Is Corporate Social Responsibility Just a New Trend or Is It the Modern Business Modus Operandi - Essay Example

Is corporate social responsibility just a new trend or is it the modern business ‘modus operandi’? Introduction Among the most interesting developments in the corporate world is the departure from traditional rigid business practices to accommodate an evolution that introduces a revolution taking interest in human resources within and outside the corporation. Traditional practices experiencing such exodus of thought and philosophy include the famous departure from personnel management to human resource management. Principle measures to revolutionize the corporate practice have similarly been introduced with regard to public relations segment (Freitag 2008, p37). The author reckons that the best practices in modern business, variably referred to as “dominant coalition” play an important role in the identification of the appropriate combination of practices such as a strong and informed management. Great strides have taken place in ensuring that contributions in the social process are central in the definition of corporate goals. Corporate responsibility has therefore evolved to accommodate corporate social responsibility, which is more responsive of the social needs of the workforce as well as the surrounding society. Making the needs of the society an integral part of wealth creation in the modern corporate world shapes business at the highest community involvement level, by responding to social process in a sensitive approach. In this discourse, corporate social responsibility (CSR) is analyzed in terms of its modern and future usage in the corporate world, paying a special interest on its origins, applications, approaches, and interpretation. Flanked by a clear view of its impacts on decision making, the discourse ends by making inferences from the various perspectives (Money 2007, p1). In view of the basic observations contained in the paper, it is clear that CSR and its related business applications in the corporate world is perhaps one of the most dynamic machineries at the disposal of management. Background Information CSR can be traced back into the 1960s as a modification of corporate responsibility, which was an approach taking a corporation’s business targets off the usual and direct business players. In light of the roles of the philosophy behind establishment of CRS practices, it is clear that business objectives had to be shifted from purely business nature to incorporate some social aspects. According to Salzmann (2008, p8), contribution from scholars in the 1960s gave momentum to the CSR field as an emerging discipline in the corporate environment. The author reckons that the Bowen and McGuire through their contributions on the issue of employee treatment at the workplace must have spanned and stirred an important phase of corporate relations. The responsibilities that the corporation had with regard to the community as a central stakeholder were considered. Despite the general overriding objective of a corporation to perform and deliver results in the carrying out of business activities, companies were now identifying their contribution to the social process as incidental to winning an enabling environment from the social setting they operated in. major developments were taking place in the corporate world when companies began to go global and creation of overseas subsidiaries was proving to be a hard adaptation challenge. To counter the new market niche as a challenge facing the management, the social elements of the new environment were identified to be key in facilitation of the appropriate winning position establishment. The community and other indirect benefactors of the corporate establishment had to be introduced into the program on a benefit system through various corporate designed projects. CSR was on its development path with clear application that every party incidental to the performance of the corporation had to be brought on board. According to Kotler and Lee (2005, p4), the most appropriate application need to exercise CSR was to involve community development projects. Corporations sponsoring major projects to win the acceptance from the environment as well as the business community in order to facilitate the appropriate positioning were the best approaches to handle the society. The authors (p8) suggest that the realization that replacement of mere philanthropic contributions to social and community development issues with more responsive programs soon emerged. Incorporation of such contribution into the overall management setting that a corporation has was the best approach that the responsibility needed to fit into the business environment. In 1990s, these practices were fully entrenched into the corporate objectives across corporation types, with the inclusion of local corporations as well. The difference between the traditional form of responsibility and the current one is merely in the corporate definition and philosophy with regard to the approach and position it had occupies in the overall corporate objective design. Traditional format included little emphasis and connectivity to corporate culture, while the evolved format integrates the framework of corporate responsibility into the corporate management strategy (p9). Theory on Corporate Social Responsibility According to Mruthyunjaya (2011, p152), continued definition of the corporation identified three basic spheres namely, social, production and corporate. In order for the management to enhance the outlook and approach that the corporations needed to consolidate the three spheres, a balance was needed towards ensuring that all the objectives are covered. Traditional corporate culture emphasized on achieving production and corporate establishment spheres at the expense of the social sphere. Revolutionalizing the corporate setting had to facilitate a sustainable balance that would incorporate the third sphere in a world that steadily embraced a more sensitive social order. Corporate discoveries had, immediately before corporate social responsibility, manifested the strength of