The Concept of Corporate Social Responsibility - Essay Example

? Corporate social responsibility Introduction This paper tries to get an overview on the concept of corporate social responsibility (CSR) in the paper we look at how different writers have defined CSR and their arguments for and against the move. Corporate social responsibility has been hard to define as there is no commonly agreed definition that incorporates all aspects in consideration. According to Milton Friedman the definition should include not only economic responsibility, legal obligation but also society .decision makers should make laws to ensure we have regulations on how to protect and improve wellbeing of the society. Banerjee approach on social responsibility can be viewed on how he has approach the concept in trying to give some of the advantages and disadvantages. Historically the social helped in development of corporation and allows devolution of power from the central government to the local citizens and help in improving the economy both politically and economically. In USA social responsibility has helped in revolution of legal structures and effective government policies to deal with social responsibility however critics have stated that social responsibility should be volunteerilism not by ensuring they are incorporated in the law and must act in the interest of the society as well (Banerjee, 2008). Corporate social responsibility is self regulating by ensuring that one complies with the community needs as does is best to better the society he or she is operating his business. A business activity should be for the general good of the employees, owners, consumers and society.CRS creates customer loyalty to a brand of product hence business is able to beat competition in the market; it also leads to employment opportunities in the society. Businesses with volunteerism work records have advantage in acquiring license to operate in different areas without restriction and high taxations. Supply contracts have being awarded to those companies that have clean records of contributing to the wellbeing of the community.CRS strategies should be aimed at building capacity that will help in reduction of poverty levels in a region , promote giving that increases security and human , property rights according to international standards, reduce corruption and bribery and increase accountability and transparency. Friedman’s social responsibility model can be divided into two the business and to the beneficiaries. Where the business has obligation to respect what the shareholders aim to achieve, keep costs low, ensure they comply with the state laws and also follow the ethical customs in the area of operation, ensure they give room for free and open market competition and not to be involved in unlawful transactions. The community also has a role to play by providing labor force, creating good working condition for the business and also be actively involved in social activities (Cosans, 2011). Arguments for social responsibility According to Buchholtz corporate social responsibility should include; production of goods and services, solving social problems, simple market transactions. Milton Friedman focused on the idea that social responsibility of business is to increase its profit. The use of available resources and should increase profit, in free and fair competition .arguments in support for social responsibility is that managers have to ensure they increase the shareholders wealth should be increased. Policy making should be left to be decided by the state, giving is encouraged and engaging in social responsibility by owners of firms. Firms should act in a free and accountable ways to ensure it does not affects the society breaking the law and protect the environment. Act in a way not to affect objectives of the firm and consider interest of others. Arguments against Milton Friedman is that although he argued a firm should make as much as possible he does not limit this to existing laws of production ,exploitation and property right. (Schwartz & Saiia) Strategic social responsibility is corporate and show the relations between personal identity emphasizing on ethical identity and stressing on the self esteem and how this affects those around you in his study he was specific to point out how ones knowledge and view of his/her identity can affect those near him positively or negatively . The general economic view on the issues of corporate social responsibility show if they are optimistic or permissive. Focus also in neglect of self identity and its effects on the surrounding. These show that there is interdependence between all aspects in the economy and thus should be Social Corporation in dealing with issues. Managers should be in a position to ensure they make working conditions conducive to all workers in order to ensure there are good relations and all this ensures the productivity is increased and profit maximized. A well spelt out hierarchy of leadership system should be in place to ensure proper communication channel is maintained which in turn leads to job security, financial performance and giving charity to the society. Legal respect is essential to attain corporate social responsibility and this depends on the leader’s observance of the law. Social responsibility has been viewed as a way tom eliminate vicious circle where the poor remain poor and live in poverty defined conditions. Environmental factors are considered to contribute much to the social responsibilities, firms operations and profit levels are also affected greatly if this is not considered production (Baker & Roberts, 2011). Social responsibility need to be regulated to avoid conflicts of interest and moderate wealth creating corporate from exploiting the society hence the society enjoys property rights in developing ways to maximize profits of its shareholders. To create an atmosphere for good and interactive social responsibility should be greater understanding on how to support owners of firms and community through communication, partnership and integrity to human and its environment. Respect should be observed in dealing with communities and shareholders. Large organization is interested in exploring how to develop environment and social responsibility without affecting voluntary incentives that support the society and their freedom. Sustaining social responsibility can only be attained by providing more social opportunities in organization strategies. Power and politics is considered as one of the strategies to increase social responsibility by governments by locating more time and labor to serve the nation and provide good services in form of institutional and social activities and increases their ease in governing the people. Businesses are focused in solving societal needs and to their interest they should ensure good working relationship