Corporate Social Responsibility Issues - Assignment Example

Institution Corporate social responsibility By Name: Instructor: Date: Course: Introduction Corporate social responsibility (CSR) is a major talking point in the current global trends and settings. Numerous parties hold equally diverse opinions about the presence, impact and role of CSR for all the concerned parties. These parties include the society, the business entities, the government and the environment at large (Arnold et al, 2013, 338). The diverse opinions fall categorically into six different groups that this essay critically analyses before passing on a verdict on the findings of the review of the academic sources used therein. PART I THE CASE FOR CORPORATE SOCIAL RESPONSIBILTY The case for corporate social responsibility There is little doubt as to whether CSR plays any direct role in influencing the community around any business entity. Most critics take up oppositions on the argument for and against CSR based on how a company is set up and how SCR affects its bottom line (Horrigan, B. 2010, 16). Those in argument for the case of CSR state several key points that further support their argument. These points include impact on employee performance, building brand identity and finally the impact on the quadruple bottom line. The quadruple bottom line includes Profits, Philanthropy, People and the Planet as a whole (Ángeles et al, 2007, 381). The three key points are not conclusive points for the argument for CSR but they cover major ground in the case. For most major companies in the current time, their profitability relies on a plethora of factors that includes employee performance. Employees have a conscious and as such they have a need to feel that they have a positive impact on their environment, this is clearly illustrated by McClelland’s three factor theory (Casey & Grenier, 2015, 101). Employees who work at business firms like Google have a sense of pride in their position due to the massive output that Google records in terms of giving back to the community. The output produces tangible evidence of their influence on their environment through the company’s actions (Lagan, & Moran, 2006, 98). The same point could also be argued for brand quality for the same tech-giant company. As an indirect result of building the brand through CSR, Google enjoys low employee turnover although this is not the sole reason for those low rates (Chung & SCULLION, 2013, 23). Currently, most companies strive to achieve the requirements for the quadruple bottom line in order to make business sense of their efforts (CHERNEV & BLAIR, 2015, 1418). Every business endeavors to make profit through the efforts of its resources, this conclusively includes Human resource. The business also strives to satisfy the philanthropic requirements as well as its responsibility to the environment and ultimately to the entire planet (Blowfield & Murray, 2008, 108). PART II AFFIRMATIVE RESPONSIBILITY TO CONCERNED PARTIES Are organizations obligated to honor the quadruple bottom-line? Business exists in a specific environment and it would be ignorant to claim that it does not have an impact on the surrounding environment including the community. For instance, a manufacturing business that owns a nearby production plant ultimately must produce by products during its production process. If the business ignores CSR and proceeds to dump the waste and by products haphazardly then soon enough the environment would become inhabitable for both the locals and the company employees (García-Rodríguez et al, 2013, 379). Whilst pursuing profit making by utilizing natural resources, a business must acknowledge that it exists in an environment thus making it responsible for that very same environment. This is not only because the constitution stipulates so but because the moral requirements demand such actions this is in reference to Kew Garden Principles. The principle bases of five factors that range from extreme need, proximity, capacity, won’t suffer undue loss and finally no one else will act. (Branny & Nwagbaraocha, 2014, 67). From the five principles, one is able to deduce why a business must act in the matter stipulated under ethical CSR regulations. Some critics argue that business has no obligation whatsoever to be socially responsible since it goes against the core concept of profit making (Williams, 2014, 18). This group of thought enjoys the backing of leading individuals like Milton Friedman who argue that a business’s exist for the sole purpose of making profit. To this group, CSR is a foreign concept that goes against the business principle by incurring costs of CSR which do not directly contribute to profit making (Sharp Paine, 2003, 292). PART III PHILANTHRPIC AFFIRMATIVE DUTY TO SOCIETY The purpose of business beyond profits Ideally, a business should be able to cover its costs of operation and production comfortably in order to avoid bankruptcy. This is what most critics and stakeholders term as sustainability whether in the long run