Corporate Social Responsibility in Malaysia - Case Study Example

Corporate Social Responsibility Title Name Class Affiliation Date Corporate Social Responsibility (CSR) is also known as social performance. It is aimed at attaining sustainable business is a form of corporate activities that are incorporated into business plans. The main aim of CSR by the company is to be responsible for its action and draw up positive impacts by conducting activities that influence the public as a whole, customers and those who have shares in the company. Companies also conduct CSR so as to maintain healthy economies, markets and communities and by this build a sustainable business, (Abdul 2011). The key drivers of CSR are always to contribute to the physical infrastructure and social capital in order to gain trust from the public. Most people will tend to trust a company according to CSR it conducts. A company also becomes transparent with its plan when it conducts CSR. The public can then know where such a company is heading in terms of performance, (Jonunq & Malhotra 2007). There has been an increased public expectation from the public for business. The public expect Companies and Corporate not to merely make profit and provide job opportunities but also conduct CSR. A company that conducts CSR is unlikely to be doubted by the government as well. When the government trusts a certain company then, more rights are given to it to produce goods and services. There are various benefits that accrue from CSR. Companies can aid to recruit and retain human resource simply by conducting CSR especially in a competitive market. Usually, when applicants of job get a job application they will more often look at the companies CSR. CSR also helps to improve how its staff perceives the company. When a company conduct CSR, it build its image as well as reputation, many companies will conduct CSR for the purpose of brand differentiation in a crowded market, (Maccarrone 2007). When a company conducts CSR it persuades the public and the government that it is taking health issues and safety of the environment seriously therefore attracting public admiration an aspect that increases the size of its target customers. CSR is also form of contribution done by companies to the community through its internal business activities, investment into society and philanthropically acts and how it engages in the government policies. With time CSR is becoming indispensable in business practices and has received attention from the chief executive, chairpersons, and board that directs and the higher management teams of bigger international companies (Noer, Ewatt & Weiss 2008). They understand that a strong CSR program is an essential element in achieving superior practices of business and effective leadership. Majority of stakeholders have come to realize the need of CSR, to help in pressing economic issues. This is because activist group could target corporations that are not acting responsibly, socially, for their actions. The activist group could act through demonstration to such companies. Companies are now relying less on the Government to guide them and are hence adopting their own policies to govern themselves. They are also aware of how they should conduct themselves with regard to environmental factors. Customers make a decision on more social criteria rather than just quality of the product, (Maccarrone 2007). According to Ernest & Young (2002), ninety four percent of companies in Asia, Europe, North America and Australasia believe that the development of a CSR can deliver real business benefits. Despite these findings, however, only an extremely small percentage of these companies made progress in the implementation of the strategy. In the research conducted, it showed that CEO’s have failed to recognize the benefits that accrue from CSR, despite the increased pressure to include environment and social issues to their decision, (Wing 2011). The research showed that seventy percent of all consumers purchasing decision, with quite a number of investors and employees are affected by a company’s CSR. It is hard for any company to fail to recognize the effects that come along with conducting CSR. Despite this though, the research conducted showed that the majority of these companies are failing to recognize this. Gran, Ernest & Young (2002), however, state that CSR is a factor that determines the customer and client choice which unfortunately, companies choose to ignore. Companies assume this and fail to integrate the adoption of CSR and will be thus, left behind. For this reason, therefore, companies should utilize time and resources to conduct CSR, (Abdul 2011). The Malaysian government has played its leadership role and is taking the initiative to ensure that it is remaining competitive both economically and internationally. The government has formed a finance committee to handle issues related to corporate transparency and responsibility. The Malaysian public is enlightened about the product, and they voice out their demands in Rakyat Voice for better public amenities, as well. NGO has already been established in the country, to look into the environment issues, (Maccarrone 2007). Consumers know their rights, and they cannot be exploited in Malaysia. Malaysian companies have not ignored CSR. For these companies to archive success, they have to conduct CSR. This way they gain upstanding corporate reputation and goodwill (Holmes 1976). CSR in Malaysia has been conducted since 1991, and it is not new to organizations. In a research conducted, (Rashid 2002) it was found that the general manager of Malaysia airport is very committed to CSR and has received the Green Global award. Research also showed that chemical companies in Malaysia has incorporated CSR in their business activities and for this reason are recognized as upstanding corporate citizen, (Maccarrone 2007). They do this so as to attain long term benefits for the shareholders. The Petrolia, gas factory has not been left behind, and conduct CSR which is more, education oriented through its distinctive CSR unit known as Program Bakti Pandidian Petronas (PBPP). Their education is based on mathematic to science benefiting the public and developing human capital for the country. The Telekom industry as well, is responsible for providing entrepreneur development by offering training programs for candidates that they select. The MBCB value the need for sustainable