Corporate Social Responsibility - Research Paper Example

Corporate Social Responsibility Introduction The business and society relationship has created a number of social, economic, environmental and ethical challenges since the rise of industrial activity (Carroll and Buchholtz, 2012). And this interaction has created stakeholders and their stakes in business and commercial activities (Coombs and Holladay, 2012). However, it will be nearly impossible to legislating CSR concerns as this act has a range of stakeholders relating to society and environment. Under the society label, there are a number of stakeholders, such as local community’s health, education, accommodation; employees, customers, creditors, suppliers, shareholders, investors, management, directors; and for the environment, legislation relating to green house gases, global warming, rise in temperature, carbon footprint, rising sea level (which is an effect of global warming), air pollution, water pollution and sea life and their protection. These are some highly controversial and challenging aspects relating to the CSR. Despite the presence of Kyoto Protocol, which was developed to reduce the green house gases for protecting and safeguarding the natural cycle and functioning of environment, international political leaders have failed to take concrete steps for reducing their part for damaging the global environment. Thereby, making legislation relating to CSR would be meaningless as enforcement will be the biggest challenge because many governments have become so weaker that they cannot go against the will of giant multinational firms working in many developing countries especially in Asia and Africa. Corporate Social Responsibility (CSR) “Corporate social responsibility (CSR) is defined as the ecological, social and ethical responsibilities of companies; it goes beyond legal requirements i.e. CSR activities are voluntary and depend on the company’s individual sense of responsibility” (Habisch et al, 2005, p. 116). Based on this definition, it can be deduced and elucidated that CSR reflects the interests of natural physical environment, stakeholders from society, such as nearby community, their health, education, accommodation, and other dimensions relating to their well-being, and ethical dimension is related to the stakeholders, such as employees, by providing them congenial workplace environment and extending their basic perks and benefits. In other words, CSR is not restricted to corporate activities instead is more concerned with the non-corporate activities that directly or indirectly affect others in the shape of green house gases emitted by mills, factories and other similar structures; air pollution, global warming, rise in regional and global temperature are some of the examples that represent the ecological aspect of CSR. While voluntarily complying with CSR, corporate firms integrate or take into account the concerns relating to environment and society in their routine business operations so that they behave in socially and environmentally responsible way (Holland, 2003). This explanation of CSR highlights that when firms carry out their business operations, they also consider the implications of their business activities for society and environment as well. For example, if a firm has the highest carbon footprint through emitting greenhouse gases into the environment in 2014, and in the subsequent year, if it plans to decrease the carbon footprint by 30 per cent in next two years, this type of business operation demonstrates that the firm takes into account the environmental concern and is behaving as environmentally responsible entity. In this regard, if the same firm builds a school for the local community without charging any coaching fee, this example also displays that the firm is behaving socially responsible way. For example, Pepsi has withdrawn its investment from Burma as more and more reports highlight gross human rights violation in the country is the example of CSR (Vogel, 2005). Managerial perspective Manager has to maintain a balance between the interests of different stakeholders (Freeman and Phillips, 2002). While working as a manager, it is a prime responsibility of the manager to know and understand the possible and probable expectations and interests of different stakeholders and after this comprehension, the manager will be in a position to ensure equilibrium between and among the concerns of different stakeholders. Within this context, it has been argued that even the use of stakeholder theory would be meaningless because it does not specify any method for maintaining a balance between the interests of different stakeholders (Donaldson, 2002). Furthermore, Waddock (2004) contends that there is little agreement on terminology relating to the interests of different stakeholders and their expectations especially within the framework of CSR. Moreover, it can be argued that quantification of stakeholders is a daunting aspect of CSR as this issue is highly subjective and situational as well; meaning different applications for different places and at different times. However, Welford (2004) says that at least 20 different stakeholders can be selected, having unequivocal interest in the daily business operations of firms. Based on the above description, it can be highlighted that there are various other challenges for the mangers while satisfying the requirements of CSR. First, it is not easy for the managers to identify the type of stakeholders who are directly or indirectly affected by the business operations. For example, if the main business operation is to assemble the different part of cell phones and sell the finished product in the market, it would be very challenging for the managers to