Corporate Social Responsibility by Microsoft Corporation - Case Study Example

Corporate Social Responsibility By Professor Class University City Date of submission Executive Summary For many years, business entities have been experiencing competition with no strategies that would offer the better competitive advantage. However, with the realization of the crucial role played by the stakeholders, most organizations are shifting to Corporate Social Responsibility (CSR) as a means of enhancing the level of accountability within an organization. The model seeks to embrace responsibility for organizational activities and encourage the positive impact on both the environment and stakeholders like consumers, communities, employees, and investors. It is from such background the report would be focusing various concepts of CSR and its important aspects. Besides, the report focused on Microsoft Corporation with its citizenship corporation as a method of improving the social well-being of the customers and methods in which if it implements, then it might increase its competitive advantage. The market is becoming more competitive, and potential competitors like Apple Inc. are serious investing CSR to improve their operations. Introduction With the rising number of businesses coming into operations and competition becomes the matter of the day, what an organization stands for often matters to the consumers than whatever product or services they are offering. In addition, most researches indicate that organizations with the best reputations are likely to influence the purchasing power of the consumers, recommendations, and investments. It is from such background the report would be focusing on the Corporate Social Responsibility (CSR) of the Microsoft Corporation (Lawrence, Weber & Post, 2004, 115). The company could be an example of a good corporate citizen since it supports a good cause and ensure environmental protection. According to the studies conducted by Reputation Institute, indicated that Microsoft Corporation had the best CSR. The organization has been able to align its citizenship mission with the needs of the people through serving them and fulfilling its responsibility to the people. Definitions and important aspects of Corporate Social Responsibility Globally, there are several definitions of CSR depending on what an organization intends to achieve in the end. According to Carroll and Buchholtz (2003, 36), CSR is ethical, economic, discretionary, and legal expectations that a community has on the organization at a given point in time. Therefore, from such concept, it is moral, ethical, and philanthropic responsibility of the business entity besides its normal responsibility to earn a fair return for investors while complying with required regulations. Traditionally, the primary responsibility for an organization is to the owner or the involved stakeholders. Nevertheless, CSR views an organization from the different point with an expectation of adoption of a broader view of responsibilities that not only include the stakeholders but several constituents as well. These constituents include employees, local community, environmental groups, special interest groups, suppliers, customers, locals, state, and the federal government. Several groups are affected by the organizational actions. In most cases, CSR relates to, but not much identical with the ethics of the business (Thompson, Strickland, & Gamble, 2008, 122). While CSR incorporates ethical, economic, legal, and discretionary responsibilities of the corporation, business ethics often focus on the behaviours and moral judgment of the employees with the organization. As a result, there is a closer relationship between the ethical concept and CSR in business management. Consequently, the definition of Carroll and Buchholtz explores CSR as a multifaceted concept. From the economic perspective as cited in the definition, the society expects any organization venturing into business to produce goods and services that would help fulfill the needs and desires of the potential clients at affordable prices. Besides, the communities expect an organization to be efficient, keep the interests of the shareholders at hand, and profitable. In relation to legal responsibilities, both the state and communities expect an organization to comply with the outlined laws governing the business management and welfare of the employees like Occupational Health and Safety (OHS). Besides, compliance involves alignment with set down regulations by both the local communities and the state to govern the level of competition within the marketplace (Zu, 2009, 101). It is important to note that business entities have numerous legal responsibilities governing almost all the aspects of their operations. These laws include consumer protection laws, product laws, employment, and environmental laws. More crucial is the ethical responsibility of the business in relation to societal expectations. Ethics go beyond the law and involve expectation than an organization would conduct its activities in a fair and just manner. Therefore, an organization needs to do more than just compliance with the law, but also ensure that it makes proactive efforts of anticipating and meeting the norms of the communities beyond those formally enacted by the law. Finally, the discretional responsibility of an organization is to ensure that the communities view it as a good citizen. Activities that might help cushion discretionary organizational responsibilities include philanthropic support programs that would benefit the local communities and the nation. Some definitions view Corporate Social Responsibility as the responsible business, corporate conscience, and citizenship. Furthermore, it a form of self-regulation that businesses integrate into their activity models to ensure that they monitor and comply with the required standards at national and international levels. CSR aims at embracing the corporate responsibility actions to encourage the positive impact on the environmental conditions and shareholders expectations. Additionally, CSR aims at promoting organizational visions through accountability to a wider range of shareholders and investors. The major areas of concern are