development, and environmental conservative and protection of the environment. They have been recognized internationally as, environmental green certification, for the construction industry for the development of today and the future. Malaysian companies know the effect of CSR, and not even the cement industry is left behind in conducting CSR. They ensure fair marketing practices, transparency and satisfaction of customers’ needs. The Alacom industry is responsible for recycling waste materials and this way they are able to both clean environment and also utilize the waste resources to something consumable. From the research, conducted it is clear that the Malaysian country has put more emphasize on CSR and many companies are practicing it. They know the benefit of conducting CSR and do not assume these benefits. The Faber group has gone to the extent of protecting human rights and has put up a sexual harassment policy so as to do away with the misconduct in the workplace. According to Carroll (1999), Malaysia is conducting CSR but has not reached the expectation of OECD. It needs to do more so as to get to that level. CSR is becoming indispensable to the developed countries, and for this reason, Malaysia should not ignore it. The CEO of the companies in Malaysia and the leadership team do not in any way view CSR as a responsibility that they should not conduct. Most of them do agree that CSR not only help build the public relation of the company and help the community, but it also increases clients trust. This leads to more profit in the long run. With increased awareness, more companies are coming up to incorporate CSR in their business activities. According to Paparassleio (2006) more enlightenment need to be done so as to incorporate CSR in companies. Governments, Universities as well as companies, should increase awareness by conducting educational programs. If people learn more about impacts of CSR, it is more likely that the attitude will change and hence more CSR will be done by companies. It is only through enlightenment that people learn the meaning of CSR and its impacts to the country, the company and the public. In a research carried out to investigate Small Business Enterprises, (SME) the owners agreed that any business should work to improve its community for its long run profitability. The percentage that agreed with this was 78.5%. 61% agreed that CSR interest shareholders. 71% said that providing products and employment are not the only responsibility that businesses have. A remarkably high percentage of 81 did not agree with the statement that social responsibility is theft to shareholders. This comes from the argument that managers are interfering with shareholders’ money. The owners of small and medium enterprises did not agree with this. They also said that business will be against more controlling of the economic systems by governments. Owners of SMEs need to be broad when making a decision and incorporate CSR. They all agree with the idea that CSR should be conducted by any business making profits. It is their responsibility to take care of the environment. When business conducts CSR they are not getting into charity, but they are simply giving back into the community. They are simply being responsible for implications that they either indirectly or directly did. In the Research that was conducted in Malaysia, it showed that the most influential factor of CSR was family upbringing. This means that managers that were brought up in a family that believed in corporate social responsibility were likely to conduct CSR. The other factors that influenced the CSR were ancient beliefs and common practices in the industry. Quite true that a country that conduct CSR is more likely to influence those countries that do not. If in a given country companies do not conduct CSR, then no company will think of doing so. If people believe that CSR has impacts on the economy and the company, then they will conduct CSR. Every business has the responsibility of conducting CSR in the community it exists. Corporations are entities that have a responsibility to the society. The argument that only people have a social responsibility is wrong. Corporations are registered as entities that have responsibility just in the same way that they can sue and be sued. The critic that business conduct CSR for they own commercial benefit is not true. As much as they may do that, they do so also for the benefit of the community and the public. Conducting CSR win consumers’ heart into thinking that the products they offer are ethical than others. These customers then practice ethical consumerism. Companies and corporations should start practicing CSR as soon as now. They should start by doing a CSR audit, and then look at the employment practices that it follows. The company should follow enlightened policy and recruitment. Then it should look at the marketing practices and whether it is meeting employee expectations. After this, it should look into the environment practices that are sustainable and responsible in regard to material and energy. Then the company should play an active role and constructive in the community. A reputable company should always benchmark and compare itself with other companies. Finally, a company should understand what it need by conducting CSR, and after that explain CSR to its external shareholders. With these then the company can celebrate its success by making it known to everyone. It should be made public. References Abdul, M. Z. (2002). Executive and management attitudes towards corporate social responsibility in Malaysia. Corporate Governance, 2(4), 10-16. Jonunq, M., & Malhotra, M. (2007). Corporate Social Responsibility. Attitude Towards Sustainable Development and Corporate Social Responsibility Among Future Business Leaders in Bannlore,India , 2(3), 16-27. Maccarrone, P. (2006). Factors Influencing the Attitude towards Corporate Social Responsibility: Some Empirical Evidence from Italy. Corporate Governance, 9(2), 2009. Noer, M., Ewatt, D. M., & Weiss, T. (2008, October 16). Can companies save the world? Should they even try? Corporate Social Responsibility. Retrieved December 23, 2008, from http://www.forbes.com/2008/10/16/corporate-social-responsibility-corprespons08-lead-cx_mn_de_tw_1016csr_land.html Wing , B. C., & Yap, K. L. (2011). Are Malaysian Companies Ready for Corporate Social Responsibility? Journal of Muamalat and Society, 5, 11-15. Read More