or the short term (Fifka, & Berg, 2014, 177). However, a business is not superficially limited to its profit making faucet instead it interacts with its environment in almost every possible level of operation. The employees (both permanent and temporary), the administrative executives, the consumers and other stakeholders make up part of a synergy system that interacts to conjure an optimal environment for profit making. This makes it almost impossible to conclusively rule out the purpose of business beyond its primary role profit making (Grobler et al, 2013, 127). A business is likely to get involved in the life of its employees or the environment directly or indirectly. It may do that through employee welfare initiative or any of the numerous consumer related platforms. One needs not to look further than the presence of the Human resources department and the sale and/or marketing departments in various organizations (Richardson, 2012, 107). These departments seek to maximize profit in the long run by taking care of the short term concerns such as employee welfare and customer satisfaction with the business’s final product. With respect to profit making, the business goes several steps forward by venturing into its immediate environment thus the above mentioned endeavors. Direct Involvement with human life necessitates factoring moral considerations into every decision that the business makes. This aspect that involves business without an immediate motive for profit making is what constitutes the purpose of business removed from the singular limitations or profit and loss (Siyaranamual, 2009, 81). Profit making organization must therefore act in the best interest of themselves as well as their surrounding even if they do not stand to benefit. Simply put, corporate social responsibility is a low financial rewarding undertaking that has a higher reward in terms of employee performance and brand name (Brown-Liburd & Zamora, 2015, 84). classic economist like Adam smith argue that an “invisible hand” would regulate the market conditions created by business through each entity acting out of their own self interest. This concept takes into assumption several factors that might not necessarily behave as expected. This necessitates affirmative action by business in order to rectify the situation and this is where CSR comes in (Blomgren, 2011, 504). Is CSR a tool to ward off the government attention from powerful multinational corporations? Some critics also express concern over how far that theory could support diverting the government attentions from the matters at hand. Essentially CSR could represent a breakdown in relationship between the public and a business entity (Glavas & Kelley, 2014, 188). The rules and regulations contained in the CSR dictate a certain reaction from the corporation to distrust by the public hence the call for regulation. Some companies utilizes the CSR concept to stay out of trouble but in real sense if the regulations were absent they would never support the costs associated CSR. Some companies have recently taken the initiative to lobbying against the regulations set forth by CSR by arguing that it acts as stumbling blocks for the performance of those specific companies (Ojo, 2011, 147). The companies purporting that the regulations be loosened or struck off completely are making counterproductive argument. Their action raises curiosity why a company that is supposedly CSR compliant is against this rule. That line of action only points out that the companies are hiding behind their false allegiance to the CSR rule (Polishchuk, 2009, 83). One of the key concerns of business is to cut down cost, by providing an extra consistent path for use of capital CSR breaks this code. CSR revolves around a business releasing funds for operations that are not directly related to profit making. By making charitable contributions to society as part of CSR the business supports inflation through the extra funds in the market. On an economic sense this move is counterproductive since it seeks to improve the living standards of the environment and the community. Instead this move ends up providing extra monetary rations into the economy that provides conditions for inflations (Škare & Golja, 2014, 571). PART IV The case against CSR involvement The fundamental economic role of business hinges on profit-making and the activities that accompany it, as earlier mentioned in this essay. These activities collectively determine the path taken by the economy in terms of growth and development. Corporate social responsibility plays a major role in determining the decision making of most business entities that seek to adhere to government legislation or respecting ethical limitations (Aupperle et al, 1985, 460). A certain section of critics believe that the presence of CSR regulation has a negative impact on the economy by supposedly modifying the primary economic role business in order to accommodate social concept. They argue that business cannot operate on two fronts and maintain