environmental protection and ensuring the well-being of the employees, general civil society, and the community both presently and in the future. However, there are several factors underpinning the idea of CSR (Mobley & National Legal Center for the Public Interest, 2004, 118). These factors include the idea that most corporations have no longer the capacity of operating in secluded economic entities that are operating in detachment from the wider community. Moreover, the traditional perception regarding competitiveness, profitability, and survival are currently fading away. There are several drivers pushing businesses towards embracing CSR. These drivers including the shrinking role of the governments, increased demand for greater disclosures, rising level of the interest of customers, escalating competitive labour markets, pressures associated with the interests of the investors, and supplier relations. From such point, CSR could mean the integration process of business operations and values in the stakeholders interest, which are reflected in the organizational policies and actions. CSR model used by Microsoft Corporation Reputation Institute recently announced Microsoft Corporation as the best investor in CSR for its philanthropic efforts. The organization’s CSR model mainly focuses on the Corporate Citizenship. Citizenship refers to a set of organizational activities, which intend to add values and address a wide range of social issues influencing an organization. If the corporation views these activities as mere add-ons, then the value added might be very limited (Gamble & Thompson, 2009, 210). Under the leadership of Don Bross, a Senior Director of Corporate Citizenship at the Microsoft Corporation, the program would be seeking to build to build such activities into its organizational structure. As an initial step, the organization developed a global strategy that asked the citizenship leagues issues that are more relevant to them. In its branches in Switzerland, the organization chose to address issues surrounding child safety through protection of children from the predators. To achieve its objectives, the organization focused on working with the schools and citizen groups to educate the parents on methods of utilizing privacy settings to prevent predators from having any association with the children. In Japan, the corporation focused on the aging populations in which the strategy assisted the local teams to identify and develop a national plan about the issues that are affecting the old people. In Washington, the corporation decided to collaborate with the state government with an aim of providing training both the unemployed and veterans. To achieve success in such context, the organization decided to provide vouchers so that the target groups could take short courses on Microsoft Word to acquire skills that might help them secure jobs. The corporation also intends to reduce it environmental impact through reduction of waste by providing receptacles for recycling and composting. Organizational environmental teams have been working closely with the developers of the Windows 7 Operating System with an aim of increasing its energy saving functionality. Power usage reduction helped opened new market for the product. However, the corporation has been experiencing several challenges associated with the implementation of the model (Gates & Rogak, 2011, 98). These challenges include problems associated with creating transparency within its supply chain considering the number of investors attracted to organizational activities. Most of the stakeholders were concerned with organizational interest in addressing issues associated with human rights and carbon emissions. Another challenge is ensuring an effective communication with the shareholders. Effective communication is crucial to the achievement of the organizational objectives. Although CSR plays an important role in creating a better competitive advantage, it is important to note that it has several merits and demerits associated with its implementation. CSR model makes an organization socially responsible. To some extent, it is useless and potentially dangerous since it goes against most of the basic aims of doing business, which is making the profit. Moreover, the concept has become pervasive in most business entities. Every moment the corporation adopts policies supporting CSR, it aims to demonstrate ethical values that would help organizational goals and respecting both the communities and environment. CSR helps in improving organizational profitability and value. Introducing energy efficiencies and waste recycling practices play an integral part in environmental conservation. It increases accountability and transparency among the shareholders and local communities, which enhances reputation in the market sphere. However, focusing too much of the social wellbeing of the shareholders and investors might lead to the demise of the organization that could in turn have a negative impact on the economy. Recommendations for better use of the CSR models For many years, the corporation has been dealing with several social issues and problems of which some of them affect organizational performance directly or indirectly. To ensure better implementation of the social factors, it would be important to consider adequately some of the social factors influencing organizational performance (Hopkins, 2003, 178). These issues include environmental factors, global, and technological issues. In relation to environmental issues, the organization has been receiving numerous criticism due to its negative effects on the natural resources caused by the improper disposal of the electronic materials. These factors contribute to environmental problems such as pollution, global warming, and health-related issues associated with poor disposal such as cancer. As a result, several environmental groups have been advocating for the organization to adhere to the required environmental standards and voluntarily change waste management and production processes to cause lesser harm to the environment. The organization should consider using materials that have no less impact on the environment and relocation of the people closer to the organization