Perspectives on Corporate Social Responsibility - Coursework Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2015 Recent years has witnessed a heightened/increased corporate attention to corporate social responsibility. As Porter and Kramer, (2006) highlights, this unprecedented increase in corporate attention to CSR developed following an increasing public reaction to various issues that organizations had not earlier considered as part of their corporate responsibilities. Consequently, a growing number of organizations woke up to the reality that sustainable corporate profit does not only come from the constant pursuit or chase for financial gain. Instead, shareholder value and sustainable growth is best achieved by working through a broad framework of not only social, ethical, environmental and economic values, but by also working through shared objectives that entail endless interaction between organizations and their respective stakeholders. Given this, CSR has acquired exceptional momentum not only in business, but also in public discourse, as a result, making it a strategic issue spanning discipline boundaries as well as influencing the manner in which organizations conduct business. According to Podnar (2008), since its emergence, CSR has become so significant such that many organizations have had to rebrand their core values to integrate social responsibility. In fact, nearly all company policies and websites exhibit endavours for CSR as a means of confirming that the organization is indeed justifying all its obligations towards the society and therefore entitled to an operation license. Increasingly, many organizations mention their CSR activities as fulfilling q quadruple bottom line consisting of profits, people, planet and philanthropy. Alternatively, the CSR practice has been put through a significant debate and criticism. Whereas some its proponents claim a strong business case for it, in that organizations gain in numerous ways by working within a perspective that is broader than just acquiring short term profits, other proponents claim that fulfilling the quadruple bottom line is actually a moral responsibility that organizations are compelled to uphold. On the other hand, while some Critics contend that CSR diverts us from the ultimate economic responsibility of businesses, others claim that CSR is simply a shallow window-dressing as well as a mere effort to obstruct governments’ role of watchdog over the influential multinational firms. It is within this backdrop therefore that this paper will discuss as well as critically analyze the various perspectives on CSR outlined above and discussed in academic literature. This paper is in favor of this Perspective:”CSR is a key element of the current business organizations.” As highlighted above, there have been significant discussions as regards what specifically drives business organizations (capitalist enterprises) to concentrate on business ethics as well as giving back to the society even without minimum legal requirements. According to Jamali and Sidani (2008), there are fundamentally two widespread theoretical perspectives to understand CSR given this particular question. One of the perspective raised by many proponents of the CSR practice is that fulfilling the quadruple bottom line is actually a moral responsibility that organizations are compelled to uphold. With issues such as climate change, regulatory pressures as well as societal calls for greater social and environmental responsibility increasing, there is no doubt that realizing the quadruple bottom line has actually become a moral responsibility that organizations are required to uphold (McWilliams, Siegel & Wright, 2006). Indeed, CSR aspects, including environmental stewardship, workplace responsibility protection of human rights, and noble corporate citizenship, have progressively become part of a business organization’s social legality. Given this, corporate social responsibility has today become a major focus for a large number of organizations. As Cohen, Taylor & Muller-Camen (2012) highlights, CSR has now spread not only in all the aspects of carrying out business but has also been entrenched across all the levels of today’s business organizations, as a consequence, becoming a continuous change process. Consequently, for employers, this focus has meant a distinct way of carrying out business. This is because, besides the economic deliberations of organizational growth and profit-making, organizations are today significantly held responsible for their effect on not only the environment, but the society as well (Simon, Powers & Gunnemann, 1972). Moreover, they are compelled to consider the social as well as environmental risks and benefits while carrying out all their business decisions. In general therefore, Newella and Frynasb (2006) highlights that other than the traditional perspective of the responsibility of a business as acquiring financial gain for the owner (profit-making), the forces of economic globalization are compelling business organizations to increase their scope so as to not only shape but also affect the societies where they are operating in .Given this; CSR has turned out to be a matter of stakeholder identification, involvement and communication. Prieto-Carrón et.al (2006) actually reiterates that this is profoundly a pro-business perception of CSR, as capitalism is considered redeemable only through a concern with ethical conduct. On the other hand, contrary to the above highlighted perspective of CSR, Crouch and Mclean (2011) contend that CSR is actually diverting individuals from the most essential economic responsibility of doing business, which is to make or obtain long term financial benefit for business owners through the delivery of goods or services. In his explanation, Friedman (1970) argues that business managers have a moral duty to act always in the best interest of shareholders, and that he is not in any way against the idea of business organizations involving themselves in activities that enhance social welfare. In fact, he asserts that free market capitalism itself enhances social welfare. He as well observes that business organizations will unquestionably involve themselves in activities aimed at enhancing social welfare, however, according to Friedman (1970), the major motivation for engaging in business ought to remain the long term increase in the shareholder wealth.Alternatively,Crouch and Mclean (2011), in their contention, criticizes those promoting CSR, for what they term simply as a lack of a comprehension that a business can only be a business since that is its business objective. As a consequence, Crouch and Mclean (2011) raises a concern that CSR basically complicates and conflates what a business ought to do. They thus rebuke CSR proponents for failing to acknowledge that the structure of a large number of business establishments is not corporate in form, but vast majority are mainly small businesses, often family-owned. The second perspective, which is a business perspective, argues that CSR has a significantly strong business case or justification capable of improving the competitiveness of a business organization by working within a perspective that is broader than just obtaining short-term profits. As highlighted by Wheeler Colbert and Freeman (2003), empirical research, both quantitative and qualitative has, in the past decade, produced substantiation of measurable payoff relating to CSR initiatives to not