the same profitable outcome that stakeholders expect from it (Lech, 2013, 59). The basic law that relates CSR and public relation is that “CSR sells” thus presenting an avenue for business to market itself and its products directly to consumers (Mohtsham & Arshad, 2012, 222). It is no secret that CSR helps a company or business to build a brand identity by endearing the organization to the immunity and the rest f the planet at large for multinational entities. The companies use this opportunity to connect with their target market by building a rapport with the consumers. The consumers are duped into believing that the company actually cares about the wellbeing of its employees, the conservation of the environment or the respect of basic human rights. All the events taking place are specifically choreographed and tailored to ensnare the customers’ loyalty to the organization’s products (Paine, 2003, 172). In some cases the company sinks to the low level of promoting a concept that it does not identify with but as long as the sales revenue increases then the end justifies the means (Steurer, 2010, 68). A case in point is that of Nike in 2002 where the Supreme Court ruled that Nike did not have sufficient grounds to lie in self defense against criticism. The company invoked the first amendment which “supposedly’ allowed it to have freedom of speech but the court overruled their stance, all this took place because the company sought to cover up the accusations made by an activist who sued the company for mislead the public through PR campaigns (Tyagi, & Vasiljevienė,2013, 381). Another section of critics believes that CSR offers more ammunition for those factors seeking to derail business output. Typically a business faces several factors that they must overcome in order to remain productive. These factors include competition, cost of production, employee welfare and customer satisfaction. When one takes into account Corporate Responsibility then this automatically means that business has to overcome one more hurdle that represents a rise in expenditure. This leads one to question the validity of CSR in an economic sense (Wei-Kang et al, 2014, 589). Conclusion In light of the numerous arguments for and against the presence of CSR in the business community a section of critics wonder if the CSR is a superficial window dressing. Could it be that the whole concept is just a good cover up for the machinations that take place behind scenes? There are several instances that seem to suggest that the concept of CSR is no more than a well-kept façade for the business to please the public (Peloza, 2012, 64). One could easily argue that CSR is a genius publicity stunt that has worked well over time in the public relations sense. There is one case that proves this theory is capable of holding some semblance of truth to it, that case entails CSR being a tool for public relations (Prahalad & Porter 2003, 125). That line of thought begs the question is business obligated to fulfill any responsibilities to the community barring any legislature that compels it to do so? Basically this group argues against the concept of CSR on the basis of increasing costs of sustainability of any business (CRANE & MATTEN, 2010, 122). The concept of undertaking a business endeavor is to maximize profit whilst minimizing the costs of operation and sustainability. From a business point of view, fulfilling the conditions of CSR is an obsolete endeavor that only increases costs while producing no tangible contribution towards the rates of return (Jackson & Nelson, 2004, 140). In retrospective view, Corporate Responsibility is an integral part of business that should not be discarded so easily. The fact that some business organization are against the presence of CSR means that in its absence they would run roughshod and deplete the communities at their location without an ounce of reference to the moral high ground (Górny, 2014, 53). Each critic has a solid reason to back their own claims in the discussion. From the above discussed topics, it is evident that CSR is not a complete system; it still has major changes to incur before producing the results that suits every concerned party. Corporations need to realize that their existence and operation directly depends on the ecosystem and as such they are equally responsible to the planet and the community at large (Rangan et al, 2015, 46). Bibliography Ángeles Gil Estallo, M, Giner de-la Fuente, F, & Gríful-Miquela, C 2007, 'The Importance of Corporate Social Responsibility and Its Limits', International Advances In Economic Research, 13, 3, pp. 379-388, Business Source Premier. Arnold, D.G., Beauchamp, R.T., & Bowie, N.E. 2013. Ethical Theory and Business (9th ed.). Pearson: Upper Saddle River, New Jersey. Aupperle, K, Carroll, A, & Hatfield, J 1985, 'AN EMPIRICAL EXAMINATION OF THE RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY AND PROFITABILITY', Academy Of Management Journal, 28, 2, pp. 446-463. Blomgren, A 2011, 'Is the CSR Craze Good for Society? The