Views of Corporate Social Responsibility - Coursework Example

CORPORATE SOCIAL RESPONSIBILITIES Student’s name Code & Course Professor’s name University City Date Introduction Corporate social responsibility has emerged as an imperative aspect in the contemporary business environment. Its incorporation has seen the development and conformance to the societal needs in various constructs. Arguably, it has enabled organizations adhere to ethical and moral conducts throughout the business. Simply put, the 21st-century business environment necessitates conformance to CSR approaches given its realized benefits. While the concept of CSR presents to the general belief of the modern organization to the extent its responsibility, two important views are considered: classic and socioeconomic. Whereas these views hold different perspectives, this paper confronts, they contributes to the significance of CSR. Definition of CSR Historically and up to date, the concept CSR face debates concerning its definition either academically, in businesses or society. CSR determines how institutions manage challenges concerning financial crisis, global warming and human rights enforcement (Dahlsrud, 2012). The European Union Commission defines CSR as the responsibilities of businesses enterprise and their impacts on society (EU COM, 2012). The CSR has transformed from a voluntary private entity into an integral part of corporate business citizenship. With EU definition, it is understood that business organizations integrate social and environmental concerns through interactions for the purpose of collective bargains with companies either voluntarily or corporate citizenship. In my opinion, CRS can be defined as an efficient business through production and distribution of wealth/assets with the beneficiaries being managers and stakeholders. It requires ethical systems that are effectively implemented, integrated and practising a suitable management system. Currently 46% of executives still believe there is enough room for improvements concerning CRS definitions (Masaka 2012). VIEWS OF CORPORATES SOCIAL RESPONSIBILITY The classical view The classical view of CRS entails institutions and responsibilities. Society has various institutions with which each institution have locative functions. Efforts are attributed for economic purposes rather than social interests. The people within society have responsibilities and not the business hence the business is not expected to reflect the characters of human beings. With responsibilities, the businessmen and CEO are in focus. The corporate employs the individuals expecting them to make enough money as possible. Managers are expected to secure enough profits and excess collection of revenues though the executive is expected to act on their own will outside the business area, since they will be using their own money & time. The axioms behind profitability, managers make choices that yield more profit than those yielding less (Jamali et al 2012). The classical views of CSR focus in providing goods and services which through maximization of profit within the legal framework is enhanced. If the executive behaves in a social responsibility way, it is not the interest of employer because manager acts as a principal and not agent. Classical view advocates that executives make a decision on spending resources for social purposes as being the duty of civil servants. If the executives perfume the duties of a civil servant, then companies will allocate the availability of limited resources based on political mechanism and not market mechanism. If CSR is taken seriously in society, it widens its scope to political intervention focusing on all activities of individuals in society hence undermining the political principle of market mechanism that is unanimity. In my opinion, if organizations express the classical ideologies of corporate social responsibility, the constructive structures of free market system will be hindered by a control system in central Government which will determine prices and wages from commodities and services rendered. The classical views stakeholders as a very important entity to CSR. The stakeholders bring money into the organization and employs managers to maximize their profit (Bitcha 2012). The managers work hard to pursue the interests of stakeholders through a technique known as managerial capitalism. The shortcomings of working in the interest of stakeholders, as per the stakeholder’s theory, the stakeholders provide the managers with flexibility chances of opportunities within working organization to invest in their favourite project which in long run will destroy the firm company values without proper needs for justification. To achieve an even distribution of resources, the state apparatus manage the interests of society need in a caring way while managers should come up with structures that are valuated to interests of shareholders. The classical practice of CSR put companies to a limited situation whereby it’s only the profit making agenda that makes the company run. The agenda contributes to failing of big companies having a motive of making money only. A good example is Wal-Mart Company which had interests in maximizing profit making through child slave labour, breaking of environmental law and exploiting the weak formed labour law, the thwarts union (Hancock 2012). Using enough funds from its profitability the company, the company managed to curb protesters from protesting on humanitarians services within the institution. Classical CSR attributes to individualism. The methodological individualism specified that individuals increase personal satisfaction. The system limits social activities which uses costs and reduce profits within the organization. Various weaknesses are pinpointed regarding the model. Efficiency and profitability of the organization occur when managers respond to the individual interests rather than the interest of shareholders, the financial interest of the company is not injured, and the social activities does not necessarily reduce profitability. Activities like team building management and various outdoor activities increase the productivity of employees. The making of rational and irrational decisions puts the system vulnerable (O’Fallon et al 2012). The government can’t oversee the rational behaviors of human beings and protect the consumers all the time. The government legislative body cannot move as first as market consumers in decision-making. The laws governing the institutions are they well spelled? Promoting the ethical value and social activities does not necessarily mean the economy status will depreciate. Socioeconomic view The socioeconomic view improves the suitability of classical CSR. Socioeconomic view works far much better from the profit making agenda to improving and protecting the individual’s welfare status in society. The rational responsibility behind the approach is to make sure the