CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility

Corporate Social Responsibility

Introduction

Most of the companies are starting to recognize that they have a wider responsibility to the communities within which they operate. Research has shown that by implementing social responsibilities, a win-win situation can be achieved between the company and its stakeholders. Corporate social responsibility is not solely about doing the right thing, but it also offers direct business benefits. Having a reputation as a responsible business places a halo over organizations, because many consumers prefer to buy from ethical businesses (i.e.: business to business, business to supplier, business to customer). Moreover, a good reputation makes it easier to recruit good employees as well as reduces the risk of sudden damage to reputations and sales.

Body: Discussion and Analysis

It is said that there are two kinds of responsibility in a company - commercial and social. Commercial responsibilities involve running a business successfully, generating profit and satisfying shareholder expectations. Social responsibility on the other hand is being aware of the issues being presented in the community and the working environment. CSR is not a new concept. Some companies have always acknowledged a "wider responsibility towards the community". Such activities in the past have tended to come under "paternalism" and "philanthropy". However, as Richard Welford suggests that corporate social responsibility tends to be much more far-reaching than paternalism or philanthropy. He states that "social responsibility requires us to look at ethics, stakeholder accountability and also our own value systems".

In order for a company to be a socially responsible, they must hold a strong belief for ethical decisions and behavior. Normative ethics uses several of styles to describe the values for directing ethical decision making. Researchers have identified that four of these styles are relevant to managers. They are the utilitarian approach, individualism approach, moral rights approach and justice approach. The approaches require an organization to be just and moral in its methods, in order to produce and promote "the greatest good for the greatest number". CSR takes on this positive approach. It allows the company to satisfy more of its stakeholders if CSR is adopted by the organization. From a social responsibility perspective, organizations view their internal and external environment as a variety of stakeholders. A stakeholder is anyone who has a stake in the organization's performance. They can affect or get affected by the company, so it is very important to keep them in mind when a company makes its decisions. Without them, a company is nothing more than an "inanimate collection of assets and liabilities". McWilliams and Siegel categorize the demands from multiple stakeholders into two main groups. The first one is the "ultimate group" which consists of demands from consumers, employees and suppliers; and the second is the "penultimate group" which is demand from other stakeholders such as the government (Hartman, 2011).

A company should treat all its demands seriously, regardless of which group has brought it up. When a company is confronted by a specific social demand, it is very important on choosing ...