identify the stakeholders who are directly affected by the disposal of used or expired cell phone parts as they are environmentally and socially very harmful for the society and different stakeholders. Within this context, it can also be deduced that identifying the affected stakeholders would become more impossible if the production facility is based in China and the disposal area is located in India. Even in this example, the managers would not be in a position to identify the real and true affected stakeholders. As a result, the corporate accountability and CSR would not be helpful and meaningful for entities. Furthermore, it has also been highlighted that the CSR attempt is nothing less than a camouflage as firms are unable to gauge the social and environmental effects of their corporate operations on society and environment (Turner, 2001). Individual perspective Different stakeholders have different expectations (Rosam and Peddle, 2004).Individually, the CSR is considerably meaningful for customers as they remain the most important stakeholders because they are the one who buy products from companies and provide them main source of business (Belal,2008); and most importantly, customers belong to the prime stakeholder group (Sims, 2003). . As a result, their stakes are the most important and must be considered by the entities. For example, if a fast food restaurant has unhygienic condition in their kitchen department and the company fails to maintain the hygiene and cooking standards, the direct implication would be that many routine customers would discontinue availing the food from the restaurant and they would switch to a new restaurant; indirectly many customers would become sick and their health expenditure would increase. Under this situation, it is highly essential that the restaurant should be held accountable for its irresponsible services for the customers. In this regard, it is important to highlight that an affected customer may sue the restaurant and recover charges incurred on health caused by consuming unhealthy food from the restaurant. However, even the CSR framework does not extend rights to customers for protecting their interests and rights instead the local laws, in the shape of consumer laws, will be useful for the customers as the CSR framework is voluntary in its nature and does not guarantee protection of rights of different stakeholders including the customers. Based on the above example, it can be deduced that the CSR framework has little use and meaning for the individuals. The basic foundations of CSR are not social in their context but they have been more related to the entities and they do not coerce the companies to fully take into account the concerns of customers instead they only belong to the entities; if they consider it appropriate, they would accommodate the concerns of stakeholders. In this regard, it is important to signify that companies are at their own will for attaching importance and adjusting the concerns of the important stakeholders. For example, even in the case of customers, the restaurant management are at their will whether to enforce hygiene standards; if the restaurant management considers that implementing such measures would increase their business cost, they may not use them instead some less effective and cheaper hygiene standards may be applied. Societal perspective Community is an important stakeholder (Idowu and Filho, 2009). And stakeholder is one who affects or is affected by the companies’ activities (Mullerat, 2010). Community living nearby a factory is an important stakeholder for the factory owners. Factories are normally built in rural areas. From these factories, different types of polluting agents are released in the form of toxic waste. The polluting agents include greenhouse gases, contaminated water, and waste material which is highly toxic in nature, are seriously harmful to the nearby community. And normally, it has been reported that overall health indicator of these areas are poor and residents face different types of skin and water borne diseases as well. Under this condition, it is highly essential for the factory management to look into this matter and take necessary measures to reduce the effects of pollution affecting people living nearby the factory. For example, for this purpose, the factory owners can provide a health care unit where the local residents are given free medical and health care services so that the effects of pollution on the local community are minimized. Furthermore, the factory management may develop the latest waste management strategy in which toxic waste and other types of polluting agents are disposed to any other location. Through this measure, the local residents will not be affected by the factory toxic waste. However, these measures can only be taken if the factory management consider it and understand its CSR obligations. In other words, these measures can only be done if the factory owners decide and wish to provide relief to the local residents otherwise they cannot be coerced to do so until a legal binding legislation requires to do so. From the societal perspective, CSR framework has always been welcome by the different stakeholders. This reception is mainly caused by the fact that many authors, pressure groups, customers, suppliers and community members contend that the firms have become an integral part of today’s society as they reap hefty amount of profit by selling their goods and services in market. As they earn more profit from society, they are required to prove that they are corporate citizens and should return back something to society by contributing in the shape of building education facility or health care units particularly for the affected