Values Driving the Choice of Corporate Social Responsibility Activities - Essay Example

Corporate Social Responsibility Contents Contents 2 Introduction 3 Corporate Social Responsibility Perspectives 3 Values driving the choice of CSR activities 4 Corporate Social Responsibility: A case of Nike and Standard Chartered Bank 5 Nike 5 Standard Chartered Bank 6 Benefits of Corporate Social Responsibility to Stakeholders and the society 8 Facts for and Against Corporate Social Responsibility 10 Conclusion 10 Bibliography 11 Introduction Corporate social responsibility (CSR) refers to economic, ethical, legal, as well as unrestricted expectations that the society places on organisations and institutions at a particular point in time. The idea behind the corporate social responsibility requires organizations and institutions to have ethical, moral, and philanthropic duties. This is in addition to their activities that earn them revenue for proprietors in the process of carrying out business within the precincts of law. The traditional perspectives of corporation hold that their basic and sole responsibility is to serve the stakeholders also called owners. Corporate social responsibility goes beyond this definition and adds more duties to corporations, companies, as well as other institutions in the society. Additional responsibilities include covering a broader perspective that considers other important constituents in addition to stakeholders such as the community, state, local government, special interest groups, and environmental groups. There is a close relationship between business ethics and corporate social responsibility. They are however, different. Whereas corporate social responsibility includes among others ethical, economic and legal responsibilities business ethics on the other hand, puts into perspective behaviour of groups, personalities of individuals, as well as their moral judgments within institutions and organizations. This definition puts business ethics as a topic under corporate social responsibility. Corporate Social Responsibility Perspectives Most scholars agree that the definitions of corporate social responsibility results in a multi-faceted form of the same. An economic duty of business organizations and institutions expected by the society revolves around the hope among them that the organizations will produce goods and services they desire and in need of and sell the same to them at affordable prices. Organizations on the other hand, strive to maintain shareholders’ interests by remaining profitable through efficiency. Complying with both national and federal law constitutes legal expectations on the side of the institutions and business organizations. These laws and by-laws aim at enhancing fairness in the market by creating a business environment that supports competition (Carroll, 2003, p. 77). Thousand of legal duties govern and regulate activities of all business organizations and institutions. No single responsibility or action of a company operates without governing principles from either the state law or federal by-law. Laws cover all areas among them production and consumption, employment laws, employer-employee relationships, as well as environmental law and many more. Values driving the choice of CSR activities Ethical duties on the other hand, deal with expectations of the society going beyond provisions within the law. Included in this category are expectations that the organizations will carry out their operations in just and fair manner. This puts an extra responsibility on institutions and organizations beyond what the law and by-laws cover. Some of the norms bestowed unto the organizations may not appear in the law but institutions and business organizations must execute them effectively. Scholars refer to discretionary responsibilities as unrestricted duties in other terms. In this case, the society understands that most corporations assume independent identity from the owners therefore, must behave as good citizens. If human beings are philanthropic, then the society also expects the organizations to be philanthropic as well. The country and the community remain the beneficiaries of such philanthropic activities while the institutions and business organization keep their position as the benefactors. Although the idea of corporate social responsibility is new, its scope and nature is contemporary and changes with time and changes in both technology and environment. Corporate Social Responsibility: A case of Nike and Standard Chartered Bank Nike Nike Inc is a company specialising in the manufacture and distribution of clothing, footwear, and other accessory commodities for the athletic market as well as sporting industry. The company prides in being the leading brand in the industry with an active market in one hundred and forty countries across the globe and nineteen thousand retail shops and accounts in the United States of America alone. All products sold by the country come independent contractors that manufacture with footwear remain prevalent in the emerging markets mostly found in developing countries. The company has its biggest manufacturing factories in Mexico, China, Italy, Taiwan, United States, and Korea. This state continues to drive Nike to remain one of the most targeted world companies by a wide range of journalists and campaigning NGO’s. Companies seek associations together with symbolic representation in the society. The biggest involvement by Nike concerns human rights as well as working conditions for employees in their work environments. The company developed an active website concerned with handling its corporate social responsibility issues following what the company termed as malice by certain individuals and rival companies. The company focuses on reduces carbon levels within contracted manufacturing factories. This is in addition to availing sports to most young people around the globe. The official website monitors developments in various parts of the world with regular updates available on the same site. Statistics from around the world influenced the decision by Nike to get involved in conditions for workers as well as human rights. In Indonesia for instance, fifty-eight percent of the workforce constitutes people between the age of twenty and twenty-four while eighty-three percent of the same populations comprises of women. Only half of the workforce boasts of senior high school education certificate with just few having adequate and necessary skills by the time they secure employment (Mele, 2004, p. 69). Ninety-five percent of the workers in factories contracted by Nike received a wage increase by the close of last year following government stipulations. Few employees still take home a pay way above the average pay in the region although, critics still hold that the difference is small. Nike Inc has more than seven hundred contract factories in the world. Approximately twenty percent of employees in these factories create Nike products. Human rights activists raised complain about the welfare of these workers. Debate about the same too a heated approach when the media uncovered miseries endured by some of them. Other issues highlighted by the media included employee abuse as well as harassment at the workplace. Response to these accusations by Nike included putting in place necessary measures to protect employees. The code applies to both contractors and suppliers. In collaboration with Global Alliance, the company is in the process of investigating twenty-one factories affiliated to Nike said to be sitting on the raised issues affecting employees negatively. Thirty percent of employees in Indonesia experienced abuse while fifty-seven percent of the same population observation abuse. On average eight percent of employees report verbal sexual harassment at the workplace (Marquez, 2005, p. 306). The same report indicates that at least four percent of the workers experienced physical