Corporate Social Responsibility - Coursework Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : Corporate Social Responsibility Tutor : xxxxxxxxxxx @2010 Table of Contents Table of Contents 2 Corporate Social Responsibility 2 Introduction 2 Negative injunctions and affirmative duties 3 Simon et al work on Corporate Social Responsibility 4 Broad maximal view 4 Broad economic view 6 Conclusion 11 Bibliography 12 Corporate Social Responsibility Introduction Business entities are supposed to choose a moral behaviour which enables to operate in an ethical role. The corporate social responsibility policy functions as an inbuilt, self regulating mechanism where a business is supposed to observe and ensure its support to ethical standards, international norms and law. The business must take responsibility for the effects of its actions on the consumers, employees, environment, stakeholders, communities and every member of the globe (Andrew, 2010). Businesses which focus on corporate social responsibility proactively endorse public interest through promoting community growth and development and willingly eradicating activities that causes harm to the public globe, in spite of legality. CSR involves incorporation of public interests into decision making by a corporation and prevention of harm to people and environment and at the same time ensuring profit maximization. The government lays down laws and policies that ensure corporations behave in an ethical manner. Negative injunctions and affirmative duties Corporate social responsibility is viewed as being more concerned with the society and this detract the main business goal of making profit. The negative injunction to prevent and correct social harm gears its way through every morality (Burchell, 2008). When a business causes harm to other people it is supposed to compensate them. For instance, the concept that business enterprises should apply special effort to employ and train employees who are able to act responsibly is viewed as a fulfilment of affirmative duty on the portion of the business to meet the problems of the society. According to Michael, (2009), it may be interpreted as the correction of social injury caused by the business in the past years. There is a probability that every business activity is socially harmful and therefore every social pursuit by any business is corrective responses other than affirmative actions. For establishment of moral minimum, the business must carry out activities that do not harm the people and environment. Phillip (2009) notes that if the business causes harm, it is supposed to make compensations and rectify the harmful activities so that they do not cause harm in future. A business should come up with means of resolving the problem it has caused. Simon et al work on Corporate Social Responsibility Broad maximal view Andrew (2010) observes that corporate social responsibility is not an issue of just doing the correct thing but it means behaving responsibly and doing business activities with suppliers who behave responsibly. Firms favour suppliers who follow responsibility policies because they see this as having a positive effect on how their businesses are perceived by their customers. William (2010) says that manufacture and sale of environmentally products goods builds a good reputation of the manufacturing company. Reduction of emissions and wastes to the environment helps in prevention of environmental pollution but this means that companies must increase their waste disposal costs. A company that has good reputation find it easier in recruiting employees and the employees are likely to work for a long time which reduces costs and interruption of retraining and recruitment. Having an understanding on the broad impact of a particular business may help in developing new goods and services. Andrew (2010) also notes that CSR is about deliverance of improved shareholder value, and provision of enhanced services and goods to the customers. Businesses can employ corporate sustainability to generate direct gains .For instance, operational efficiencies can be accomplished by reducing materials and energy as output production factors. Materials can be recycled and wastes reduced (Phillip, 2009). These actions of eco-efficiency can generate concurrent economic and environmental benefits for the firm and thus lead to a greater financial performance together with a more effective profitability. According to George (2010) operational efficiencies may be attained through streamlining the way information is made available to the investment society and other stakeholders who demand improved transparency from the business. Management of liabilities and potential risks more efficiently through CSR perspectives and tools can lead to reduction in costs. George (2010) also argues that the use of corporate responsibility and sustainability approaches in the firms decision making leads to costs reduction and recognition of new market opportunities like when fresh manufacturing procedures are developed that may be extended to other regions, markets, and plants. Nancy (2009) observes that there has been a view that labour leaders and corporate officials have a corporate social responsibility that goes above serving the stakeholders and shareholders interests. In a free economy, there is only one social responsibility of the business which is to use the resources of the business and engage in activities that will enable it to increase its profits as long as it stays within the rules of the business rules. This means that the business is free to stay in the market and engage in free and open competition without any dishonesty. William (2010) notes that corporate social responsibility limits the maximization of profits by corporations because