to prevent exposure to leaked hazardous material from the company. Microsoft Corporation operates from the sphere of the global environment. Business globalization is an irreversible trend, which attract several opponents. Several kinds of research indicate that globalization often leads to exploitation of the potential customers especially in the developing countries, environmental destruction, and increased abuse of human rights. In relation to global issues affecting the organization, most people, especially with those with less disposable income and low purchasing power, argue that globalization primarily aims to benefit the wealthy (Vogel, 2005, 88). Besides, disparities in the prices across the globe play a key role in widening the gap between the rich and the poor. Proponents of globalization argue that opening the market could lead to increased standards of living, increased wages for the workers, and economic development in the impoverished nations. The major daunting social issue affecting the organization is the different labor standards occurring across the globe. Besides, such issues are becoming more complex with changing societal standards and expectations regarding the working conditions. Therefore, it is important that the focuses on improving the living standards of both developed and underdeveloped countries to ensure that its CSR policies reflect global concern. The corporation must decide on the responsible option of whether to adopt the standards of the country in which it operates or impose a common standard globally. Technology is another contemporary social issue that affects the society. Consumers are looking for technical products that would satisfy their needs while at the same time incurring less cost to acquire the products. With advancing technology, the corporation risks losing its potential clients to major competitors like Apple Inc. that is investing many resources conducting research and development in the technical world. Internet has been able to open up several avenues for organization to market its products and communicate directly with the potential clients. Moreover, most competitors are increasingly using technology to improve their efficiency, communication skills, and reducing both organization operation cost and that of the clients. The corporation needs to address issues relating to privacy and security of confidential information given by the customers (Hunnicutt, 2009, 177). With CSR, the corporation is guaranteed of improving its technological capabilities that would ensure enhancement in organizational performance and customer relations. The corporation should consider embracing technology as a platform for improving the social welfare of the clients and acquiring the specific needs of the clients. As a result, the organization will not have to spend many resources exploring the market and conducting market research studies to establish the specific needs of the clients. Furthermore, technological advancement in the products would assist in reducing the stress among the clients especially those associated with products that wear and tear easily. Conclusion Corporate social responsibility (CSR) plays an integral part as an initiative in matching the needs of the customers with organizational objectives. The CSR models often refer the organization to take the responsibility of conserving environmental value and social wellbeing of the stakeholders. Moreover, the concept goes beyond the requirement of the organization in relation to compliance with state laws. Consequently, the concept involves incurring short-term costs that might not provide immediate financial benefits to the company, but rather promote social and environmental changes. CSR is the key to winning the consumers with most business entities aligning their activities towards strong loyalty programs and friendly shopping experience. As a result, CSR is becoming a program of mainstreaming organizational activities and a forward thinking mechanism for sustainability of business operations to create shared values for both the business and opportunities. Sustainability is much more important to both the people and planet: it is also crucial to business success. Communities are grappling with numerous problems that are global and structurally multifaceted. Technology has played an important role in enhancing global connectivity and enabling advocacy for social perspectives. In addition, the millennials play an important role in redefining the importance of connecting and giving back through effective and reliable social activities. CSR also involves the organizational commitment to developing policies of integrating responsible activities into daily business activities and implementing them with an aim of increasing customer loyalty. References Carroll, A. B., & Buchholtz, A. K. (2003). Business & society: Ethics and stakeholder management. Mason, OH: Thomson/South-Western. Gamble, J., & Thompson, A. A. (2009). Essentials of strategic management: The quest for competitive advantage. Boston: McGraw-Hill Irwin. Gates, B., & Rogak, L. (2011). Impatient optimist: Bill Gates in his own words. Chicago: B2/Agate Pub. Hopkins, M. (2003). The planetary bargain: Corporate social responsibility matters. London: Earthscan Publications. Hunnicutt, S. (2009). Corporate social responsibility. Detroit, MI: Greenhaven Press. Lawrence, A. T., Weber, J., & Post, J. E. (2004). Business and society: Stakeholders, ethics, public policy. Princeton, NJ: Recording for the Blind & Dyslexic. Mobley, S. J., & National Legal Center for the Public Interest. (2004). Capitalism and corporate citizenship: Profiles of American business in global markets. Washington, DC: National Legal Center for the Public Interest. Thompson, A. A., Strickland, A. J., & Gamble, J. (2008). Crafting and executing strategy: The quest for competitive advantage, concepts and cases. Boston: McGraw-Hill/Irwin. Vogel, D. (2005). The market for virtue: The potential and limits of corporate social responsibility. Washington, DC: Brookings Institution Press. Zu, L. (2009). Corporate social responsibility, corporate restructuring, and firm's performance: Empirical evidence from Chinese enterprises. Berlin: Springer. Read More