Various Perspectives on Corporate Social Responsibility - Coursework Example

Various Perspectives on Corporate Social Responsibility (Name) (Institution Affiliation) (Date) Introduction Since the 1950s, issues revolving around Corporate Social Responsibility (CSR) have raised serious debates. In effect, the definition associated with CSR has been changing in practice as well as meaning. According to Lee (2008) and Secchi (2007), the classical perspective of corporate social responsibility was narrowly limited to philanthropy. However, Lee (2008) posits that later in the 1970s, the classical view started defining CSR based on business-society relations. Accordingly, the classical view indicated how social corporate responsibility brought benefits to both businesses as well as the society as social problems were solved thus organizations earned good reputation. However, opponents of CSR argue that community developments are supposed to be supported by the governments as businesses and citizens pay tax expecting services as well as development. But this paper argues that businesses interact with the community as well use the environment to achieve their profit making objective. Consequently, they have the sole responsibility of making sure that the environment is well preserved. Moreover, without the community, the corporation has no business thus it must involve itself in developmental initiatives that can benefit the community. In effect, this paper aims to analyze critically different perspectives related to CSR. The paper will also give findings of the social or ethical obligations of organizations with regard to corporate social responsibilities. To achieve, the paper will look at various concepts related to CSR as well as business-case arguments of CSR. Ethical theories related to CRS CSR is widely defined as the beneficial, ethical as well as society friendly undertakings that businesses engage in, beside their normal operations, in order to uplift the lives of the community in terms of development. The utilitarian theories view corporate social responsibility as a means to benefit the business economically (Secchi, 2007). According to these theories, firms realized that there was a need for an economics of responsibility as businesses were typically known for profit maximization. As such, firms had to look for ways that could generate more profits constantly in the burgeoning competitive environment (Friedman, 2007). Firms had to come up with strategies that would sell the company as a caring and socially conscious entity thus establishing the CRS initiatives (Secchi, 2007). Accordingly, business came up with business ethics that aimed at making sure that the corporation was ethical to the surrounding communities. The classical perspective associated with the concept of laissez faire business gives way to public control, determinism, personal responsibility to CSR and individualism. According to Mele and Garriga (2004) corporations or firms are often considered as instruments for creating wealth. Thus, much of the so-called corporate social responsibility is aimed at building reputation for the company to continue ‘ripping’ from the community and public at large. This view is strongly buttressed by Secchi (2007), who posits that CSR initiatives are aimed at achieving economic results. On the other hand, Friedman (1970) in his early researches posited that the resources, as well as amenities, which corporations put in place as an undertaking in CSR, elevate the community from serious challenges. What he failed to point out, however, is whether the initiatives are aimed at bringing economic results in the end or if they are conducted for the best interest of the community. Later in the mid-90s, Litz (1996) countered Friedman’s (1970), arguing that the concept of CSR is associated with developing strategies that end up utilizing the firm’s dynamic natural resources. The developing of strategies are aimed at giving the corporation competitive advantages. Litzs (1996) also pointed out that the altruistic activities, which companies undertake are often socially considered as vehicles for marketing. Secchi (2007) contends that the utilitarian groups of theories can be divided into two: the idea of functionalism and the social costs of the firm. It is has been suggested (Secchi, 2007) that the social cost theory views corporate social responsibility from a social-economic system perspective. Here, the community is considerably influenced by the corporate non-economic force (Secchi, 2007). Equally, Garriga and Mele (2004) associate the social cost theory with the instrumental theory as it views CSR as the means to the end. Accordingly, social power of the firm is often materialized precisely based on its political relationship with the society (Bowie, 1991). Thus, the utilitarian theory posits that businesses need accept social duties as well as rights to engage in Social Corporation. On the other hand, the functionalist theory asserts that organizations should be viewed as part of the economic system, where making profits is one of their objectives (Wood, 1991). The functionalist theory views a firm as an investment, which should bring returns to the stakeholders as well as the investors. Based on the firms’ internal point of view, corporate social responsibility was invented as defense tactics against the industrial system, which holds that there should be a balance between making profits and social objectives. Today, CSR in business practice has moved beyond sheer philanthropy. It involves a multifaceted set of business practices, which attempt to address the ethical implications of the corporation. This could include social accounting and reporting as well as recruitment activities, where the firm is seen as a more “progressive employer.” Similarly, corporations today carry out CSR with the vision of giving the brand as well as the firm a high-level reputation (Ip, 2009). It is argued that the key terms associated with social corporate responsibility include corporate accounting, stakeholder management and corporate sustainability (Carroll, 2000). As Carroll (2000) puts it, organization should go by the stakeholder theory, which holds that all profit-oriented organizations must consider the entire of stakeholders as having a stake in the corporation. Carroll (2000) argues that ethical business practice rather than sheer altruism is useful in enhancing the value of the organization as some stakeholder can damage the company’s reputation. Additionally, Carroll (1999) asserts that business sustainability requires sustainable initiatives that can accommodate future generations as far as environmental, social as well as economic dimensions are concerned. Further, Carroll (1999) adds that the post-Enron drive for dialogue as well as managerial transparency is associated with accountability. Business Case for CSR There are four main business-case arguments related to corporate social responsibility practices: cost and risk reduction, competitive advantage, legitimacy and reputation and win-win situations Kurucz et al. (2008). To begin with, the cost and risk reduction arguments constitute justifications that posit corporate social responsibility activities often help organizations to limit their costs and risks. Typically, stakeholders often