it concentrates more on social interests other than the interests of the business. The legal system dictates on the governance and decision making processes of corporate directors and this means decisions are affected by factors outside the business Legal constraints on decision making by businesses is varied over time and among countries, and business directors advocate for different policy initiatives which will enable them to make decisions without much regulation from the legal system. For instance, countries like Japan and United States confronts the divisive issue of whether the corporate directors have obligations to corporate stakeholders and employees rather than the society William (2010) observes corporate social responsibility limits business fairness, equity and independence. The view that business directors owe a duty to the society rather than its employees and business interests may be harmful and dangerous and may be valueless because it interferes with business goals and objectives. This is because firms with poor management dismiss their directors who are not able to supervise the firm in accordance with the social responsibility ethics. The law requires businesses to carry out its activities in a socially responsible manner and this duty trumps their business interests. Many corporations channel their profits into training of desirable employees who are able to work in accordance to the social ethics (William, 2010). Broad economic view According to William (2010), the basic economic responsibility of a firm is to maximize profits and this conveys its fiduciary role to safeguard the interests of its stakeholders and shareholders. The responsibility of a business emphasizes on the significance of maximizing the value of the firm. The primary responsibility of a business firm is to maximize the revenue of its shareholders and it must conquer environmental obstacles in order to accomplish its business interests. This may involve having employees work for long others than recommended, maintaining high prices for goods and services and sidelining the significance of environmental safety (Michael, 2009). If business firms continue with this trend putting into consideration the legal implications, the future success of economy will be justified by firms who are propelling their economy by their profits. Free and open competition without fraud is the key responsibility of firms (Paul, 2010).The economic responsibilities of a firm designate the maximization values of the firm. Economically, corporations are needed to maximize the earnings of their shareholders. This is achieved through production of services and goods that are in demand in the market. Nancy (2009) argues that legal responsibilities are defined by authorities and corporations are needed to abide to these laws strictly and in a disciplined way which limits profit maximization by the firms Maximization of corporations values is the core business responsibility. This responsibility must act in accordance with the legal measures so that firms do not engage in illegal actions. Social responsibility requires firms to focus beyond documents and figures and give great concern on environment and people. Andrew (2010) argues that corporate social responsibility can have a potentially negative effect on the proficient allocation of resources as they do not greatly use resources which create negative effects to people and environment. People channel their human in corporations which play great attention to the wellbeing of the environment and the immediate population. Therefore the corporation must act in a socially responsible manner so as to attract a large number of investors who will stay in the corporation for a long period The results of the study carried out by Nancy (2009) reveals that the government dictates entry of local businesses into the international market, investment and at times denies profit incentives. This is seen as a hindrance in free, fair and competitive market. Several business leaders argue that interference of government in the free market can limit production of fundamental goods and services, and this can lead to serious inefficiency and weakness of the country’s economy. George (2010) argues that corporate social responsibility creates economic distortion by interfering in businesses that generates public income such as financial companies, transportation, telecommunication, public utility and distribution Inconsistent business activities enable smaller business firms which are under public scrutiny to act les responsibly and this gives them a market advantage over larger firms that face more pressure to operate in a publicly conscious way. Therefore the requirement that business act in a socially responsible way diminishes the aggregate wealth of the society in proportion to the intensity of government and public interference. Additionally, even when corporate social responsibility does not greatly alter the corporate behaviour, the resulting business atmosphere steadily undermines the foundations of free market (Bob, 2009). In order to flourish and survive in the current market, a corporation must do more than simply practising business activities (Nancy, 2009). Market demand requires the corporations continuously look for new business opportunities, pursue innovations, acquire knowledge and accumulate a large stock of human capital that makes sure there is long term development which may be undermined by social responsibility. The accumulation of human capital is a long term procedure that needs some guarantee that the corporation will not makes changes in the near future that significantly may undervalue the accumulated human capital. According to Renddtorff (2009), Government intervention leads to instability