Impact of Corporate Social Responsibility on Business - Essay Example

Corporate social responsibility By Presented to Introduction Corporate social responsibility, also known as corporate citizenship, corporate conscience or responsible business, refers to a form of self-regulation entrepreneurial practices integrated into a corporate. The policies of CSR function as mechanisms where a company monitors and makes sure that it is in compliance with the international norms, standards of ethics and the law. The view that corporate social responsibility (CSR), as a way for corporate organizations to “give back” to the community and demonstrate their conformance to good business ethics, makes them moral entities is flawed (Dubbink and Smith 2011, P.2). The viewpoint from which corporate organizations deem CSR as the defining characteristic of moral entities places them in the cross hairs of moral analysts in the business world. Unfortunately, moral entities are more than corporate that in trying to improve their overall financial position (IP 2002b, p18). A moral agent is an individual that can be blamed for his/her actions and their consequences for they act in full knowledge of right and wrong. In addition, moral agents must have life, consciousness, and abstract decision-making ability. In the light of this definition, corporate cannot be moral agents, even while they are held responsible for their actions and fully comprehend right and wrong. This is because corporate is the result of pooled resources, qualified and set objectives, without life and consciousness in their social standing try to involve themselves in social welfare activities (Zhu, Han, Zeng, and Huang, 2011,par8). It is a well- known fact that all corporate and indeed business organizations are in it to make profits, so trying to make use of CSR to justify themselves as moral agents is tantamount to attempting to deceive the society especially where the CSR activities are in form of material benefits and other “gifts” (Chinese Entrepreneur Survey System 2007, par 12). The scope of this manuscript is not to castigate the corporate world for its attempts at giving back it merely seeks to expose the falsifications that exist in statements like ‘corporate organizations are moral entities. While good business practice involves corporate groups exercising global business citizenship, the interpretation of these activities from an ethics perspective is where the problem lies. It seems that most people are lost in the benefits accrued from the CSR activities and fail to see the bigger picture. This is the main debate over the issue in the current society. This paper seeks to provide information on corporate social responsibility, how it is applied in business and its impacts. In the current society, CSR has gained exceptional thrust and has become an issue crossing many borders as it affects how organizations carry out their daily operations. CSR is under debate in many locations because individuals tend to have comprehensions that differ over the issue. Some see CSR practice as a beneficial undertaking where corporations are applying its benefits in multiple ways. Some people have it in mind that this practice distracts the primary role of businesses. There are those who view it as a window-dressing practice, and others take it as an attempt to dissuade government’s role as an ombudsman over authoritative cosmopolitan conglomerates (Walsh 2004, p17). In the society today, the prominent CSR areas include legal compliance, employee welfare and rights, ethics, community and philanthropy investment, sustainability, managing the environment, corruption, market relations and corporate governance. This paper will major on the Republic of China and how the CSR practice operates in the country. China is known to be a lucrative nation because of its economy that is expanding (Logsdon and Wood 2005, p59). The positive changes in its economy have been made possible by reforms made by the government as well as good international relations. The nation’s economy has been improving since 1978 to date where it is labeled second largest in the globe. The cultural nature of Chinese has been felt in businesses in China as well as in the Western world. Currently, China is the largest exporter, and it benefits from cheap labor, cheap goods, and outsourcing. In essence, at least three viewpoints of CSR have been identified with their respective applications to business. Three Viewpoints of Corporate Social Responsibility Ideally, scholars have had three principal viewpoints on CSR. Firstly, there is the narrow, classical economic view as advocated by Friedman and Smith. According to this perspective, a business is expected to maximize profits while at the same time being consistent to the standards provided by the law. This has the implication that the business ought to strive to attain maximum results, but standards of goods and service delivery ought to be as per the expectations of the society. The classical view of CSR draws substantial illustration from existing literature with Carey’s work being an outstanding example. Scholars have illustrated that, there exist clear distinction between business organizations, behavior, and goals. Carey also observes that the criteria of business performance are subject to economic growth and efficiency. It is also evident from literature that profit maximization is the primary goal of all profits. Despite the effort to maximize profits, all business ought to exhibit purely economic activity with judgment being on the basis of economic terms. Milton Friedman had the view that business has only one social responsibility in any free society (Chow & Friedman 1970, P.687). This responsibility entails the utilization of the organization’s resources alongside getting involved in processes that have the objective of increasing profits. However, all the business activities ought to be consistent with such standards as free and