have demands, and these demands can sometimes threaten the viability of the organizations. As such, the firm has the obligation to mitigate the potential threats through engaging in environmental or social development initiatives (Wheeler, 2008). Equally, Smith (2005) points out that corporate social responsibility initiatives such as being environmentally supportive enhances long-term shareholder value through limiting costs and risks. Smith (2005) further contends that CSR practices that are related to equal employment opportunity statements that are essential in illustrating an inclusive policy that aims at reducing employee turnover by improving the workers’ morale. Consistent with Smith’s (2005) arguments, Detomasi, (2008) posit that the lack of diversity in the workplace can cause high rates of absenteeism as workers may become disgruntled. Moreover, Berman et al. (2000 p.489) points out, that corporations must be environmentally proactive as it results in cost and risk reduction. Accordingly, when an organization engages in environmental issues, there are high chances it benefits from lowered costs resulted from complying with both the present as well the future environment regulation. Further, it enhances the firm’s efficiencies as well as drive down the operating costs. Further, Laszlo (2003) posits that that being environmentally proactive helps in reducing the negative impact associated with social concern. For instance, a lawsuit filed against twenty-seven renowned retailers associated with Saipan Garments Company in 2000, depicts the amount of risk a firm faces when it fails to adhere to adequate vendor standards. Laszlo (2003) also points out that establishing a positive relationship with the community can help a company to gain tax advantages. The second business-case argument posits that through CSR activities, organizations gain competitive advantage. Here, the term “competitive advantage’ is meant to depict the differentiation strategy a firm uses through CRS to stand out among the rest in the competitive market (Simon et al., 1972). Accordingly, companies use CSR initiatives in order to be unique as well as position themselves as better than their competitors and community friendly. Firms take on new CSR practices in order to be ahead of their competitors. Accordingly, an organization may come up with a cost leadership strategy, which may help the firm to gain more advantage over its competitors. For instance, in 2014, Starbucks came up with a project referred to as ‘Youth Action.’ This initiative was aimed at supporting about fifty thousand youths to create as well as participate in projects that could solve the current problems their community was facing. Further, the company gave out more than $ 2 million to already established youth projects in America. Third, is the argument concerns creating and maintaining the firm’s reputation as well legitimacy. According to Suchman (2005, p.274), through CSR activities, firms get to enhance their reputation as well as strengthen their legitimacy. Porter and Kramer (2006) maintain that legitimacy concerns the appropriateness of an entity’s actions in regard to the existing socially constructed system of values, beliefs and norms. Accordingly, the public will always judge an entity’s action in relation to its activities; if they are desirable or not. It is argued (Porter, 2008) that perceptions, which reflect a firm’s concern for the community depicts that the organization can establish ‘mutualistic relationships.’ Thus, it indicates that a company can carry out its operations while adhering to the existing social norms and values as well as meeting the various stakeholders’ expectations (Waldman et al., 2006). In effect, organizations’ CSR practices often enhance the firms’ ability to attract investors, consumers as well as employees. As Arlbjørn et al. (2014) points out that majority of consumers are often influenced by the firm’s CSR reputation initiatives. On the same, note recent studies indicate that employees often prefer working with CSR oriented organizations. The final argument on business-case for CSR contends that firms seek win-win results through synergistic value establishment. It is argued (Porter & Kramer 2002) that synergistic value establishment arguments concentrate on exploiting opportunities, which address the conflicting stakeholder demands. Organizations often achieve this through creating varied definitions of value for several stakeholders simultaneously (Vogel, 2005). Porter ad Kramer (2002) contends that when firms get the “where” and “how” right, competitive advantage as well as philanthropic activities often become mutually buttressing thus creating a vicious circle. Furthermore, Porter (2002) holds that a firm’s philanthropy activities can be used in influencing the organization’s competitive context thus allowing the company to enhance its competitiveness as well as fulfill the stakeholder’s needs. Findings From this study, it is definite that businesses have the ethical or social obligation to take care of various developmental initiatives in the community. Organizations do not operate in a vacuum and as such, one cannot argue that the community’s affair does not affect the business at all. Whereas the government should be charged with looking after the welfare of its citizens, firms cannot abandon the community on that pretext as the company’s success depends on the community’s sustainable growth. Corporate social responsibility should benefit the community as firms operations involve the environment in which people live in. For example, a mining company such BHP Billiton emits a considerable amount of greenhouse gas, which the end results is air pollution and largely contributes to global warming. Thus, the company must be socially responsible in that it should come up with technologies that limit the quantity of carbon dioxide emitted. Further, such companies should take part in planting trees as well other environmental proactive activities. The study gathers that firms are obligated to share the negative consequences that come as a result of industrialization. Firms must increase conscience-focused marketplaces thus nurturing more increased business processes. Further, companies should enforce CSR activities as it closes the ties between community and organizations. Accordingly, through corporate social responsibility, the presence of firms in the social system is felt beyond the previously held belief that one can only benefit from the organization through employment Conclusion Having analyzed the theories and concepts associated with corporate social responsibility critically, one is left with no doubt that the essence of CSR is for a win-win situation. Businesses aim at gaining economic results while fulfilling the obligation as stipulated by the quadruple bottom line: profit people, philanthropy and planet. In effect, the paper has analyzed the theories related to CSR thus delineating the different perspectives of CSR as well as the business-case arguments of CSR. Lastly, the paper outlined the key findings based on the critical analysis of CSR. References Arlbjørn, J. S., Warming-Rasmussen, B., Liempd, D. V., & Mikkelsen, O. S. 2014. A European survey on corporate social responsibility. 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