in corporation and therefore is supposed to restructure itself in order to increase mobility and flexibility. Government intervention affects trading partners by forcing them to practice corporate social responsibility within the trading region. A corporate social responsibility rule actually elevates the status of trade partners but it lessens the stability of trading relationships because there are limits in business activities. This may lead to deterioration of the economy due to a limitation foreign income. If businesses go above the standards put in place by the law they can ease capital investment and increase profitability which in turn lead to increase in stock price. Socio-economic view According to Bob (2009), corporate social responsibility focuses more on the wellbeing of people and environment and reduces its concentration of business interests of profit maximization. Corporate social responsibility involves integration of environmental, economic and social considerations into decision making processes and structures of the business. It entails use of innovation to come up with value added and creative remedies to environmental and societal challenges. Renddtorff (2009) notes that it involves engaging stakeholders and shareholders to collaborate so as to effectively manage latent risks and create trust and credibility in society. It is about complying with the law in the appropriate way and taking into consideration the needs of the society and looking for more efficient means of satisfying the anticipated and existing demands so that a firm is able to create a greatly sustainable business (George, 2010). Bob (2009) notes that employees are the major constitutes of a company because without them then company cannot be able to carry out its business activities. The employees possess the power to lay down the terms of membership for every participant in the company. This is because the employees invest specific human capital in the company and also appoint managers and directors who help in management of business. At times managers controlling a corporation try to pursue the needs of the corporate social responsibility at the expense of their investors and employees. At times employees may be forced to overwork in order to meet the targets of the business. For effective accumulation of human capital, employees makes a large investment in their individual human capital and investors make investments in corporations which assure them of constant business activities. Employees and investors are reluctant to invest in corporations which are at a risk of change or if the basic corporate social plan destabilizes the structure of corporation (Bob, 2009). Renddtorff (2009) notes that corporate social responsibility may expose a business into these risks making it to destabilize its structure and alter business activities. This deterrent weakens the overall performance of a corporation which discourages talented recruits from joining the corporation. Renddtorff adds that corporate social responsibility laws give employees the power to remove existing managers and directors from these leadership ranks when they fail to manage the firms in a socially, responsible way. Ethical responsibilities signify he societal beliefs of good behaviour and expect firms to watch ethical measures when operating. The observation made by George (2010) is that firms are not allowed to expose employees to longer working hours or to work outside the official working time. Michael (2009) notes that ethical responsibilities are included in the legal system and enables firms to operate with humanitarian values at stake. Unrestricted responsibilities are voluntary obligations that corporations take which are above over and ethical considerations and may include charity walks to assist the less fortunate people in the society. If a firm follow the beliefs of several moral measures and actively take part in voluntary activities, the social responsibility element will generate a positive relationship between the corporation and parties who are connected to the firm such as employees, suppliers and the immediate community (William, 2010). Conclusion Corporate social responsibility prevents harm to people and the environment but it is seen as being harmful and dangerous to business activities. It requires the business to pay more concern to the welfare of people and environment which detract the business from its major goal of profit maximization. In a business world corporate responsibility should be applied more than the CSR because it will enable corporations to meet their business goals and objectives. Bibliography Michael, R., 2009, Environmental Management: Readings and Cases, 2nd Edition, SAGE Press, California. Bob, W., 2009, The Sustainability Champion's Guidebook: How to Transform Your Company. Aztext Press, London. Andrew, C., 2010, The Oxford handbook of corporate social responsibility, Oxford University Press, New York. Phillip, S., 2009, The Business Case for Corporate Social Responsibility: Understanding and Measuring Economic Impacts of Corporate Social Performance, Springer Press, New York. George, A., 2010, Handbook of Research on Global Corporate Citizenship, Edward Elgar Press, Washington. Nancy, L., 2009, Corporate social responsibility: doing the most good for your company. John Wiley and Sons Press, California. William, B., 2010, Strategic corporate social responsibility: stakeholders in a global environment.t SAGE Press, Miami. Walter, L., 2009, Professionals ́ Perspectives of Corporate Social Responsibility, Springer Press, New York. Renddtorff, M., 2009, Responsibility, Ethics and Legitimacy. Copenhagen Business School Press, Copenhagen. Paul, G., 2010, Business Ethics Cengage, Learning Press, London. Read More