stakeholders. Conclusion The CSR framework is less useful for a number of stakeholders. First, this framework has no legal support for enforcing its constituent parts. As a result, the firms will not be coerced to use them instead it is their will whether to enforce them in their letter and spirit. Under this condition, it will be very challenging to rely on the usefulness and efficacy of this framework. At the same time, for managers it is not easy to identify different stakeholders and their concerns as well. Similarly, even this process of identifying the interests of stakeholders is challenging as managers have no specific way to gauge the impact of their business operations on the different stakeholders. From the perspective of individual (customers), the CSR is little meaningful even for an individual customer as they are required to rely on the support of consumer laws for protecting its rights whereas in the CSR framework, the individual only expects that firms will comply with the CSR framework standards. And the same is relevant for the society as the community members cannot use the CSR framework for suing the companies. Consequently, if the factory owners provide a health care unit or academic facility, it will be on their will to do so. Code of Conduct Ethical values shape a code of conduct (Bibb, 2010). In this regard, morality plays the main role as it directly and indirectly affects beliefs which are applied by individual and society for identifying a difference between right and wrong attitudes and behaviours as well (Bibb, 2010). Keeping this view in mind, the following code of conduct has been developed and they are purely based on the personal experience in a firm. My experience in a multinational company was not positive. I worked in the human resource department in the capacity of human resource assistant to the human resource manager. There were 10 employees who were working in the human resource department. During this two year experience in this department, I observed that grouping was common in the department in which some employees were more connected with specific employees and consequently the entire department did not perform in the way it should have performed. Additionally, there was a race and professional jealousy among employees; intolerance and unethical and harsh behaviours were commonly observed in the department. In this regard, the role of human resource manager was the same as she preferred specific employees to others; it was this reason that had created strong difference and polarization in the department. In order to improve the department performance, it is highly essential that the following ethical and employment-related measures (code of conduct) should be understood and implemented. Avoidance of personal comment (gossiping) Gossiping is unethical and hence it should be avoided. While working in the department, gossiping was common especially in the lunch break time. Due to this activity, resentment, hate and intolerance were increasing and they were directly affecting work performance. Thereby, it is highly essential that the employees should avoid commenting on personal issues or personal matters instead more emphasis should be given to professional and employment matters as this would increase their employability and provide them a chance to understand their role and contribution to their respective role. Additionally, making personal comments does not earn respect and dignity instead they increase anger, intolerance, impatience and non-cooperation. And for employees working in the same department, such acts would create problem and discourage employees to interact and ask for required information which is useful for the routine human resource work. In a nutshell, gossiping must be avoided and only professional discussion should be encouraged. For this purpose, the role of human resource manager is a key as it is her prime responsibility to lead and guide subordinates for increasing their professional productivity. First, the human resource manger should change herself by not preferring some employees to others instead she should treat them equally and give due respect to all employees. As it has been observed that the employees follow the attitude of boss and try to imitate them, it is highly essential that this change should be started and led by the human resource manager. In that way, that change would be useful and effective to obtain the related objectives. Respect for gender and age diversity In the human resource department, one of the main reasons behind grouping was caused by the lack of respect for gender and age diversity. Young employees preferred to sit together and female workers were more comfortable with females. Consequently, this situation created substantial gap between employees. Discrimination is harmful for the workplace environment as it does not only create differences but also has negative effects on the overall performance of department. Thereby, it is highly essential that discrimination must not be tolerated and respect for diversity should be supported and encouraged as well. For example, if any discriminatory attitude is observed, disciplinary action should be taken against them so as to set some examples in the department. Additionally, some workshops or seminars can also be arranged for increasing understanding and respect for gender diversity and its usefulness for the overall performance of the department. Respect for gender diversity can also be maintained through informal gatherings. In these gatherings, some fun type activities can be conducted so that the employees interact with their colleagues in an informal way. In this regard, the role of human resource manager is of crucial importance as she has to note