between the businesses and communities in their surrounding environs by providing some services to improve the welfare of the society and interacting with governments to provide projects geared at improving the general need of the state hence have growth in the economy. Stakeholders should aim at creating democracy, efficient markets, diffusion of services to the society and creating trust and flexibility in what they do and this gives them the power to exist in the society and create changes in the environment (Banerjee, 2008). Corporate social responsibility has increased business aim from being a profit maximizing organization to improving quality of life to humanity by respecting laws culture and customs of the society, having good relation to the citizens and researching on different methods that can be utilized to improve the living standards of the community as a whole. Their is no clear outlined procedure and method on how businesses should operate and as well improve the environment in a positive manner as most of them seems to care about the society theoretically but in reality they are making the living standards of the residents unfavorable due to exploitations. Business should be determined to ensure they uphold integrity in their operations, respect human rights and improve the residents living standards, work to reduce the overall poverty index in the world, support in offering social amenities in the community, ensure freedom for all, increase employment opportunities, improve the environmental conditions, and ensure good relations with the state and community where they are based. Many international organizations have being credited for their support in fighting poverty levels in the world by ensuring they provide essential services to the communities for example Ford motor companies has received many awards for their contribution in donating food to famine struck areas all over the world. PepsiCo is also re-known for its quality health products and ensuring the global nutrition problems are reduced through its commitment to serving the society. Many examples can be quoted in ensuring there is corporate social equality in the society environmentally, ethically and provisions of basic needs (Bejou, 2011). Argument against corporate social responsibility Milton’s contribution in the corporate social responsibility can be summarized to include maximization of firm being the main objective of any organization, legal and ethical values are considered fundamental in social responsibility and does not advocate for deceptions. However their has being a broad corporate social responsibity which looks into core values, rights of others should be considered ,justice is crucial and laws should be observed , giving is encouraged. . (Schwartz & Saiia) Theoretical responsibility has proved that identification of one person affects others both physically and morally. Educating staff in a firm is away by which managers interacted with the society to reduce ethical imbalances hence reducing cost and increasing efficiency in production (Baker & Roberts, 2011). Manager’s responsibility despite being to satisfy their own welfare should also involve others satisfaction in obtaining their profitable development, accountability, financial and environmental progress hence failure to respect others in their neighborhood increases threat of being attacked. awarding freedom to workers by managers should be their responsibility so as to show their potential in improving ethical identity and introduce projects that will grow the society as a whole (Baker & Roberts,2011). Banerjee (2008) approach on social responsibility can be viewed on how he has approach the concept in trying to give some of the advantages and disadvantages. Historically the social helped in development of corporation and allows devolution of power from the central government to the local citizens and help in improving the economy both politically and economically. In USA social responsibility has helped in revolution of legal structures and effective government policies to deal with social responsibility however critics have stated that social responsibility should be volunteerilism not by ensuring they are incorporated in the law and must act in the interest of the society as well. Business ethics is crucial to businessmen and women hence they should ensure in their daily activities they don’t harm those who coexists amongst them by improving the welfare of the surrounding and incorporating the societal needs and interest .decision making of stakeholders should take into account how it will affect the surrounding and act in a manner that does not harm others interests. Hence the decisions objectives should not be profit motivated but geared towards reducing inequality in the society. Shareholders or owners of public companies should ensure they act to benefit themselves and the benefit of the community, respect others, keep low costs, comply with the law, culture and customs of the society, encourage free and fair competition and avoid fraud (Cosans, 2009). Businesses have come under criticism due to their irresponsible behavior in their operation which does not lead to improving the living standards of the community, workers are forced to work additional hours with no extra pay at all and employees are not allowed to form or join work unions which advocate for their rights. Freedom is also violated by exposing workers to long working hours and is also against labor laws that argue that workers should join unions to ensure their employment rights are respected, government should be guided by policies that clearly state we have set minimum wages which incorporates society customs and cultures .liberty is also not addressed properly and raises concerns on the level of liberty to be allowed not to harm the society and environment (Cosans, 2009). According to Mulligan (1986) Friedman social responsibility does not seem to have right basis for argument because it does not represent taxation in fair way of the total earning and this is purely government task , it also gives power to the community who does not rule any section, it does not give preventive checks to monitor how government power can be devolved to the society, it does not clearly show how employees and masters are interrelated without affecting each other which is not the case as employees have to follow the masters aim or else they end up loosing their jobs, encourages exploitation as cost does not consider the livelihood in the society as being involved in social responsibility requires money and hence they determine cost to include such responsibilities and also do it as compensation for pollution. Corporate social responsibility in business people should be of mutual interest and must include social role and be fully committed in implementing projects to better the area (Mulligan, 1986). Businesses are interested in creating employment and must have some social responsibility to continue being viable in the area and reduce poverty index in the area. Employing local citizens is instrumental in providing social services as you are improving their livelihood, and also reducing cost of production. Private interests in organization has been the hindering factor in providing community needs as the firm is interested in accumulation of profit and its expansion, against the community needs which include access to basic needs like food ,employment, health services, basic education ,and housing. This seems to be hard to attain due to competition among firms. (Neimark, 1993). Business of ethics has shown that due to greed in business operations has lead to employment of unlawful methods to maximize profits like evading taxes, bribery, dealing in illegal products, lack of audit records in firms etc. These have lead to formation of monitoring committees to ensure all firms are operating in a free market. (Neimark, 1993). To ensure business participate in corporate social responsibility large companies have introduced ethics officers in their operation hence reducing immoral in implementing social projects. Corporate code of conducts has being introduced in businesses to serve the community. Monitoring of all resources reserved for social responsibility helps in increasing services in the society. Moral and ethical values should be introduced in business to assist in the need to be philanthropic to the societies needs (Neimark, 1993). Social responsibility is aimed at bettering the world at large by provision of needs to humanity and improving the environment. One has to recognize that we have to exist with others and there is need to ensure we have heart to give others so as improve identity of others by exchanging skills and knowledge which will be useful in future. Social responsibility is good in that it gives hope to those interested in governance and forecast in the way you may raise the ranks of leadership hence the more you rise through the hierarchy will create accountability to your juniors. Business ethics is also considered crucial as competition and meeting of targets has increased pressure on firms to consider undertaking social services to the community, institutions deployment of new way of doing business has helped in participation in community projects as media focuses on business which has contributed greatly to the community (Roberts, 2003). The negatives of social responsibility can be contributed to reducing the profit margins of a firm ass these projects requires reasonable amount to implement, the organization personal interests can be considered as reason for not being involved in the community where their are good theoretical procedures on how a project will be undertaken but no follow up to implement it , moral and ethical values of a firm may not have good monitoring system to implement social projects hence end up being partially or inefficiently effected and lack of cooperation between the organization and the society contributes negatively in implementation of social activities (Roberts , 2003). Conclusion CRS has contributed greatly in provision of basic needs making the world have conducive environment where everyone desires to live and raising self identity to low esteem individuals and increasing the living standards of people in poverty stricken areas. This has lead to believe in people that they can change their current wellbeing for better, they need each other for survival, equality is only attained by providing basic needs and wants to people uniformly and realize that we need to know what others are doing (Neimark,1993). The negatives of social responsibility can be contributed to reducing the profit margins of a firm ass these projects requires reasonable amount to implement, the organization personal interests can be considered as reason for not being involved in the community where their are good theoretical procedures on how a project will be undertaken but no follow up to implement it (Roberts, 2003). Friedman social responsibility was unfair in that it did not show taxation should be regulated and why taxation was of concern to the government and it’s primarily the work of government to ensure there is good taxation system that allows flexibility in doing business in the country. according to Friedman’s argument there is no trust between the shareholders and employees of the firm which is not the case as owners of firm have trust in their employees and give them the freedom and rights to run the firm in the their best interest. Also giving back to the society does not reduce most but is a way of ensuring customer loyalty to the product and also improving poverty index in their area (Mulligan, 1986). According to Cosans (2011) Friedman’s social responsibility model can be divided into two the business and to the beneficiaries. Where the business has obligation to respect what the shareholders aim to achieve, keep costs low, ensure they comply with the state laws and also follow the ethical customs in the area of operation, ensure they give room for free and open market competition and not to be involved in unlawful transactions. The community also has a role to play by providing labor force, creating good working condition for the business and also be actively involved in social activities. Social responsibility should be encouraged to improve lives of people living under the poverty level and this can only be reached by ensuring all basic commodities are available to them because giving charity does not improve the life’s but the provision of the services can prove to improve their general standards of living. References Baker, M & Roberts, J 2011, All in the Mind? Ethical Identity and the Allure of Corporate Responsibility’ Journal of Business Ethics, 101, pp 5-15 Bannerjee, SB 2008 ‘Corporate Social Responsibility: The Good, the Bad and the Ugly’, Critical Sociology, vol 34(1), pp 51-79. Bejou, D 2011 ‘Compassion as the New Philosophy of Business’, Journal of Relationship Marketing, vol 10, pp 1-6. Cosans, C 2009 ‘Does Milton Friedman Support a Vigorous Business Ethics?’ Journal of Business Ethics, vol 87, pp. 391-399 Mulligan, T 1986, ‘A Critique of Milton Friedman’s Essay “The Social Responsibility of Business Is to Increase Its Profits’’’, Journal of Business Ethics, 5, pp 265-269 Neimark, MK 1995 ‘The selling of ethics: The ethics of business meets the business of ethics’, Accounting, Auditing & Accountability Journal, vol. 8, no.3, pp 81-96 Roberts, J 2003 ‘The Manufacture of Corporate Social Responsibility: Constructing Corporate Sensibility’, Organization, 10, pp 249-265 Schwartz, MS & Saiia, D 2012 ‘Should Firms Go “Beyond Profits”, Milton Friedman versus Broad CSR’, Business and Society Review, 117, pp 1-31 Read More