keeping in touch with social issues within the corporation. Profound results had been forthcoming from the application of social tools within employee output management, such as human resource management. Extrapolating the same social impact across the community development issues that the corporation had capacity to chip in came in as an important area of interest to cover the social sphere (Hazlett, McAdam and Murray 2007, p670). According to the author, embracing wealth generation is the basic corporate obligation and ensuring that the neighboring communities were empowered to facer their challenges through specific projects could not be more than timely. CSR relationship with Business and Ethics Organizations in the modern world have to keep in touch with the complexities experienced in the social sector, with expectations of handling the complex social issues that the corporations have. According to Sims (p72), handling all the stakeholders’ issues in a conclusive manner is the ethical standard of responsible corporations. According to the author, major developments that have taken place in the modern world can be said to have an empowering capacity to the employees and communities regarding social rights. According to Freitag (2008, p38), both the inner and outer contexts of the corporation’s environment must be well represented in the CSR policy design. In order for the companies to respond to the impact of the developments in the social circles, it has increasingly become necessary for them to develop stakeholder’s inclusion into the corporate process in an ethical framework. It follows that the corporate social responsibility debate has taken centre stage at the corporate field to act as a yardstick to define ethical grounds of actions. In view of the magnitude of the developments of social expectations from the stakeholders, corporations include their policies and responsibility approaches in their programs of service delivery. Stakeholders with regard to the corporation have included the communities around the corporation’s dealing, effectively interpreting responsibility over the stakeholders to include the community in interests’ satisfaction. The reason for meeting the social interests is due to the fact that the major philosophy of beneficiaries of corporate productivity is the stakeholder segment (Guarnieri and Kao 2008, p34). Therefore, redefining corporate stakeholders automatically includes the social element of the society attached to the corporation in its operations, sometime including other communities remotely involved in the corporation’s interactions. Ethical considerations would therefore mean that ignoring the segments of stakeholder interest would translate into a great breach of interest satisfaction, bearing in mind that satisfaction is a productivity yardstick. Aspects of CSR Generally acceptable usage of the abbreviations to denote corporate social responsibility is CSR instead of C.S.R. Broader meaning within the context of corporations’ undefined responsibility over the society introduces various aspects from which it can be handled. On one hand, the corporation considers meeting some of the social responsibility it has over its employees which has seen the creation of an entire department handling human resource issues in a wide scope. On the other hand, there is the considering the responsibility that the corporation could be having over the community in terms of assisting or extending the philanthropic obligation that the community development needs for improvement of life. Aspects of the social roles of the corporation from an integrated and coordinated perspective makes CRS an area that little controversy exists since the corporation and its stakeholders would need to feel appreciative to the business culture and the enabling environment at some point. Deliberations on the aspects of CSR also include the basic aspects of value to the main corporation. The corporation may involve corporate social responsibility for the overall objective of improving value on behalf of the stakeholders (Enquist, Mikael and Per 2006, p188). Top on the aspects and benefits include value creation at the helm of the corporation’s marketing strategy which targets the social responsibility that it has to the appropriate interest parties. From the main applications of meeting the interests of the stakeholders, aspects of CRS will address value principle to resolve issues such as customer’s access to the corporation’s products. Identifying with the customer’s needs enables the corporations to handle the delivery process to facilitate the ease with which the laid down logistics assist the customers to access the products. To allow delivery facilities to enable the realization of the objectives of the corporation in creating wealth and meeting the customer’s interests, the corporation would consider spending towards meeting some of the missing facilities, despite the agreement that it is the responsibility of the government to facilitate such facilities. For instance, delivery of products to a remote locality would be made difficult by lack of transport which would be taken up by the corporation to ensure that the customers obtain the products on the corporation’s cost. This would happen despite the general realization that the government should be responsible for the creation of the appropriate transport facilities. Going a notch higher, the corporation can decide to offer other facilities that it does not have a direct benefit from, such as building of health facilities, electricity supply and other public amenities. From such an aspect, contributing towards the customer’s benefit would translate to the multiplier effect that would finally trickle down to the benefit of the two parties. In the long run, customer loyalty and good relations would translate into realization of better sales volumes. Acceptance by the community to continue operating in the market is important in the overall coexistence between business and communities. CSR Standards against Social Needs An effective CSR is responsive of the society in which it makes contributions to. As such, it becomes