open competition in total absence of fraud or deception. The classical view of CSR states that socially responsible actions are associated with reduction of reduction. They have the ability of reducing profit, wages, and sales while rising prices. In addition, socially responsible actions are significantly the role of political representatives. These actions also have the responsibility of imposing unequal costs among various business entities dealing with same product line and exposing stakeholders to hidden costs. The classical view of CSR also draws illustration from the Theory of Moral Sentiments. According to this theory, self interest cannot be termed as the defining virtue of ethic in business but it is sympathy. In addition, empathy is the source of morality. Economic actors are expected to exhibit restraint, prudence, respect for others, benevolence, and justice. CSR attempts to draw utilitarian defense according to which the society would be served in a better way if everyone pursue their own business interests. In addition, individual self-interested practice would receive coordination from an “invisible hand’ with the consequence being social good. In business practice, the first perspective of CSR takes course as outsized companies continue to employ profit maximization strategies, while observing rules and regulations that govern competition and other processes of production. For instance, almost all global food chain aspects are controlled by 10 corporations. The second view of CSR is the socio-economic view according to which business has more responsibility than profit making. The more responsibilities are inclusive of moral minimum and affirmative duties. Ideally, the affirmative duties have two aspects which are attempts do good and to prevent harm. From literature it is evident that, businesses ought to adhere to moral minimum alongside negative injunctions. In addition, all business organizations ought to promote good and avoid harm as part of their affirmative duties. The three scholars observed that the obligation to avoid harm is inclusive of steps aimed at the prevention of activities with the potential of preventing harms. This perspective takes after Billiton’s environmental policy-this is a policy that ensures management systems with the objective of identifying, controlling, and monitoring environmental risks. The policy also has the responsibilities of conducting research alongside the development of programs whose roles entail the conservation of resources, improvement of processes, waste minimization, and environmental protection. This second perspective of CSR also draws substantial illustration from the stakeholder theory. According to this theory, business is characteristic of an immense deal of social relationships. Ideally, these relationships are surrounded by various obligations to consumers, the local community, employees, investors, and suppliers. According to the stakeholder theory, business has the function of harmonizing various stakeholders’ interests. It is observed that stakeholders and stockholders ought to make demands of various actions from the business’ management considering that their stake in the organization. The theory further observes that stakeholders’ duties are recognized by the law. With respect to Unitarianism, stakeholders of a business ought to receive equal consideration with management faced by the obligation to put into account the results for all affected. The good relationship between business and the society can be illustrated by the case of China. In this nation, the exchange for a favor is very crucial in laying grounds for any successful business either to an individual, organization or team. Corporate social responsibility is all about abiding by ethical rules and regulations in order to achieve set goals and satisfy clients (CPC Central Committee 2004).This is exactly what happens in China where all entrepreneurial persons follow the Confucian system of morals and ethics. They also advocate the loyalty, respect, sincerity, seniority, age, duty, modesty and avoidance of conflict (IP 2002a, p36). Chinese people have the communal culture that encourages people to work towards attaining the same goals (IP 2003b, p.38). While doing this,they keep in mind collective interests of the population of China. (Jensen, 2006, par5).Teams, organizations and individuals who are in business in China emphasis on the importance of communication where it should be friendly, pays attention to body language and facial expression and avoiding activities during social events (Yardley 2004). People involved in entrepreneurial activities are required to uphold the integrity and be honest as per the Chinese culture (Ruhe and Lee 2008, p.78). Chinese people believe that the three motivators in business are honor, power, and money. It is against the culture of China to disrespect a worker or do something to them that will negatively affect their dignity. Business gifts are accepted in China, but something that is of very high value could be offensive. It is required that Chinese be open to new experiences and participate in as many activities as possible (weyzig 2008, p5). The third perspective of CSR holds that business has philanthropic affirmative duty with the aim of assist0ing and contributing to the society. Ideally, business is obliged to assist in the provision of solution to social problems. This obligation has the objective of doing good thus shaping the society. Scholars argue that there is existence of corporate citizenship which refers to the relationship between business and the society. They also argue for the existence of duty of gratitude which refers to the continuous use of resources with the objective of giving back to the society. This third perspective of CSR also discourages the regulation of business activities by the government alongside correcting social problems that result from business. In addition, scholars have advocated