Opponents of Corporate Social Responsibility - Coursework Example

Corporate social responsibility The relationships between the society and business have been studied for a long time. The idea of the duty of the business towards the society and in particular the stakeholders have been widely acknowledged since 1950’s, thus, increasing the expectations of the society (Moir 2001). Lantos (2001) refers to the corporate social responsibility (CSR) as the way in which organisations integrates economic, social and environmental concerns into their operations and values in an accountable and transparent manner. CSR promotes the accountability of a business vision to a variety of stakeholders where the key areas of concern include the wellbeing of employees, protection of environment, the community and generally the civil society at present and in future. Thus, the concept of CSR is supported by the idea that corporation can no longer act as economic entities that are isolated from the broader society. Thus, CSR is gradually sweeping away the traditional views that are based on profitability, competitiveness and survival (Carroll 1999). Different characteristics of CSR include long-term perspective, accountability to stakeholders, beyond the law and social contract among others. Carroll (1999) states that long-term economic gain perspective is part of CSR which leads to future profitability and social power. Thus, in addition to short-term profits, businesses also have a guaranteed prosperity in the rapidly changing environment. Johnson & Scholes (2002) adds that CSR is beyond the narrow legal, economic and technical requirements of a corporate. It is concerned with the way in which a corporate exceeds the stakeholders’ minimum obligations. According to Lantos (2001), CSR is associated with social contract given that the authorization of the corporate to buy, sell or enter into a contract is empowered by the stakeholders. CSR is becoming increasingly important in organisations. This paper discusses why stakeholders have currently given more attention to CSR and the arguments for and against the CSR. According to Cramer, Jonker, & van der Heijen (2004), the key to understanding the CSR is for the corporate to consider a holistic attempt to engage the wide spectrum of the stakeholders. In his explanation of the stakeholder theory, Freeman (1984) described the stakeholders as any group or an individual that is affected or might affect the activities of the organisation. These include employees, clients, contractors, suppliers, community, government, shareholders, government and non-governmental organisations. Currently, there has been increased attention by the stakeholders towards CSR and various factors and influences that has led to this include globalization, changing social expectations and increasing affluence. Globalization with its focus on multinational enterprises, cross-border trade and global supply chain has resulted to an increased CSR concerns in relation to protection of environment, practices of human resources management, and health and safety among others. Due to advancement in technology such as personal digital assistants and internet among others, it has become easier to track the activities of a corporate and disseminate information in regard to the firm. In addition, non-governmental organisations a drawing attention regularly to the practices of the business in which they view as problematic (Waldman et al 2006). Investors and customers are also showing their increased interest in support of business practices that show responsibility. They are also increasing their demands for information on how various firms are addressing the opportunities and risks associated to environmental and social issues. Thus, the stakeholders are making it clear that these corporations must meet the environmental and social care standards, no matter their location of operation. With a high number of serious as well as high profile breaches of the ethics in the corporate, there have been an elevated mistrust of corporations from the public. In turn, this has led to highlighting the need for improved transparency, ethical standards, corporate governance and accountability. Government, intergovernmental and non-governmental bodies such as United Nations have developed guidelines, compacts, principles and various instruments and provide social norms in regard to acceptable conduct. There has been increasing awareness in regard to the limits of government regulatory and legislative initiatives in order to capture all the issues addressed by the CSR (Greenwood, 2001). The arguments in favour of CSR are broadly split into two; moral and economic. Based on moral arguments, while recognizing that it is necessary to have profits in any business entity, all the stakeholders in the society should strive to make life better and add value. Business relies much on the society where they are operating and they cannot prosper when isolated from the society. They require its source of employees, the infrastructure which is provided by the society as well as the consumer base. CSR recognizes this interdependence and also the means of delivery of that obligation for the benefit of the society and the business (Valentine, & Barnett, 2003). CSR advocates believe that the general goal of the system of economy is furthering the social welfare. The purpose of the business in advanced economies should be extended beyond profit and efficiency maximization. The society expects the corporate to have an obligation to the society, to the employees, and customers beyond their narrow concerns on shareholders and traditional bottom line. They point out that organisation cannot exist in isolation and the business has an obligation to draw and contribute to the community which they heavily rely on with no exceptions (Lantos, 2001). Based on an economic argument, there are real economic benefits for a business obtained through pursuing a CSR strategy. The proponents of economic argument believe that CSR is a presentation of a holistic approach to the business. This means that an effective policy of CSR will infuse all features of operations. They believe that the actions taken by corporations currently for adopting CSR into the firm is a representation of a real point of a competitive market advantage and differentiation where the