Development of CSR - Essay Example

Development of CSR

Corporate social responsibility abbreviated as CSR can be defined as operating a business in a way that accounts for the social and environmental effect that the business creates. It is the dedication and obligation to come up with policies that incorporate responsible practices into day to day running of a business and reporting the improvement made toward putting into action such practices (International institute for sustainable development, 2013). Studies reveal that CSR definitions may be different; however, they always have common principles. For instance, a definition by European Commission may accentuate environmental concerns whereas a definition by the World Bank encompasses economic sustainability without giving attention to environmental concerns (Government of Hong Kong, 2013). Nonetheless, the two CSR definitions share the common notion that organizations or firms have the duty for the welfare of the public. CSR supports a vision of business accountability to various stakeholders other than shareholders and investors. The main areas of interest of CSR include environmental protection and the welfare of employees, the general community and civil society both presently and in the future. The CSR concept is promoted by the notion that businesses do not have to act as separate economic units that function in detachment from the wider society (Government of Hong Kong, 2013). As a matter of fact, the tradition perceptions on competitiveness, survival and profitability have changed.

The genesis of CRS can be dated back as to when people begun firms and employing labor. The present day meaning of corporate social responsibility originates from 1970s when the theories of Archie B. Carrols have been prominent (International institute for sustainable development, 2013). Carroll classified corporate social responsibility into four parts of responsibility namely; economics, ethical, discretionary and legal. A business entity was supposed to fulfill all the four responsibilities for it to be said to have conformed to corporate social responsibility. As per Carroll economic responsibility was mandatory and a basic foundation by arguing that a business entity is the primary economic unit of any society. Because companies are also required to abide by the rules of social contract, the legal responsibility is also seen as mandatory (Government of Hong Kong, 2013). Ethical responsibility is socially anticipated whereas philanthropy is collectively desirable. Environmental concerns or aspects of sustainable development were not integrated at that point of CSR (Government of Hong Kong, 2013).

The concept of environmental responsibility and sustainability steadily become incorporated into the corporate social responsibility theory as the attention of environmental concerns emerged, with the consequence of shifting focus on sustainable development in the subject. Presently, the corporate social responsibility concept is included in sustainable development to the level that it encompasses the similar three cornerstones as sustainable development (Government of Hong Kong, 2013). These include the environmental, social and the economical which today have equal significance for corporate social responsibility (International institute for sustainable development, 2013). In the contemporary business environment, business entities are learning to capitalize on public signals and take advantage of the competitive edges that arise from assuming more responsibility as a firm.

DRIVERS of effective CSR

There are many drivers for effective corporate social responsibility. For simplicity purposes, these drivers are grouped into internal drivers and external drivers (International institute for sustainable development, 2013). External factors encompass the social-economic and social-political factors that affect a business entity. The expectations of a society and political is one external pressures. Laws and regulations and the firm’s national origin influence entities to establish their CRS via environmental laws for instance. Additionally, the development of corporate social responsibility can also be affected by the consumers and customers in the sense that they can exert pressure on the way firms produce goods and services they buy (Government of Hong Kong, 2013). They also influence CSR in selecting the services and goods to be produced.

The internal drivers entail the traditions and values because the national origin becomes a factor because business entities from the same nations have particular business style (International institute for sustainable development, 2013). In addition, these drivers can emerge from top to bottom or vice versa. These drivers can also emerge from the middle and flow upwards the management ladder. Moreover, the reputation and image are imperative internal supporters for corporate social responsibility. Strategic and competitive forces are also important. The reason for their significance is that a good CSR is always anticipated by the national and international community (Government of Hong Kong, 2013). Thus, business entities are affected by both the interests of the government and the people and often opt to promote or invest in the society. As an illustration, the IBM contribution by establishing a non-profitable computer tools can be used by volunteers across the globe (IBM, n.d.). The founding goal and time is also instrumental factor which implies that a firm can skip some development stages if it was established at the beginning with tenets of CSR (Government of Hong Kong, 2013).

Barriers to CSR

Barriers to effective CSR consist of the cost-benefit ratio and the external and internal control (International institute for sustainable development, 2013). Cost-benefit ratio happens when business entities fail to have the financial resources for the development of corporate social responsibility. It can also arise when there exist trade-offs between profit and ethical alternatives and actions. The outcome is always the profit maximization. Moreover, the reason for modern businesses is to generate wealth to its shareholders (International institute for sustainable development, 2013).