sensitive of the actual needs of the community on the ground. Since the philosophy behind CSR is intended to make contributions that solve unique challenges in the society, a flexible policy structure is expected across the corporate environment. According to Fombrun (2005, p9), there are general guidelines adopted all over the globe to facilitate the growth of an appropriate CSR approach in business. Among some of the commonest standards set across countries include use of labels such as the Max Havelaar’s in Europe as well as Fairtrade label. Besides, countries have adopted standardization accreditation to indicate that they operate with the best interests of the community as their core business. Alternatively, legislation has been put in place to facilitate the best corporate philosophy that allows businesses to consider the society in fair business dealings (p10 Clarity and Support and Future of CSR It is clear that every corporation feels obliged to participate in some of the community’s needs in various ways as identified in the approaches section. Despite the intricacies that this field was experiencing before the new business mentality and philosophy was established, there is a general perception among the corporate fraternity which is to emphasize on the importance of the human aspects in dealing with the employees and the customers. Other business culture aspects that this trend has caught interest in include the human resource management that now facilitates business through building of capacity from within capability context. By enhancing the ability of the employees and the community, which forms part of the clientele base, business strategy is easy to be modeled from the satisfaction approach. Besides involving social responsibility ion the strategic positioning as a routine, the modern corporation intends to create a competitive edge over its competitors. Public relations issues come into the forefront with such importance that the needs and interests outside the business context are considered and included in the business strategy. Support from the appropriate departmental authority within the corporation is very forthcoming in the current business mindset, which places human resource at the forefront. In light of the capacity enhancement and expansion that the CSR discipline introduces to the corporation, it is predictable that the future of more community responsive corporate practice is already defined. Apparently, it can be predictable that the customer and the needs outside business context will bear more meaning in decision making at the helm of the corporate management in the future. Despite the extra cost element that CSR will continue to carry due to the challenging nature of social needs in the social quarters, it is expected that business will be determined by the level of customer, employee, community and environmental contributions made by the corporate players. CSR Approaches Various approaches are employed to ensure that the CSR package remains responsive of the actual needs of the community on the ground. In light of the research and information collection regarding the corporations’ needed input in certain areas of community issues, the most appropriate approach or machinery will be employed. Several corporations would identify unique challenges that the community faces and identify the appropriate tool or approach to employ in meeting the actualization of the project. It is not necessarily the trend that the projects take place in the locality where the corporation exists, particularly considering that major CSR projects are undertaken by multinationals (Allen and Husted 2006, p840). However, the most important part of CSR is the identification of a community need in order to formulate the appropriate approach to that end. The commonest approach involves corporations’ use of philanthropic projects such as direct donations into the community’s causes. Corporations design philanthropic projects to uniquely cover some of the problems facing the community, ranging from direct cash donations to aid in some disaster hit communities such as those in developing countries. Needy students may benefit from scholarships designed by a corporation’s CSR program. Alternatively, incorporation into the major business strategy and policy framework is another approach utilized today. In a variety of such needs, there are several other ways to implement CSR objectives. References Allen, D. B. & Husted, B. W. (2006) “Corporate Social Responsibility in the Multinational Enterprise and Institutional Approach,” Journal of International Business Studies, vol. 37 no. 6 pp. 838-849 Enquist, B., Johnson, M. & Per, S. (2006) “Adoption of Corporate Social Responsibility- Incorporating a Stakeholder Perspective,” Qualitative Research in Accounting and Management, vol. 3 no. 3 pp. 188-207 Fombrun, C. J., (2005) “Building Corporate Reputation Through CSR Initiatives: Evolving Standards,” Corporate Reputation Review, vol. 8 no. 1 pp. 7-11 Freitag, A. R. (2008) “Staking Claim: Public Relations Leaders Needed to Shape CSR Policy,” Public Relations Quarterly, vol. 52 no. 1 pp. 37-40 Guarnieri, R. & Kao, T. (2008) “Leadership and CSR- A Perfect Match: How Top Companies for Leaders Utilize CSR as a Competitive Advantage,” People and Strategy, vol. 31 no. 3 pp. 34-41 Hazlett, S., McAdam, R. & Murray, L. (2007) “From Quality Management to Socially Responsible Organizations: The Case for CSR,” The International Journal of Quality and Reliability Management, vol. 24 no. 7 pp. 669-682 Kotler, P. & Lee N. (2005) Corporate social responsibility: doing the most good for your company and your cause. Hoboken, NJ: John Wiley and Sons, Inc., Money, K. (2007) “Are CSR and Corporate Governance Converging? A View from Boardroom Directors and Company Secretaries in FTSE 100 Companies in the UK,” Journal of General Management, vol. 33 no. 2 pp. 1 Mruthyunjaya, H. C. (2011) Knowledge management. New Delhi , India: PHI Learning Private Ltd., Salzmann. O. (2008) Corporate sustainability management in the energy sector: an empirical contingency approach. Wiesbaden, Germany: GWV Fachverlage GmbH Read More