employees, customers, and any shareholders welfares is promoted to a better level. Social activism in the approach designs the firm to adopt the socioeconomic view that will be of full benefit to all community members even if the group impacts the company negatively or positively. The most known corporate functioning responsibilities like economic, legal, ethical and philanthropic are all linked to corporate social processes in terms of management in either environmentally, stakeholders and issues management. The social responsibility of the executives works hand in hand to boost with financial responsibility. In this aspect, the social responsibility improves the financial performance of companies. Social responsibility not only boost the company financial status, but it also contribute to the outstanding image of the company, improves the prices status that at a long run makes enough profit. Companies like Wal-Mart and Air Asia display the technique by branding its image well and offering quality services like fair commodity prices hence attracting more customers (Hancock 2012). Training of its employees through team building has improved the supply chain system that has attributed to quality performance in business minimizing losses. The socioeconomic view does not focus on individualism. The social responsibility is advocated for all members within the organization and in case of repercussions all members are accountable to named challenges. Public opinions are picked to measure the performance of the company and foresee the government not to enforce strict laws in organizations since the public is involved. The stakeholders at this phase are viewed differently. It is with the expectations that the stakeholders should not be treated by means of end approach. The involvement of stakeholders in every approach will determine the company future directions. The principle corporate rights govern the managers not to make decisions that only determine their future interests but need to involve bodies that will make effective decisions for society benefits. Since managers give directions to employees, the outcomes from employee’s performance will be reflected in the manager’s responsibility in terms of the principle corporate responsibility. To facilitate new structures of stakeholders management then a revised board of stakeholders directors and new cooperate laws are to be positioned. The paradigm shift from the classical system is due to society dynamical changes. Social conflicts and complicated coordination issues cannot be solved by government alone. Therefore, it led to abandoning the earlier system. Adopting the system, the corporations are easily motivated in various segmentations. The system advocates for legal perspectives whereby the stakeholders can sue managers if by any chance the decision-making procedure went through without them being involved procedurally (O’Fallon et al 2012) Wealth of shareholders maximization objectives is stressed. In this regard, companies remain accountable to its shareholders. Little attention should be focused on ethical dimension and only if services rendered are within the legal stipulation. Wider scope of society interest should be on focus. To ensure sustained legitimacy, the managers work with stakeholders who realign the company functions with the interest of stakeholders and expectations. Various challenges are seen using the system. An example of this is the Australian Shareholders Association whereby the stakeholders stop companies from offering relief services to tsunami challenges with it stressing no services are rendered without expecting something back (World Vision Australia 2012). In addition, the relief services will reduce companies profitability achieved through dynamics like competition. Various critics criticized the approach claiming that the majority of the company have been huge financial beneficiaries after the companies offering relief pledges and services. In addition, the donations rebrand the company image, attracting more customers with much loyalty. If any company embraces the socioeconomic CSR strategy, then its motives should not only focus on economic performance, but also on environmentally and social performances. Currently, more training are offered on how to implement the socioeconomic CRS in most leading companies and how the achievement is done with respect to globalization. Globalization has helped in empowering individuals with enough knowledge especially in the business field, whereby if any decisions are made, then all the departments are involved either to critic or adopt the new systems for companies. Conclusion Conclusively, the globalization is leading in systems changing in respect to ideology development that is transforming the management of companies. The transformations have a positive impact both on organization and society in a wider scope. A good example is how information leaked out in Wal-Mat Company on its irregularity services. CSR should offer integral and equity in their services and products. The firms are therefore expected to approach the new concept with more openness in their operations and stakeholders to be equipped with skills on how to come up with effective decision making that are of huge benefits financially and economically. To ensure strategic sustainability, companies should embrace stakeholder’s theory that is more useful to current society. Stakeholders theory shapes companies on how to come up with effective business practices and currently, recommendation are that companies should adopt the new CSR method known as socioeconomic view that improves the dimensions of classical CSR. References List Constantina Bichta. (2012) Corporate social responsibility, a role in government policy and regulation. Centre for the study of regulated industry. Dahlsrud, A. (2012) How Corporate Social Responsibility Is Defined: An Analysis of 37 Definitions. Corporate Social Responsibility and Environmental Management. Dima Jamali and Ming Chien. (2012) Drivers of Corporate Social Responsibility Attitudes: The Demography of Socially Responsible Investors. British Journal of Management, Vol. 22, 305–323 (2012 European Union Commission. (2012) Corporate Social Responsibility: A New Definition, a New Agenda for Action. MEMO/11/730. Brussels, 25, October, 2012. Hancock, J. (2012) Introduction: why this subject? Why this book? In J. Hancock, ed., investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning and the UK’s Leading Companies, pp. 1–4. London: Kogan Page. Masaka, D. (20112) Why enforcing corporate social responsibility (CSR) is morally questionable”, Electronic Journal of Business Ethics and Organizational Studies, 13(1), 13-21. . O’Fallon, M. J. and Buttered, K. (2012) A review of the empirical ethical decision-making literature: 2006–20011, Journal of Business Ethics, 59, pp. 375–413. World Vision Australia. ( 2012) Journal of Asia Tsunami Disaster , World Vision Response. Read More