future success hinges. Thus, CSR nowadays means to match the operations of a corporate with the values and demands of the stakeholders during the time when there can be a rapid change of parameters. For instance, taking customers as one of the stakeholders, CSR will add value because it allows the firm to have a better reflection of the values of the customer that the firm is aiming to serve. Thus, CSR in a corporation affects the features of all operations due to the need to put into consideration all stakeholders. Those in favour of CSR argue that it is a management principle applicable for all companies where; the companies must respond to what the society expects in order to win their operation license, it is meant to improve the financial results of the company if it is well focused (Tyrrell, 2006). Based on the arguments that favour CSR, the benefits of adopting it depends on the different perspectives of stakeholders. Based on the company’s perspectives, the benefits include improved financial performance, enhanced reputation and brand image, lowering of costs of operations, increased customer loyalty and sales, greater quality and productivity, diversity of workforce, competence of employees, product safety, and reduced regulatory oversight (Moir 2001). Based on the perspectives of the society, that is, the general public and the community, the benefits associated with CSR include charitable contributions, product safety and quality, employee volunteer programs, and corporate involvement in community employment, education and homelessness (Freeman, Wicks, & Parmar, 2004). On the basis of the perspectives of the environment, the benefits include greater recyclability of the materials, greater use of renewable resources, better durability and functionality of the product and integration of tools for management of environment into the business plan with inclusion of standards of environmental management, life-cycle costing and assessment and eco-labelling (Tyrrell, 2006). The opponents of CSR believe that it is just a fashionable trend which will disappear in time. They believe that the disappearance will be brought by the current crisis in the economy. Their perspective is based on the fact that the appropriate mechanism for allocating the resources of any state is through a marketplace. They base their views on traditional grounds where everything will be effective if the companies will incorporate an approach of maximizing the profitability. They argue that the establishment of the company was based on the proposition of focusing on profitability. The opponents also believes that if the company is able to provide high quality product where the product is in demand, fulfils it commitments in regard to laws and regulations as well as adherence to the payment of taxes, then the company is said to be fulfilling its mission. They believe that the issue of improving the social welfare is supposed to be addressed by either the non-profit making organisation or the government (Carroll, 1999). Opponents of CSR also view this as a strategy that is developing when financial groups, multinational economic as well as the economy of the global market is undergoing a serious internal crisis. They say that at this condition, CSR is full of many ethically and socially irresponsible practices. Such practices that are associated with CSR include questionable purchases, accounts cheatings, fraudulent bankruptcies, and very high salaries for managers as well as disrespect for basic values. They also add that instead of international conventions, law and collective agreements, CSR sing the praises of social sponsoring, codes of conduct, and social labels. They also claim that use if the concept of CSR in corporations is a way of weakening the role of corporations in the society and diminishing the public authorities. This is done through downgrading the trade union roles and replacing public regulations and laws by codes of conduct or ethics that do not contain any legal value. In addition to this, multinational and transnational corporations usually collaborate with the auditing and evaluation partners in their activities in order to favour such corporations. They add that these corporations do not act towards employees in a responsible manner which results to various issues such as child labour, work harassments, sweatshops and other problems (Tyrrell, 2006). Conclusion CSR is currently one of the most debatable concepts that is adopted by most corporations as well as business entities. There has been an increased attention by stakeholders towards CSR. Various factors and influences that have led to this attention include globalization, changing social expectations and increasing affluence. Those in favour of CSR divide it into categories; moral and economic. Based on moral grounds, the proponents believe that business relies much on the society within which they are operating and they cannot prosper when isolated from the society. Based on an economic argument, they believe that there are real economic benefits for a business by pursuing a CSR strategy. The opponents of CSR believe that it is just a fashionable trend which will disappear in time. They believe that appropriate mechanism for allocating the resources of any state is through a marketplace. Thus, CSR has various advantages. It makes corporations to work responsible towards environment, employees and the society at large. It helps in bringing the corporations and the society closer leading to a motto of thinking globally and acting locally. The activities of the corporations are presented in code of ethics and conduct that is available in the websites as a way of transparency in the company’s operations. The activities of CSR also improve the reputation of the company, the brand image therefore, increasing the profit. However, CSR has some challenges such as presenting very good CSR activities and responsibility towards the society but acting very irresponsibly leading to damages on people and environment. In addition, some big corporations are capable of conduction CSR activities on local community level but on the other hand, causing a large damage to the planet at large scale. References Carroll AB 1999, Corporate social responsibility, Business and Society, vol. 38, no. 3, pp. 268-295. 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