Corporate Social Responsibility from Various Stake Holders Perspectives - Coursework Example

Running Head: CORPORATE SOCIAL RESPONSIBILITY Corporate Social Responsibility Name Course Tutor Corporate social responsibility Corporate social responsibility (CSR) has gained center stage among many corporations in the recent past. Business and firms have put a lot of focus and attention on their social responsibilities and the impacts it has on their businesses. This essay will examine the various aspects of CSR like its meaning, nature, advantages, critique, and ethics. Social responsibility covers a wide scope and thus different people define it differently. Most of the areas covered by social responsibility are human rights, employee welfare, professional ethics, community relations, environment and the marketplace. Supporters of corporate social responsibility view that it is necessary to have CSR because it has benefits that accrue to the business fin the long run. Some oft the benefits cited are enhanced reputations, employee loyalty and low labor turnover. The relationship between businesses and society is that they operate in a mutual manner. One cannot survive without the other. Businesses can only contribute to the welfare of society if they are profitable efficient and socially responsible. Majority of businesses have a goal of long term sustainability in their businesses (Nimalathasan, 2009,p. 229). Involvement is a way of maintaining trust, legitimacy and community support, employees and governments. In this context, CSR can be defined as the persistent involvement and commitment by businesses to act in ethical manner and contribute economically to develop and improve quality of life of stakeholders as well as society at large. Other definitions are the responsibility of a business or company to be respectful, fair honest, and trustworthy when dealing with it stakeholders. Adoption f polices that enhance sustainable growth through maximizing shareholder value and developing solutions to solve socioeconomic problems. It is also a balance of economic, social and environmental aspects in everything that a business undertakes (Moir, 2001, p. 18). All these definitions have been put forward by different individuals and corporations depending on their views on the topic. Perspectives of stakeholders on CSR There relationship between businesses and stakeholders can be strengthened through effective social responsibility. Different stakeholders have different views on the issue of CSR depending on how it affects hems. CSR covers a wide array of issues and not all are viewed by stakeholders to be equally positive. It mean different things for different people ant different times at one time social responsibility activities may be seen as a positive thing by one group o stake holders while another views it differently. Many businesses do not carry out social responsibilities to seek financial gains but to create an environmentally and socially conducive atmosphere. It is a form of exchange between stakeholders and business as both parties have some perceived value they seek to gain from it. For consumers the value they seek for their spending is translated to high value products and fair pricing which meets their specific needs and wants. From the point of view of employees, development plans, benefit packages, family welfare and safe working environments are what they would consider as CSR to them. Employees would also consider fair treatment and ethical responsibility by employers towards them as effective CSR (Peloza & Shang, 2011, p. 121). The community at large also seeks to benefit from CSR. It is assumed that the activities of a specific business directly affect the community where its operations are held. In this view, products produced should generate minimal pollutants. The processes of production are also expected to be environmentally conscious. Some of these perspectives cut across several stakeholders as the same consumers are part of society and the employee fraternity. Philanthropy towards society is also considered as a CSR contribution. For instance, supporting a needy community such as a rehabilitation centre or funding a recycling initiative. While such perspectives directly benefit stakeholder, they add intrinsic value to businesses. Arguments for CSR CSR may not bring financial benefits to a business in the short run however, it adds intrinsic value to businesses and its benefits are recouped in the long term. Studies have been conducted over the years to determine the relationship between CSR and the performance of a firm. There have been mixed findings but trends seem to suggest considerable benefits. CSR can be associated with strong employee commitment towards a company and long customer retention. This has been proven through studies in samples of American and French firms. A study in the U.S linked social responsibility to consumers’ perspectives of products and the actual buying intent. Most employers will agree that employees are one of the most valuable assets toward achieving organizational goals. In this view, retaining the best workforce and nurturing talent is paramount. CSR through employee justice and fairness reduces the rate of employee turnover for a firm. Job satisfaction is enhanced through fair treatment and provision of a conducive working environment (Galbreath, 2010, p. 415). Customer satisfaction is directly linked to retention and repurchases. It is a major indicator of past current and can even be use to predict future trends. Consumers always seek value in their purchase. The value they get is attached to fairness, equity and quality. Consumers also attach emotional perspectives to firms that have additional social