Welfare Economic Approach to Corporate Social Responsibility', Review Of Social Economy, 69, 4, pp. 495-515. Blowfield, M. & Murray A. 2008. Corporate Responsibility A Critical Introduction. Oxford: Oxford, UK. Branny, K, & Nwagbaraocha, J 2014, 'HOW ARE YOU TREATING YOUR EMPLOYEES, YOUR NEIGHBORS AND MOTHER EARTH', EHS Today, 7, 9, pp. 63-68. Brown-Liburd, H, & Zamora, V 2015, 'The Role of Corporate Social Responsibility (CSR) Assurance in Investors' Judgments When Managerial Pay is Explicitly Tied to CSR Performance', Auditing: A Journal of Practice & Theory, 34, 1, pp. 75-96. Casey, R, & Grenier, J 2015, 'Understanding and Contributing to the Enigma of Corporate Social Responsibility (CSR) Assurance in the United States', Auditing: A Journal of Practice & Theory, 34, 1, pp. 97-130. CHERNEV, A, & BLAIR, S 2015, 'Doing Well by Doing Good: The Benevolent Halo of Corporate Social Responsibility', Journal Of Consumer Research, 41, 6, pp. 1412-1425. Chung Hee, K, & SCULLION, H 2013, 'The effect of Corporate Social Responsibility (CSR) on employee motivation: A cross-national study', Poznan University of Economics Review, 13, 2, pp. 5-30. CRANE, A., & MATTEN, D. (2010). Business ethics: managing corporate citizenship and sustainability in the age of globalization. Oxford, Oxford University Press. Fifka, M, & Berg, N 2014, 'Managing Corporate Social Responsibility For The Sake of Business and Society', Corporate Social Responsibility & Environmental Management, September. García-Rodríguez, F, García-Rodríguez, J, Castilla-Gutiérrez, C, & Major, S 2013, 'Corporate Social Responsibility of Oil Companies in Developing Countries: From Altruism to Business Strategy', Corporate Social Responsibility & Environmental Management, 20, 6, pp. 371-384. Glavas, A, & Kelley, K 2014, 'The Effects of Perceived Corporate Social Responsibility on Employee Attitudes', Business Ethics Quarterly, 24, 2, pp. 165-202. Górny, A 2014, 'Influence of corporate social responsibility (CSR) on safety culture', Management (1429-9321), 18, 1, pp. 43-57. Grobler, P., Bothma, R., Brewster, C., Carey, L., Holland, P. & Warnich, S. 2013. Contemporary issues in human resource management (4th ed.). Oxford: South Africa. (Chs 8 & 9). Horrigan, B. 2010. Corporate Social Responsibility in the 21st Century, Edward Elgar: Cheltenham, UK. Jackson, I., & Nelson, J. 2004. Profits with Principles. Doubleday: New York, NY. Johnson, C.E. 2007. Ethics in the Workplace Tools and tactics for Organizational Lagan, A. & Moran, B 2006. 3D Ethics Implementing Workplace Values. EContent Management: Sydney. Lech, A 2013, 'Corporate Social Responsibility and Financial Performance. Theoretical and Empirical Aspects', Comparative Economic Research, 16, 3, pp. 49-62. Mohtsham Saeed, M, & Arshad, F 2012, 'Corporate social responsibility as a source of competitive advantage: The mediating role of social capital and reputational capital', Journal of Database Marketing & Customer Strategy Management, 19, 4, pp. 219-232. Ojo, M 2011, 'Co-operative and competitive enforced self-regulation The role of governments, private actors and banks in corporate responsibility', Journal of Financial Regulation & Compliance, 19, 2, pp. 139-155. Paine, L. 2003. Value Shift, McGraw Hill: New York, NY.
Pincus Hartman, L. 2005. Perspectives in business ethics (3rd ed.). McGraw-Hill: Chicago. Peloza, J 2012, 'How Corporate Social Responsibility Influences Consumers', Advances In Consumer Research, 40, pp. 62-65. Polishchuk, L 2009, 'Corporate Social Responsibility or Government Regulation: An Analysis of Institutional Choice', Problems of Economic Transition, 52, 8, pp. 73-94. Prahalad, C.K., & Porter, M.E. 2003. Harvard Business Review on Corporate Responsibility. Harvard Business School Press: Boston, MA. Rangan, K, Chase, L, & Karim, S 2015, 'the truth about CSR', Harvard Business Review, 93, 1/2, pp. 40-49. Richardson, J.E. (Ed.) 2012. Annual editions business ethics 2011/12. Dushkin/McGraw- Hill: Guilford, Connecticut (or earlier or later editions). Sharp Paine, L. 2003. Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance. McGraw-Hill: Boston, MA. Siyaranamual, MD 2009, 'The Economics of Corporate Social Responsibility (CSR)', ICFAI Journal of Industrial Economics, 6, 1, pp. 66-86. Škare, M, & Golja, T 2014, 'The impact of government CSR supporting policies on economic growth', Journal of Policy Modeling, 36, 3, pp. 562-577. Steurer, R 2010, 'The role of governments in corporate social responsibility: characterizing public policies on CSR in Europe', Policy Sciences, 43, 1, pp. 49-72. Tyagi, R, & Vasiljevienė, N 2013, 'The case of CSR and irresponsible management practices', Competitiveness Review, 23, 4/5, pp. 372-383. Wei-Kang, W, Wen-Min, L, Qian Long, K, & Hsiao-Wen, L 2014, 'Does corporate social responsibility influence the corporate performance of the U.S. telecommunications industry?’ Telecommunications Policy, 38, 7, pp. 580-591. Williams, OF 2014, 'CSR: Will it Change the World?’ Journal of Corporate Citizenship, 53, pp. 9-26. Read More

