More Shortcomings than Advantages if Organizations Put Self-Interest First before the Stakeholders - Essay Example

College: Corporate Social Responsibility Introduction In any business setting, corporate social responsibility plays a significant role by helping the organization in achieving its goals, and visions for all stakeholders, including the shareholders and investors. However, some aspects such as employees working conditions, the society and the external settings of the organization require particular attention, as they are the basis of the success of a company’s CSR policy or program. The notion under corporate social responsibility exploits an organization’s potential to the outside world discouraging isolation and strictly basing on economic entities without considering social and ethical facets of a business (Agarwal 2013). In the past, businesses focused on working their way to the top over other competitors, surviving in the market and acquiring as much profit as possible; however, through corporate social responsibility, organizations now focus on integrating these things with the broader society to achieve their commercial goals (Carrol 1999). Reflectively, corporate social responsibility has developed over a few years with many companies gaining more interest as they also grow; however, most organizations focus more on this forgetting other essential factors such as social performance. Today, most of the organizations fail in achieving corporate social responsibility because they overlook the social performance aspect of it; instead, most leaders put all the attention on increasing income, profit and investments. Justifiable development is a factor that most organizations toil to attain and the variations in how they achieve this results from indifferences in meaning, period used, a company’s location and the foundation or background of the company (Windsor 2006). Corporate Social Responsibility is a promoter of sustainable development as it operates on international, cross-national and national grounds through the management and improvement of all associations of a business’ activities. This entails environmental, societal and obviously, the economic implications; additionally, it is through this factors that CSR creates a context for advanced partnership hence creating development. Most consumers look at Corporate Social Responsibility with a lot of incredulity believing that most of the organizations use it as a way of acquiring all the possible profits by manipulating people who believe it is beneficial to them. It is true that some of the corporations, mostly the insurance companies, have a reputation of using corporate social responsibility programs for their self-interests. This has instilled the believe that every business is out to make profits through the consumers no matter how much a certain company is committed to making the society and the environment better. Definitely, most managers and companies opt for corporate social development because it is profitable in reputation and development aspects that take place later; however, there is confusion between these two types of interests as perceived by the company and consumers (Peppas 2009). The difference lies in what a company’s CSR program bases on, as some of them solely focus on the financial returns; however, there are the other initiatives that insist on meeting public interests, making the environment better and gaining full consent of a consumer. Certainly, it is not that the companies that focus on these interests do not need the profits; typically, it is because they have the correct perception of the idea behind corporate social responsibility and the profits come as a reward. Resultantly, the variation between the objectives creates a natural tension between the organization itself and the consumers; simply because there is no balance between ‘doing good’ and ‘spending less’ in the modern world of business. The consumer is the most affected as they rely more on experience and the past rather than public interests and the future. Most organizations realize that implementation of standard corporate social responsibility should base on giving back to the society as a gesture of kindness; however, most corporate behaviour has negative social impact slowly draining the trust of consumers. Significantly, many corporate gurus certainly include CSR programs in the development of their companies and most of them entail serving public interests but their target is only private wealth. Today, there is the violation of employee and consumer rights through the corporate social responsibility programs that should act as pillar for the social impacts of an organization. However, this does not always originate from the organization as whole but on the management who take self-interests to a completely new level of personal interests. Corporate social responsibility initiatives today, fail due to a number of given factors but the main are the self-interests; evidently, it is through a company’s financial interests and personal greed that an organization does not succeed in meeting economic, legal, ethical and discretionally expectations of the society (Logsdon 2005). 2. Discussion In corporate social responsibility, a manager’s duties are all about ensuring that there is utter respect of rights and consideration of all parties; however, most of the modern day managers and other leaders overlook these factors, and in other cases, the shareholders or investors are the ones who put effort in attaining the social goals. This is mainly because the leaders’ focus is usually on how the organization may profit from the corporate social responsibility initiatives to an extent that they use them to protect and achieve their own personal interests (Matten 2003). When consumers or some stakeholders question the objective of the CSR, the leaders use their statures as a shield to avoid making the necessary alterations affecting both the consumers and the employees. Management plays a significant role in an organization on not only the sense of leadership but also supervision, control, observing employees’ rights and development of the company; as the top-level authority, initiatives such as CSR require a lot of attention, review and understanding to ensure that they succeed. Evidently, achieving and taking up such responsibility requires one to be familiar and adhere to the business ethics of conduct. Self-interests, whether personal or for the organization are secondary and even tertiary when compared to public needs hence they should not come in the way of the CSR (Lindblom 2010). In the past, most companies overlooked social corporate responsibility and those that took the initiative would stand out from the rest of the competition gaining consumer interest and using it to meet their needs (World Bank Institute 2007). During this time, it was not clear what CSR was all about due to the different theories explaining it; however, as CSR became a trend most companies adopted it leading to biasness and some companies used it to make profit and other interests to survive without consent of the customer. Plainly, it is clear that despite the fact that most companies had the idea of the corporate social responsibility very few understood its foundation and that its core impact should be on the society, not the organization (Carrol 1999). Assertively, there are two ways to Corporate Social Responsibility, one of them focusing on philanthropy and the other on rational self –interest; typically, perception is the key factor here as the organization’s and consumer’s understanding matters. The philanthropy part of CSR focuses on giving out to the society without expecting anything in return and the progressive self-interest is all about using ethical behaviour for business purposes i.e. using social needs to compete (Woody 2007). Altruism, as encouraged in CSR is essential because it reaches out to the society and the stakeholders become impressed because the organization is meeting its obligations. Generally, the best CSR strategy should put all the beneficiaries at the centre of the initiative to intensify transparency and culpability; however, as much as progressive self-interest is coherent it lacks accountability and leads to accusations. 3. Ethical Theories There are number of theories and principles basing on the ethics and morals of corporate social responsibility strategies and initiatives. This part covers two critical principles that give a unique approach to meeting social responsibility. The principle of Ability elaborates that it is significant that organizations use CSR strategies that focus on giving out to the society not only a gesture of gratitude but also because they have the power to do so (Alzola 2008). This theory/ principle emphasizes on the society utilizing organizational resources without it expecting any profits. The principle of contribution accentuates on unpremeditated and ethical responsibility of any organization stressing that in any situation where a consumer needs reparations by a company, no single factor should deny them their rights. However, organizations should not perceive corporate social responsibility as reimbursement but as a duty to the society; largely, most people are against this theory especially when applied in CSR but to an extent, it appreciates and encourages social responsibility (Viser 2010). The society within which an organization operates should also enjoy the benefits and resources of the organization just as they have devoted their resources to the well-being of the organization. 4. Conclusion In conclusion, it is clear that if the different organizations put self-interest first before the stakeholders, there are more shortcomings than advantages. The financial gains that the companies aim at achieving cannot compensate for the consumer’s trust and other critical losses. However, if the CSR strategies focus on philanthropy and meeting the social obligations, one can guarantee of organization’s improved performance, low costs of operation, customer loyalty, diversity among the employees among other essential factors (Bobby 2008). The consumers also need to take the CSR initiatives positively to work better with organization for the benefits of the community and the environment. 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