Corporate policies are also influenced by stakeholders at the same time via their demand for products manufactured by the firms who think about or do not think about corporate social responsibility. The external control barriers implies that a firm is not on a position to monitor the market environment or do not have the correct knowledge for incorporating corporate social responsibility (International institute for sustainable development, 2013). On the other hand, the barriers to the internal control imply that there is lack of robust leadership and management within the firm to incorporate corporate social responsibility.

Transparency

Today businesses are appreciating a more sustainable approach in their operations. This approach is one that takes into consideration the societal, ethical, economical and environmental influence of their activities. Through considering such accountability in their policies, businesses implement new ways of sourcing, producing and distributing goods in a more sustainable way, usually simultaneously reducing the costs. And on the basis of a more transparent and proactive involvement with human resources, consumers and the societies in which they operate, businesses are becoming well equipped to make products and services for a better world.

The success of apple is partially because of its ability of satisfy stakeholders and CSR (Dudovskiy, 2016). The stakeholders groups enforce demands that interpret the CSRs which have an impact on the company’s performance (Government of Hong Kong, 2013). The stakeholders considerably impact the customers view and profits of the company. Looking at its persistent high brand value, the company effectively put into considerations the stakeholders in its policies and strategies. On such instance is that Apple tackles the environmental concerns of the stakeholders via its policy of sustainable material sourcing (Werth, 2014). The company has strong and holistic approach in dealing with stakeholder groups’ interest to the business (Werth, 2014). The stockholder groups thus pressurize the company to get better and influence them in gratifying their interests.

In the case of the Apple, the most important stakeholders are customers, the company employees’ investors and the employees of suppliers and distributors (Dudovskiy, 2016). The company put their employees as their important stakeholders in coming up with CSR strategies (Werth, 2014). The key customers’ interest is to have efficient products that are priced reasonably. The second most important stakeholders of the Apple in its approach to CSR are their employees. The major interest of its employees is proper compensation and career advancement. These stakeholders are second in priority because of their significance in directly determining the capabilities of its human resource to innovated profitable products. Investors are third in priority in the establishment of its CSR strategies. The firm effectively handles the interest of the investors via an excellent financial performance. Employees of suppliers and distributors also very important considerations in Apple CSR efforts and their interest is same as that of its own workforce (International institute for sustainable development, 2013).

IBM considers that an organization culture that is grounded on core values is helpful in a business in describing the function that it ought to play in the society (Pohle & Hittner,  2008). The company points out and act upon any emerging opportunities to use its technology and expertise to solve the problem of the society it operates. It believes in scaling its existing program and initiatives to accomplish its full potential and benefit. The company also empowers its workforce and others in order to help them serve their communities better and even improve them. IBM also aims to integrate corporate citizenship and social responsibility into all the aspects of the company (IBM, n.d.).

The company has established a considerate and wide-ranging approach to corporate citizenship that it thinks it is in line with the company values and also maximizes the influence it can make as an international business. It is also committed and dedicated to the environmental leadership in its entire business activities. IBM has an international environmental management system that guarantees it’s observant in protecting the environment in all the areas it operates.

IBM has a strategic and business planning in its operations and that ensures its staff well-being is integrated in all the companies aspects across the world (Pohle & Hittner, 2008). The company also spends over US$ 36 billion annually with its international suppliers (IBM, n.d.). The huge expenditure shows that IBM is dedicated to holding itself as well as its suppliers to high standards in all its business transactions. What is more, the company also pursues the highest standards of social responsibility across all its businesses. This standard ranges from the support and empowerment of its staffs to the way it works with its customers and run its operations (International institute for sustainable development, 2013).

CSR and jobs

A job at management level can help to demonstrate CSR at the personal level. As a manager one can gain insights and knowledge on the way corporate benefits from corporate social responsibility. One of such benefits is the better public image. It is obvious that companies that demonstrate their dedication to CSR are viewed as generous and caring. The public image of a company relies on its social responsibilities initiative and the how the consumers are aware of them. a company can boost its public image through promoting non-profits via monetary donations and volunteerism. Secondly, CSR promotes the involvement of the employees. A company with a good public image attracts employees to work for it and usually tend to proud to associate with such a company. Thirdly, a company that engages in CSR activities attracts and retains investors (Government of Hong Kong, 2013). Investors tend to hugely invest in firms that ensure that are transparent in using their funds.

A CSR is also beneficial to employees. One benefit is that it helps them to have a positive workplace environment. When a business entity exhibit acts of philanthropist, it may likely to offer the staff with a positive workplace. As a result, they feel involved and productive when go to work every day. Other importances of the CSR to employees include improved creativity, promotion of professional and personal growth as well as promoting individual philanthropy among others.