PART II AFFIRMATIVE RESPONSIBILITY TO CONCERNED PARTIES Are organizations obligated to honor the quadruple bottom-line? Business exists in a specific environment and it would be ignorant to claim that it does not have an impact on the surrounding environment including the community. For instance, a manufacturing business that owns a nearby production plant ultimately must produce by products during its production process. If the business ignores CSR and proceeds to dump the waste and by products haphazardly then soon enough the environment would become inhabitable for both the locals and the company employees (García-Rodríguez et al, 2013, 379).

Whilst pursuing profit making by utilizing natural resources, a business must acknowledge that it exists in an environment thus making it responsible for that very same environment. This is not only because the constitution stipulates so but because the moral requirements demand such actions this is in reference to Kew Garden Principles. The principle bases of five factors that range from extreme need, proximity, capacity, won’t suffer undue loss and finally no one else will act. (Branny & Nwagbaraocha, 2014, 67).

From the five principles, one is able to deduce why a business must act in the matter stipulated under ethical CSR regulations. Some critics argue that business has no obligation whatsoever to be socially responsible since it goes against the core concept of profit making (Williams, 2014, 18). This group of thought enjoys the backing of leading individuals like Milton Friedman who argue that a business’s exist for the sole purpose of making profit. To this group, CSR is a foreign concept that goes against the business principle by incurring costs of CSR which do not directly contribute to profit making (Sharp Paine, 2003, 292).

PART III PHILANTHRPIC AFFIRMATIVE DUTY TO SOCIETY The purpose of business beyond profits Ideally, a business should be able to cover its costs of operation and production comfortably in order to avoid bankruptcy. This is what most critics and stakeholders term as sustainability whether in the long run or the short term (Fifka, & Berg, 2014, 177). However, a business is not superficially limited to its profit making faucet instead it interacts with its environment in almost every possible level of operation.

The employees (both permanent and temporary), the administrative executives, the consumers and other stakeholders make up part of a synergy system that interacts to conjure an optimal environment for profit making. This makes it almost impossible to conclusively rule out the purpose of business beyond its primary role profit making (Grobler et al, 2013, 127). A business is likely to get involved in the life of its employees or the environment directly or indirectly. It may do that through employee welfare initiative or any of the numerous consumer related platforms.

One needs not to look further than the presence of the Human resources department and the sale and/or marketing departments in various organizations (Richardson, 2012, 107). These departments seek to maximize profit in the long run by taking care of the short term concerns such as employee welfare and customer satisfaction with the business’s final product. With respect to profit making, the business goes several steps forward by venturing into its immediate environment thus the above mentioned endeavors.

Direct Involvement with human life necessitates factoring moral considerations into every decision that the business makes. This aspect that involves business without an immediate motive for profit making is what constitutes the purpose of business removed from the singular limitations or profit and loss (Siyaranamual, 2009, 81). Profit making organization must therefore act in the best interest of themselves as well as their surrounding even if they do not stand to benefit. Simply put, corporate social responsibility is a low financial rewarding undertaking that has a higher reward in terms of employee performance and brand name (Brown-Liburd & Zamora, 2015, 84).

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