for prudent stewardship with respect to resources of the society; they also advocate for social power which refers to the balance existing between responsibility and power. In the long-run, the third perspective of CSR still promotes the business’ profitability. According to CSR broad maximal view, business ought to manage its resources in an outstanding manner, weighing its desires and needs alongside those of other people in the society. Ideally, business owners are expected to show appreciation to societal resources, natural resources, alongside financial resources accumulated by past generations. In real business practice, the third perspective of CSR is illustrated by social power in the globe; ideally, the 100 most outstanding companies in the world are characteristic of revenues that are more than half of the GDP of global nation states. In addition, 40% of the global trade is accounted for by 359 corporations. The Challenge of developing business ethics in China The challenge of creating business ethics in China is the main reason there is high demand of CSR in the nation. CSR in China is examined through checking labor issues, business scandals, food scare, and environmental degradation experienced in the country currently (Waddock 2008, p4). This is the key reason China’s employees are doing their best to stick to morals and ethics. Having a great market as the largest exporter is an advantage to them since they earn more from what they export (Forney 2004, p.38). In this case, they are expected to do all they can in order to export useful products. The management staffs are so keen in this nation, to ensure that they do not disappoint. Regarding such development of business ethics, there are two relevant stages to differ: business ethics before China entering the WTO in early 2002 and the process after that (IP 2003a, p.37). During the first phase, business ethics was rather considered as an academic discipline without practical implications. It was strongly influenced by Marxist standards as well as Chinese traditional values. Before China established this SCR technique, there were several cases of unethical behaviors among employees of various organizations. Being the largest exporter country that it is, China was under pressure from under multinational organizations (Wei and Yang 2003). The aim of any organization is to work towards achieving its set goals and making sure that the clients are offered excellent services. In order to maintain their name as the largest exporter and continue selling more products to more customers, China had to make this development. It is a development that would make Chinese organizations maintain their good reputations and keep making more profits (Singer 2008, p39). Some rules and regulations governing institutions had to be changed. The technique was to ensure that all employees are conversant with the rules (French 2006, par5). This helped to raise their working standards and make them understand more of what is expected of them at work. Developing business ethics in China made positive changes in the economic sector and, as a result, the country has maintained its economic entrepreneurial number and state internationally (Kahn 2003a, par3). Conclusion and Recommendations There are there principal perspectives of CSR which are classical economic, socio-economic, and maximal social views. CSR is one of the methods corporate techniques in the process of being socially accountable, but its merit in the branding of these organizations as moral agents has always been a contentious issue (NESTERUK 1991, p9). Many scholars have tried to pass off the use of this exercise, among others, as being indicative that corporate are moral agents. There are differences between the United States culture and that of China. For both sides to benefit, both need to adapt to one another in the way they conduct their businesses. When the United States is formulating a business strategy to be implemented in China, they need to take into account the Chinese cultural influence (Waddell 2008). CSR is an active undertaking in any organization. In every nation, leaders of any entrepreneurial activities should ensure that employees abide by ethical and moral rules. This is to ensure that all the operations in their organizations work smoothly and for the betterment of the society as a whole. For organizations to work and achieve their set goals, the management should make sure that everything is right and that each employee is assigned to their best line of duty. The strategy will help them do handle their tasks efficiently since they are best suited in where they have been placed. After every employee has been put in place, it is necessary for the authority to have their eyes on every employee so that they can adhere to all rules and regulations. The efforts of the employees are the ones that determine the success of the organization. Not only do their efforts matter but also communication where they are expected to join hands and work together in unison. The managing department should also offer a helping hand by giving all the employees equal treatment and have effective communication with them as well. The mentioned strategies, if implemented, contribute to building a business that a positive reputation when it comes to ethics. Ethics in business is fundamental, for any organization that wishes to work for the best of both the society and itself. References List Entrepreneur of China Survey Application: 2008, The Survey of China's Entrepreneurs' Evolution and Growth ( Machine Press, Hong Kong) (in Chinese). Chong, J. 2009, How Chinese Migrant Workers Survive,The Report of Survival (China HongKong Press, Beijing) (in Chinese). Chow, G. and Friedman, M. (1970). Friedman On Money. The Journal of Finance, 25(3), p.687. CPC Central Committee: 2004, ‘CPC Decision of Central Committee's Decision to Enhance the Government Agenda. 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