only business organizations but their stakeholders as well. According to Weber (2008), Qualitative empirical research relating to this subject mainly employs best practice cases to explore the impact of CSR on organization competitiveness. For instance, Argenti (2004) showed an exhaustive case of Starbuck’s partnership with a number of NGOs drawing experiences of positive business-NGOs collaborations. Similarly, Rondinelli and London (2002) depicted a number of cases from business practice to back their research of gains accrued from cross-sectorial environmental partnerships. Weber (2008), however, highlights that even though a great number of the investigations do not unequivocally concentrate on the business justification for CSR, they more often than not offer important insights regarding CSR gains. In the long run this means a positive correlation between the CSR contributions of a business organization and its financial accomplishment, a factor that actually indicates that there is indeed a business rationale for CSR. Alternatively; business organizations have diverse motivations for paying much attention to CSR. Among the likely bottom-line gains include: Revenue Growths Arising from Higher Sales and Enhanced Market Share: Often, scholars contend that the practice of CSR can result into revenue growths, indirectly realized through a business organization enhanced image, or directly through a CSR-driven market/product development. Positive Effects on Worker Motivation, Retention, and Staffing: As Weber (2008) highlights, effects within this particular area arise from an enhanced reputation. It is argued that CSR is capable of directly influencing workers as they tend to be significantly motivated working within a healthier working environment, or acquire motivation from taking part in CSR initiatives, including volunteering programs.Alternatively,CSR initiatives can either directly or indirectly impact a business organization’s attractiveness for prospective employees. Cost Savings: According to Markus and Shimshack (2012), cost savings has been widely explored within sustainability research. According to a large number of these researches, efficiency benefits could stem from enhanced contacts with particular stakeholders, for instance, regulators leading to time savings, or enhanced access to capital owing to the higher sensitivity of stakeholders to issues relating to sustainability. CSR-related Risk Reduction: As highlighted by Schreck (2009), CSR can as well as be employed as a way of reducing or managing CSR-related risks, including the evasion of undesirable press or customer boycotts. Positive Bearings on the Organization’s Image and Repute: According to Weber (2008), empirical studies reveal that the image and repute of a business organization may significantly influence its competitiveness.Weber (2008) reiterates that this is because image embodies the mental picture of an organization held by its customers, and which is shaped by the communication messages. Alternatively, a business organization’s reputation develops based on individual experiences and entails a value outlook by a business organization’s stakeholders. On the other hand, despite the CSR doctrine now enjoying widespread support, Henderson (2001) and Bara (2010) have put it through fundamental criticisms. Henderson (2001) and Bara (2010) argue that, unlike CSR being harmless; it is an ill-advised virtue with significant false notions. Its doctrines generally overlook development/growth economics; as a result, its adoption not only threatens prosperity and reduces competition but also undermines the market economy within the well-endowed and poor nations. Indeed, Henderson (2001) and Bara (2010)’s two major protestations are that the depiction of a bad corporate world is being distorted and that the approval of CSR increases business costs (expenditures) which in turn impacts consumers, as a result, making individuals poorer. Also critical of business perspective of CSR is Hanlon and Fleming (2009) who considers the above perspective of CSR of a strong business case or justification capable of improving the competitiveness of a business organization by working within a perspective that is broader than just obtaining short-term profits, as a mere public relations/publicity stunt or an illustrative of some contemptuous self-interests, which is very different from a serious concern with ethical as well as political effects of capitalism. Hanlon and Fleming (2009) actually point out the Dow Jones Sustainability Index that showcases the globe’s most ethical business organizations as a cause for cynicism, arguing that an individual only contrasts the real actions in contradiction of the CSR policies of companies such as Shell and the British American Tobacco (B.A.T), and their assumed commitment to consumer health and the environment to prove this viewpoint. In support of the above point, Mullerat and Brennan (2010) highlight that there is actually a great deal of hypocrisy or insincerity with regards to the CSR practices among many business organizations, as a result, questioning what the major motivation behind the practice. According to Mullerat and Brennan (2010) many perceive the CSR practice as a smoke-screen behind which a number of anti-social practices carry on. Mullerat & Brennan (2010) actually contends further that is a common practice for many company websites to display their CSR undertakings when in reality there is a lot of lip service given to the CSR practice than the actual practice. A recent investigation conducted by the United Nations Institute of Public Research, for example, revealed that only four out of ten multinational firms have a board member with evident interest in social issues (Epstein & Hanson, 2006). Moreover, during a World Economic Forum held in Switzerland in 2004, of the total 1500 envoys, mostly business leaders, only a small percentage were found to be placing CSR in as far as assessing the corporate success is concerned. Given this, Idowu and Filho (2009) echo that any prolonged examination of CSR ought to appreciate the observation that CSR is definitely a form of a capitalist ideology aimed at pulling the wool from individual’s eyes. Conclusion The above analysis has generally provided an extended critical analysis on the perspective of CSR.As it seems, the CSR practice may well have become part our vocabulary; however, it seems to have not taken root into our understanding. On the other hand, whereas the criticism that the CSR practice diverts us from the ultimate economic responsibility of businesses as well as it being simply a shallow window-dressing and mere effort to obstruct governments’ role of watchdog over the influential multinational firms, I believe that CSR is a significant element of the neo-liberalism that is still seeking legitimacy and improvement. As such, rather than being perceived as a scheme, CSR ought to be seen as one of the practices that companies are using as they aspire to alter the nature of social regulation away from a shared to more personal solutions. Alternatively, what I would propose is the requirement for the adoption of a code of conduct that would direct how CSR is undertaken by organizations. This conduct of conduct will help ensure not just a loyalty level across their operations, but also ensure some degree of authenticity within their external environment. References Argenti, P. A. 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