Definition of the Term Corporate Social Responsibility - Literature review Example

Introduction: In the post Enron saga, integrity and honesty of corporate conduct are always taken seriously. Hsu and Cheng (2012) view the Enron saga as an example of an ultimate crime that involves corporate irresponsibility. This and other unethical behaviours have seen an increase in the interests of the corporate reputation of different companies in the world. This in turn, has led to the emergence of the concept of corporate social responsibility. Majority of consumers are always eager to conduct business, with organizations that are ethical, and whose reputation is good. A number of scholars and researchers agree on the fact that a number of customers and the stakeholders of an organization normally want their companies or organizations to become accountable for any area of their social performance (Hunnicutt, 2009). However, different opinions exist on whether this concept of corporate social responsibility has the capability of benefitting an organization. Hsu and Cheng (2012) argues that overwhelming evidence does not exist, which is able to prove that the value of a company is affected by its lack of engaging in other areas of corporate social responsibility. However, in a study carried out by Hunnicutt (2009) that is at some of the leading British business organizations the results indicated that with a strong corporate social responsibility performance, and high disclosures, then chances are high that the company would experience some elements of profitability (Crane and Matten, 2010). However, whatever the financial and economic benefits of CSR, research indicates that a sustained pressure, from the stakeholders of an organization makes this concept of corporate social responsibility to be a very important issue for an organization. This paper is an analysis of this concept of corporate social responsibility. The major idea of this paper is based on the words of Wood (1991), which denotes that the concept of corporate social responsibility is whereby society and business organizations are interwoven, as opposed to being distinct entities. Based on this fact, the society accepts appropriate business behaviour, from the companies under consideration. This paper analyzes the environmental activities of Microsoft, as part of their action in building a positive relationship between them, and the society. Definition of the Term Corporate Social Responsibility (CSR) There is no clear agreement or consensus on the definition of the term, corporate social responsibility. Wood (1991) basically explains that the idea of CSR is that societies and business organizations are interwoven. This means that business organizations, would engage in this aspect of corporate social responsibility with the aim of serving the needs of the society. However, it is important to explain that this definition does not give directions, or identify the ethical responsibility that business organizations would engage in, for purposes of creating a strong brand name, which in turn would help them, achieve a competitive advantage over its rival companies. Filizöz and Fişne (2011) explains that another definition of the term corporate social responsibility is, the degree upon which the moral obligation may be identified to a corporation beyond a simple obedience to the various laws that govern the operations of a company, within the state. This definition recognizes the fact that engaging in activities of corporate social responsibility, normally goes beyond obeying the law. This is an indication to the stakeholders of an organization, that the company would follow ethics, while carrying out its activities (Crane and Matten, 2010). It is important to explain that companies which are always engaging in this aspect of corporate social responsibility are always viewed as ethical. This has an impact of improving their brand name, hence making the company under consideration to be competitive. Companies such as Google, Nike, Microsoft and Apples, are successful, because of the various corporate social responsibility programs that they have engaged in. For example, a company such as Apple, is known to be very environment conscious, and this is depicted on the type of electronic gadgets that they normally develop (Crane and Matten, 2010). Their products are always slim, and the aim of developing these slim products is for purposes of protecting the environment. A company such as Nike is also successful, because of its various corporate social programs that it has involved itself in. For instance, this company normally sponsors sports teams, and vulnerable students in third world countries. The environmental policies of Microsoft on the other hand, are developed out of a moral obligation (Crane and Matten, 2010). This obligation is to conserve the environment, as well as meet the desires and obligations of its stakeholders. This therefore satisfies the definitions above that the main intention of corporate social responsibility is to engage in a moral obligation, and to satisfy the needs and desires of shareholders. Wood (1991) was able to develop and come up with three major principles that govern this concept of corporate social responsibility. These principles are, A business organization is a social institution, and it is mandated to use its power in a responsible manner. Business enterprises are responsible for the outcomes that relate to their activities within the society, or the environment of their operations. Individual managers of an organization have a moral obligation to develop decisions, based on morality. From this analysis of Wood (1991), it is possible to denote that corporate organizations owe their existence to the society. This therefore means that corporate organizations would only survive, based on the willingness of the society to allow these organizations to survive. Most societies would only seek to do business with organizations that carter for their needs. It is based on this fact, that most companies would invest millions of dollars, just for the purposes of carrying out a research, to identify