sexual abuse at work. Standard Chartered Bank The management at Standard Chartered bank holds that corporate social responsibility constitutes the company’s contribution to good environment that sustains development. Majorly, the company undertakes social corporate responsibility to embrace communal responsibility as well as enhance a positive influence through its activities to the public. Evaluating the value of the business to the process of doing business sits at the centre of Standard Chartered Bank’s business operations. The heritage and ethical practices offer the structure within which the bank carries out its activities. The company continues with its commitment to environmental matters starting with the top management. The company’s social corporate responsibility vision is becoming the global hospitality leader in showing how responsible banks develop and build economic opportunities as well as stamping authority as a protective force of the environment. The company develops its culture making it more vibrant by investing within the communities it carries out businesses. In the end, communities, the business, and the relationship between the two grow stronger and bigger. Among the beneficiaries are groups of people living with HIV and AIDS in India, the Go Green project, which handles the environmental measures network, and Standard Chartered marathon across major cities in the world dubbed seeing is believing. By two thousand and thirteen, the seeing is believing initiative had restored sight to more than two million individuals across the globe. The company projects that it will achieve its goals of raising twenty billion US dollars to restore sight to twenty million people in twenty cities in the world. The biggest numbers of beneficiaries of this project are in India where more than half a million people have their sights back following high-level cataract surgeries. Great differences exist between the route taken by Nike and Standard Chartered bank to serve the same purposes of helping communities out of problems. While Nike seems to take reactionary measures, Standard Chartered appears to undertake precautionary actions. The bank is in the money and baking industry and serves people completely far from their area of business while Nike goes directly to where the shoe pinches them. In both cases, the two companies engage in partnerships with other institutions and organizations to achieve the corporate social responsibility goals. Benefits of Corporate Social Responsibility to Stakeholders and the society Social corporate responsibility is the best mechanism for companies benefiting themselves and serving the society as well although, they may not be means to an end in themselves. The company benefits from innovation when it engages in social corporate activities. The context within which companies carry out corporate social responsibility determines the levels of benefits of both the society and the company. A case in point is developments within Unilever. The company managed to develop new products using lens of sustainability including the hair conditioner. Beauty therapists using this device use of less water while carrying out their daily business chores (Arthaud-Day, 2005, p. 17). If the company did not consider sustainability through corporate social activities, they may not have developed such a product. The research and development put in a lot of effort during this exercise. Cutting costs for any company entails the bottom-line of sustainability. Undertaking corporate social responsibility helps organizations to save a lot on expenditure. Cutting across less packaging as well as reduced energy the savings add up quickly and organizations realize their value almost instantly. Actions by General Millers for instance, to install meters that monitor energy consumption on most of their products resulted in the company saving six hundred thousand dollars and is in the process of saving up to twenty percent of the cost incurred in energy consumption. The other benefit constitutes differentiation of the company brand. This traditional aspect of corporate social responsibility persists to date. Timberland stands out as one of the companies that succeeded in incorporating the company voice and values within the business structure. However, this alternative much more additions because competitors continue to adopt almost similar methods in carrying out corporate social responsibilities to increase their market share. Coca-Cola and Pepsi, the two world leading beverage companies demonstrate this analogy. Undertaking sustainability drives the growth of company businesses. Corporate social responsibility remains the long-term interest and takes care of the future aspects of the company. This role helps the management of the company from focusing on financial results to the influence the business decisions taken today have on both future social and financial outcomes. The company fulfils its aim of engaging customers by carrying out corporate social activities. This is the foremost role of carrying out these activities. Walmart remains the leading company in handling environmental matters. The company ran a big advertisement on ways through which consumers could choose their products. By carrying out social activities in communities, the company can take the opportunity to market its new brand of products. The company also utilises the opportunity to engage existing and potential clients within and outside the target market in new ways. Actions in this perspective also help employees understand activities of the organization. This is an important aspect of employee engagement. Facts for and Against Corporate Social Responsibility Scholars occupy two extreme ends of a continuum among those in favour of corporate social activities and those against the model. Milton Friedman, the American economist for instance, disputes the economic argument supporting CSR activities. According to him, the business runs to serve the interest of making profits for the owner. This is despite the fact that it must operate within the law (Post, & Weber, 2002, p. 65). The utilitarian forces will take care of the interest of other millions. If they fail, the government must do the same otherwise, that issue is not business organizations. From the competitive aspect, dealing with social problems comes along with an additional expenditure. In CSR, the company covers these costs and this interferes with its position in the competitive market. Furthermore, opponents of this initiative hold that the training underwent by business executives and managers does not relate to handling complicate societal issues. Therefore, asking them to partake in such activities amounts to overstretching their capacities. Conclusion Irrespective of the side that an individual may fall on the debate, the role of CSR in the society and to companies, no one can ignore its value. The relevance ranges from environmental values, technological significance, market importance for business organizations, as well as increased global issues arising from business activities. Businesses operate in environment with many controls from different perspectives. They also ought to care of the populations that sustain their value and relevance in the industry. Companies failing to invest in CSR activities risk losing a lot from the society. Bibliography Arthaud-Day, L (2005). Transnational Corporate Social Responsibility: A Tri-dimensional Approach to International CSR Research. Business Ethics Quarterly 15, 1–22. Carroll, B., (2003). Business and Society: Ethics and Stakeholder Management. 5th ed. Australia: Thomson South-western. Mele, D., (2004). Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics 53 (2004): 51–71. Marquez, A., (2005). Measuring Corporate Social Responsibility. Corporate Reputation Review 7, 304–308. Post, J., & J. Weber., (2002). Business and Society. New York: McGraw-Hill. Read More