down progress of individual and collective attitudes of employees. If the progress reflects that the employees are avoiding disrespectful ways and preferring to use appropriate terms and language while interacting with their colleagues, this would reflect that current strategies are working and achieving their objectives. Behaving ethically with higher professional conduct Ethical behaviour should be associated with higher professional performance. This link should be established and its significance should be realised by all employees working in the department. For this objective, the human resource manager, again, has to lead the employees by saying and practically proving the worth of this strategy. For example, the human resource manager has to develop a two-prone strategy in which the objective of ethical behaviour with higher professional performance should be attached. For this objective, effective ethical leadership programme should be started by hiring the services of a professional firm providing and conducting ethical leadership programme training and development sessions. In this measure, the focus will be to provide the basic ethics concepts and their application and relationship with the workplace professional performance. The training session drills should be attended by all employees under the supervision of the human resource manager and the progress report should be regularly updated. Second, the human resource manager should personally interact with employees. In this interaction, the manager should try to ascertain whether the employees are gaining and applying the knowledge relating to effective ethical leadership. And if there are issues, they must be resolved timely and professionally as well. Furthermore, the manager should quote personal examples relating to the interplay between ethics and work performance. At the same time, the examples of Enron and other mega corporate scandals must also be shared with them. Through this information, the employees would become in a position to understand the cost of unethical behaviour and unethical corporate activity if they are carried out on a mega scale level. In addition, it is also important that regular behavioural training programmes should be held. Normally, it has been experienced that infrequent behavioural training programmes do not attain the long term objectives instead all investment and expenditure become meaningless because inconsistency in such programmes do not bring the needed change in the behaviour of employees. Keeping this view in mind, it is highly essential that the human resource manager should inform and discuss this issue with the senior management of the company and ensure that a regular such training programmes are conducted. In addition, many firms avoid such expenditure as they consider them expensive and less effective as well. In order to remove this misconception, it is the responsibility of the human resource manager to convince the senior management about the usefulness and efficacy of such programs. For this, the human resource manager should highlight the need for the human resource department and its positive effect on the overall performance of the employees working in the department as well. Conclusion Gossiping should be discouraged. All employees should avoid gossiping especially during the lunch break time and personal comments or personal issues should not be discussed during that time instead more focus should be given to the organizational issues as it will increase their productivity and performance as well. For attaining this objective, it is the prime responsibility of the human resource manager to lead the subordinates by initiating this step; simultaneously, the human resource manager should discourage this activity (gossiping) as well. Furthermore, it has been observed that subordinates follow or imitate their boss; consequently, actions and behaviours of the human resource manager will put considerable effect on the employees. At the same time, respect for age diversity and gender should be visible. Discrimination based on gender, sex and age should be discouraged and diversity and respect for gender and sex should be promoted. In order to effectively control the discriminatory attitude, behaviour and action, the policy of disciplinary action should be introduced and implemented as well. Also, respect for gender diversity can be improved through informal gatherings and fun type activities can further solidify their interaction and relationship as well. As the human resource manager is required to supervise them, it is highly important that progress on these important issues should be noted down; and if the progress highlights that employees are freely interacting with all others and they refrain from uttering personal comments. In that case, the human resource manager should encourage such attitudes. Additionally, ethical behaviour improves professional performance and there is a strong connection between ethical behaviour and professional performance. For improving their ethical behaviour, training and development programmes should be conducted and it is the responsibility of the human resource manager to personally interact with the employees for highlighting the importance of ethical behaviour besides leading them through personally acting upon the concept of effective ethical leadership. References Belal, A.R. (2008). Corporate Social Responsibility Reporting in Developing Countries: The Case of Bangladesh. 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(2004) ‘Corporate social responsibility in Europe and Asia: critical elements and best practice’, Special Issue on Corporate Social Responsibility in Asia, Journal of Corporate Citizenship 13: 31–47 Read More