responsibility initiatives. They would rather buy from firms that are socially conscious than those that are not. For instance, Volvo was able to considerably raise consumer satisfaction by demonstrating how consumers were getting g high value for their money in 2003.cosumersare generally strict on ethical and professional responsibility when making buying choices (Galbreath, 2010, p. 419). The image or reputation of a firm is everything. A good image translates to higher performance and sustained growths. Positive reputations are indicators of high esteem and regard. A reputation is determined by how properly an organization undertakes its activities, meets its expectations and conforms to the need s of relevant stakeholders. The stature in society of a socially conscious firm is lifted and this places it at a strategically competitive point (van Marrewijk, 2003, p. 96). Critique of CSR Corporate social responsibility is a voluntary and not a mandatory undertaking. In this sense, it has received negative sentiments as well. Though some of its aspects are seen as necessary, some argue that the whole idea of CRS is unnecessary and is a waste of resources. Business pay taxes and other levies as it is the legal obligation to do so. The taxes pad to government authorities are meant to provide social services to society. Based on this argument, businesses spend billions of dollars on CSR in undertaking the responsibilities of government authorities. It poses financial burdens to businesses in the name of sustainability (van Marrewijk, 2003.). The benefits of CSR in a business may take decades or may never be actually realized. This is mostly due to its voluntary nature and thus stake holders do not owe the business any form of redress. Another main disadvantage of CSR is that there is no sure ay of measuring its effectiveness or success. It accomplishment is largely intangible in for of satisfaction and perception, there is no sure way of substantiating these gains to profits (Siegel, 2006, p. 9). Ethical organizational behavior Many concepts have been developed in business environments to refer to humane, transparent and ethical way of doing business. It is a critical issue for businesses to develop frameworks to facilitate sustainable growth. It is in the long term interests of business that ethical organizational behavior is effectively upheld. The study of organizational behavior relates interaction of individuals and groups of people in an organization. The scope of ethical organizational behavior is wide and covers individual personalities, employee motivation, leadership ethics, organizational responsibility, consumer relations among others. The management process and interaction with stake holders is the key to maintaining satisfaction and growth at all platforms. During the day to day running of functions, they must display high degrees of ethical consciousness and maintain accountability and transparency (Carroll, 2010, p. 10). The relationship with the external environment to a firm plays a crucial role in its performance. The main areas of concern are social, cultural, economic, government, legal, political, and environmental. In all these areas, there are ethical practices that an organization should cope with and comprehensively uphold. Ethical behavior is especially crucial when dealing with environmental, cultural, and community. Each strategy should be channeled to fit in the business environment it is operating in cultural, social, psychological and political aspects. In managing any firm, it should be clearly understood that people are the main component, both internally and externally, and should be properly managed. Therefore, every strategy should be “people minded”. The relationship between worker and their subordinates and supervisors should be well established in an environment based on mutual trust that creates a general understanding. Internally, productivity is enhanced through ethical treatment of employees by their superiors and vice versa. The understanding that every one has an ethical responsibility creates harmony and employee turnover is averted. As mentioned earlier, the public image or perception held is significant for any business. Organizational ethical behavior towards the external environment will boost the public image and perception (Anderson, 2001, p. 23). In conclusion, CSR has been there for long and will continue being significant in future. In the public domain, it is a way of corporate accountability and long term sustainability. It is a form of ethical contribution between businesses and stakeholders on which growth, perception and sustainability depends. As globalization takes center stage, CSR is becoming a necessity in the economic system References Anderson, J, 2001, ‘Social Responsibility and the Corporation’, Journal of Business Horizons , pp. 22-27. Carroll, A, 2010, ‘Corporate Social Responsibilty and Related Terms’, pp. 1-10. Galbreath, J, 2010, ‘How does corporate social responsibility benefit firms?’ European Business Review , vol. 22, no. 44, pp. 411-431. Moir, L, 2001, ‘What do we Mean by Corporate Social Responsibility’, Corporate Governance , vol. 1, no. 2, pp. 16-22. Nimalathasan, B, 2009, ‘Social Responsibility of Business’, Social Responsibility of Business , vol. 3, pp. 227-236. Peloza, J, Shang, J, 2011, ‘How can corporate social responsibility activities create value for stakeholders? ‘Academy of Marketing Science ,vol 39, pp. 117–135. Siegel, D, 2006, ‘Corporate Social Responsibility:Strategic Implications’, Journal of Management Studies , vol. 43 no.1, pp. 1-17. Van Marrewijk, M, 2003, ‘Concepts and Definitions of CSR and Corporate Sustainability’ Journal of Business Ethics ,vol. 44, pp. 95–105. Read More