the various needs of their customers, or the society. There is also another alternative view, developed by Ducassy (2013) regarding the reasons of engaging in corporate social responsibility. According to scholar, the major reason of engaging in CSR is for purposes of increasing the profitability of a business organization. This means that companies engage in CSR with the view of increasing their market share, and it is not because they are socially responsible. However, this is not the case. This is because Crane (2008) explains that it is the stakeholders of a company, who normally pile pressure on its management to engage in CSR for purposes of serving the needs of the society. It should not be motivated by the desire to make profits. Out of the need of protecting the environment, Microsoft came up with an environmental policy. The environmental policy of Microsoft is based on the fact that the 20th and 21st century, companies are pressurized to protect and preserve the environment. Environmental conservation is one of the major demands of customers, and the society, hence companies are in a bid of initiating environmental conservation measures, aimed at satisfying the needs and demands of the society (Reverte, 2012). It is not only Microsoft that has an environmental policy, but also other multinational companies such as Samsung, Apples, Unilever, Wal-Mart, etc. Environmental Policy of Microsoft: Microsoft uses technology in creating a sustainable future and implementing policies aimed at protecting and preserving the environment. Microsoft believes that technology is one of the best ways that can be used for purposes of protecting the environment, mainly because it helps in making its operations to be leaner, and energy sufficient. It is important to explain that conservation of energy is one of the most important policies or principles of Microsoft Corporation (Carroll and Shabana, 2010). Furthermore, Microsoft believes that through the use of technology, and then the company would manage to solve and address the various environmental challenges that face the world today. By carefully looking at this statement, it is possible to denote that Microsoft seeks to initiate environmental sustainability programs, for purposes of addressing the challenges that the world faces, in regard to environmental conservation. Wood (1991) explains that a corporate social responsibility program is aimed at benefitting the society. This is the case with the environmental program initiated by Microsoft. Microsoft believed that by initiating a social responsibility program that is valued by the society, then chances are high that it would survive the stiff competition that it faces from other multinational corporations and companies. Furthermore, Woods (1991) explains that managers of a business organization have a moral responsibility of the outcome of their policies or activities. It is based on this fact that the managers of the company are able to develop a six point plan, on how they intend to protect and conserve the environment. The following is the six point plan, on how the company involves itself in environmental conservation and sustainability (Schreck, 2009), Advocating for the recycling, reusing and the conservation of natural resources. The company aims at achieving this objective by using recycled supplies and materials. Furthermore, the company constantly uses energy, and it participates in the recyclation of Microsoft products, after they have served their purpose. Furthermore, Microsoft constantly supports sustainable and efficient use of renewable natural resources. A good example where the company applied this principle is in its initiative to power its data centers, with electricity that emanates from the wind farm of Texas. The company entered into an initiative of buying 110MW from the wind farm, in the next 20 years. The intention of this policy is to preserve energy, and hence protect the environment. This is despite calls that the policy is not economically viable to the company, mainly because it is expensive. Engaging in activities aimed at efficiently disposing and reducing waste substances. Microsoft normally aims at reducing and eliminating waste substances through recycling and source reduction at the various facilities of the company. Every waste substance are responsibly handled (Singh, 2015). Furthermore, they are disposed in a manner that would ensure it does not cause harm to people. Through safe and efficient disposal of waste, Microsoft believes that it would manage to reduce the negative impact that waste products normally have on people. This therefore means that the company is concerned with the health of the society, hence fulfilling its moral objectives. Microsoft also aims at developing sustainable and safe products. The company is engaged in the process of manufacturing, developing and marketing products which are safe for consumption and use. The intention of this initiative is to protect its customers and the communities where its businesses operate. Engaging in environmental stewardship activities, whose main intention is to collaborate with other stakeholders for purposes of preserving the environment. Microsoft believes that environmental conservation needs the collaboration of the community, and it cannot achieve this objective alone (Singh, 2015). It is based on this belief, that the company encourages feedback from its customers, and the society, on the best method of conserving and protecting the environment. Developing measures and policies that continuously reflect the environmental needs of the society, and the community in which the company operates. The company greatly values any contribution that employees contribute towards the sustenance of the environment (Singh, 2015). On a regular basis, the company reviews its business activities, and it also provides an assessment of its environmental programs, goals and practices for purposes of identifying and evaluating the areas which it can make a difference, and for purposes of improving its current environmental initiatives. Coming up with environmental policies aimed at demonstrating