Discuss Critically the Extent to which you accept the Concept of Corporate Social Responsibility
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What does it imply to suggest that “business” has or rather takes responsibilities? Only persons can take responsibilities. A corporation is regarded as a separate legal entity and, therefore, can be viewed as an artificial person and in that view can possess artificial responsibilities (McCarthy, 2000). There exist a remarkable history related to the notion of corporate social responsibility (CSR).
Though some cases of Corporate Social Responsibility are evident in the mid-19th century, the concept of CSR originated in the 1950s after American corporations enlarged in power and size. Consequently, this produced a concern for their legality in a democracy (Kurtz, 2005). Corporate Social Responsibility developed into a rallying call for different sets of people demanding a transformation in American business during a period of massive social unrest.
Corporations and Responsibilities.
Even though corporations are predominantly business establishments operated to the advantage of shareholders, they possess numerous responsibilities to their customers, employees, suppliers, and to the society in which they are situated (Boatright, 1997). Many corporations are aware of these responsibilities and take thoughtful actions to accomplish them. Habitually, these obligations are stipulated in an official statement of corporation’s beliefs or principles (Ann, 1992). At present, CSR is a universal movement that is getting growing visibility and acceptance. The concentration for corporations presently is no longer on if to engage in CSR but how to effectively do it.
The Concept of Corporate Social Responsibility
The notion of CSR is frequently articulated as the voluntary undertaking of responsibilities that extend beyond plainly legal and economic responsibility of business organizations (Carroll, 1979). More precisely, CSR, is the identification of corporate objectives and the examination of effects not merely by the benchmarks of organizational well-being and profitability but by ethical values or standards of social interest. Corporate Social Responsibility has to conform to the corporate goals of getting a reasonable level of earnings (Carroll, 1979). It also it also implies a preparedness to sacrifice a certain amount of profit so as to accomplish noneconomic objectives.
Archie Caroll sees the concept of CSR as a four-stage continuum. His famous ‘Four-Part Pyramid Model’ of Corporate Social Responsibility constitute of Philanthropic, legal, ethical, as well as, economic obligations (Carroll, 1979). Outside legal and economic responsibilities lie ethical obligations, which are “extra activities and behaviors that are not necessarily classified as law but nonetheless are anticipated of corporations by society’s participants.” At the far end of the four part model discretionary duties (Carroll, 1979). These constitute of responsibilities that are not lawfully obligatory or even necessitated by ethics, but corporations take them to satisfy the expectations and the needs of the society.
Arguments against the concept of CSR
It should not be presumed that the concept of CSR receives complete backing. Milton Friedman maintains “the business of business is business…..business corporations sole social responsibility is to grow its earnings” (Hartman, 2004). Friedman also notes that sponsorships and contributions to charity and non-profit institutions are ‘profoundly subversive’ and not in the preeminent concern of the shareholders (Matten, 2007). Though the outcome of some corporate decisions may bring benefits to the society or employees, the choices by business firms may have been caused by legislations or supposed organizational welfares rather than a community conscience.
My support for the concept of CSR is to the extent that it is genuinely directed towards the welfare of the community. Several talks about CSR to be a public relations are schemes to avert thoughtfulness from the disparaging social concerns of corporate doings, and to prevent, more suitable government action.
Corporate Social Responsibility Activities
There exist a number of ways in which a corporation can decide to act responsibly for the benefits of the wider community. A few examples of such decisions are given below.
Product safety- It will be affected to some degree by legislation, but corporations may ensure more safety than the law necessitates (Weiss, 2009). Occasionally the safety is revealed in perceived greater quality, which increases the value that the consumer is alacritous to give extra payment.
Working state of affairs- It comprises of safety at work, which is similarly influenced by legislation that formulate minimum standards (Weber, 2008). Improved working conditions may draw and retain highly skilled employees hence improving the performance of the business organization.
Advantages of corporate social responsibility
Though CSR undertakings extend beyond the legal and economic obligations and may entail some sacrifice of returns, they are not indeed antithetical to corporate benefits and even the long-term lucrativeness of a corporation (Thompson, 2001). Corporate generosity, such as a contribution that improves the society in which a business is situated a better place to work and live, yields direct benefits. The goodwill created by socially responsible activities ensures easier operations and friendly operations of the business organizations (Drucker, 1974). It should therefore not be astonishing that the majority of prosperous corporations are also among the most socially answerable (Smith, 2003). Social responsibility and lucrativeness of firms can be enhanced concurrently.
Porter argues that many corporations erroneously view environmental legislation as a menace, something to be avoided. As an alternative he maintains, they perceive regulations as a clue that the corporation is not utilizing its resources proficiently (Weiss, 2009). The expenses suffered in eradicating environmental harms can be more than offset by other reserves and enhancements in product quality. Corporations should be inventive and not half-heartedly obeying their lawful requirements.
The most advanced corporations commendably employ CSR to guard their reputation and to advance and implement corporate strategy (Shaw, 2008). These businesses are seeing CSR more as savvy corporate-community immersion and less as philanthropy community initiative.
Companies in a free market have a responsibility to clean up any contamination they cause and not to pollute the environment (Matten, 2007). Corporations that follow only the moral minimum leave themselves exposed to stress from regulation by government and community. Organizations that acts in a socially responsible manner reduce external interference. Companies eliminate the expenses related to government regulations and keep control over their decision-making by paying attention to the well-being of the community (Monsen, 1979).
Corporations have grown so powerful and large that they are not successfully controlled by government regulations and market forces, as the invisible hand argument maintains (Weber, 2008). Some self-induced limit in the form of intentional assumption of more social responsibility is essential, consequently, for corporate doings to acquire the public benefit. Keith Davis mentioned that those who do not utilize power in a way the public regards accountable would lose it in the long-run (Davis, 1975).
In present day world, the question facing the corporate executives is not about the trade-off between profitability and social responsibility but to what point is engaging to CSR crucial for creating profit. In established markets, it is problematic for corporations, particularly those manufacturing primary products, to acquire a noteworthy, long-term competitive advantage. Though competitive advantage has numerous sources, a scheme that integrates social responsibility is one (Monsen, 1979). The significance of CSR as a basis of competitive is all the more imperative given the trouble in the present-day international economy of discovering any ways of distinguishing a corporation and its products from opponents.
Whole Foods is a suitable example of a firm that uses CSR to gain competitive advantage. The company provides backing to communities by donating 5 percent of its after-tax earnings to commendable causes (Alsever, 2006). The approach of Whole Foods offers a durable competitive advantage that rival companies cannot straightforwardly duplicate. Most big companies acknowledge a devotion to CSR and participate in a broad range of events in the conviction that they provide some competitive advantage.
. The argument and the meaning of CSR, have transformed intensely over the last fifty years. The spirited discussion over the normative case for CSR created a way to an acceptance and finally to a passionate grip of the business case. Currently, business organizations are engaging in CSR for a range of reasons. Some of the advantages include a constructive influence on reputation, improved shareholders relationships, vibrant and more accountable corporate governance and more trust and confidence within the investment society
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