Corporate Social Responsibility and Brand Equity in Industrial Marketing. International Journal of Academic Research in Business and Social Sciences, 3(9), 21. Ararat, M., & Göcenoğlu, C. 2010. Drivers for Sustainable Corporate Responsibility, Case of Turkey. Istanbul: Director of Corporate Governance Forum of Turkey. Crane, A., Matten, D., & Spence, L. J. 2013. Corporate Social Responsibility: Readings and Cases in a Global Context. London: Routledge. ESRT, t. E. 2013. Vietnam Tourism Marketing Strategy To 2020 & Action Plan: 2013-2015. Ha Noi, Vietnam: Environmentally and Socially Responsible Tourism Capacity Development Programme (ESRT). Klein, P. 2012, 9 12th. The Impact of Values and Culture on CSR. The Forbes Magazine, p. 11. Ramasamy, B., & Yeung, M. 2009. Chinese consumers perception of corporate social responsibility (CSR). Journal of Business Ethics, 88(1), 106. Tian, Z., Wang, R., & Yang, W. 2011. Consumer responses to corporate social responsibility (CSR) in China. Journal of Business Ethics, 101(2), 100. Wang, L., & Juslin, H. 2011. The effects of value on the perception of Corporate Social Responsibility implementation: A study on Chinese youth. Journal of CSR and Environmental Management, 18(4), 246-264. Read More