the responsibility of the company to all its major stakeholders. The company achieves this objective by engaging its stakeholders on the targets and objectives of the company, and constantly communicating its progress to its customers, shareholders, members of the public, and the board of directors (Singh, 2015). Through this six point plan, Microsoft hopes at ensuring that the policies it has developed have managed to protect the environment, hence addressing the environmental challenges that the society faces. By careful analysis of this behaviour, it is prudent to denote that the assertions by Wood (1991), regarding the relationship between CSR and the society is correct. Microsoft engages in these environmental activities for the purpose of satisfying the interests of its stakeholders and the society at large. For example, one of the environmental CSR policies of Microsoft is to initiate measures and policies aimed at reducing the emission of carbon into the atmosphere. The company has therefore introduced the carbon fee, whose main aim is to reduce the emission of carbon by its various branches and companies all over the world. Through this fee, every department and region would be made accountable for any emission of carbon from its branches (Reverte, 2012). Through this policy, the company places an internal price on the carbon, and each of its division is responsible for an incremental price, which it will pay, based on the carbon emissions that the branch under consideration produces (Mujih, 2007). This money is thereafter used for purposes of investing it in other areas of environmental conservation, such as promoting energy efficiency, and promoting the use of renewable energy. One of the ethical theories that can be used to explain this behaviour is the consequential theory. Aronson (2009) explains that consequential theory is based on morality. According to this theoretical framework, the actions of business organizations are judged on the consequences of these activities. Furthermore, this theoretical framework denotes that an organization that acts in a moral manner, acts for the benefit of the majority of people. For example, the decision by the company to reduce carbon emissions is for the benefit of the society. This is because by reduction of carbon emissions, chances are high that the company would manage to protect the ozone layer, hence prevent global warming. This is a moral objective that will benefit the entire society. However, Hsu and Cheng (2012) explains that consequential theory is not the foundation of Corporate Social Responsibility. This is because it advocates for an action that is beneficial to the greatest majority of people, as opposed to every people. This means that the minority people may suffer from the actions and activities of the company. Therefore, Ketola (2010) explains that business organizations which develop their policies based on consequential ethics are vulnerable to a negative press, if the position of the minority people is known. However, Amaladoss and Manohar (2013) believes that this is not the case. This is because any action that an organization engages in must have an impact on the minority or majority group. It is virtually difficult to develop a policy that will satisfy everybody within the society. Another theoretical framework that can explain this environmental policy by Microsoft is the stakeholder’s theory. According to this theoretical framework, a company would develop policies aimed at satisfying the needs and requirements of its major stakeholders. The major stakeholders of Microsoft are its shareholders, and the society in which it operates under. The society is heavily concerned with the preservation of the environment. Specifically, the society is heavily concerned with issues that regard reducing the consumption of carbon into the atmosphere. Based on this fact, the policy of Microsoft, to charge carbon fee in its branches is aimed at reducing the emission of carbon into the atmosphere, hence serving the needs of the society (Microsoft, 2015). Conclusion: In conclusion, corporate social responsibility is an important activity that a business organization should engage in. On most occasions, the major intention of this initiative is to help a company create a positive brand name. This is because the company under consideration will be engaging in activities aimed at catering for the needs of the society. This is as opposed to engaging in activities aimed at making the company to increase the level of profits that it gets or attains. The environmental policies initiated by Microsoft are aimed at catering for the various interests of its stakeholders and the society. For instance, the company believes that it is the duty of the large multinational corporations to reduce their emission of carbon into the atmosphere. This in turn will protect the ozone layer, and hence reduce the impacts of global warming. It is important to understand that global warming is a sensitive topic in the present times. With all the major powers, including United States seeking ways and measures aimed at preventing its occurrence. Furthermore, citizens of the world normally seek to do business with companies that are environment sensitive. This means that they would carry out their business activities with companies that are involved in producing products that have the capability of conserving the environment. Wood (1991) is therefore right when he asserts that Corporate Social Responsibility is normally interwoven with the society. This association comes in the sense that the organization that engages in the CSR will always develop policies aimed at satisfying the needs of the society. Bibliography: Amaladoss, M., & Manohar, H. (2013). Communicating Corporate Social Responsibility - A Case of CSR Communication in Emerging Economies. Corporate Social Responsibility and Environmental Management, N/a-N/a. Top of Form Bottom of Form Aronson, M. (2009). Bill Gates: A twentieth-century life. New York, N.Y.: Viking. Top of Form Bottom of Form Carroll, A., & Shabana, K. (2010). 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