Corporate Social Responsibility is defined as the consideration made by companies for the interest of the society in which they operate and involves taking responsibility by the company for the impact of a company's activities to the customers, employees, shareholders, communities, stakeholders and the environmental concerns resulting from its activities. It becomes an obligation extending beyond the laid statutory obligation prerequisites. It aims at improving the social status of those people that are in contact with the company (Crane et al 2008).
Corporate social responsibility involves working in partnership with other organizations or groups. It is a form of strategic management, aimed at encouraging the organizations to do over and above that which is beyond their mandate (Kytle 2005).
Milton Friedman missed the essence of corporate social responsibility in that he only sees it from the narrow perspective of the organization and not through the lenses of the society from which the company derives profits The fact that this organization has meet the statutory requirements and is engaged only in scrupulous endeavors does not necessarily mean a social concern which is a broader concept that seeks to touch a wider society and it is not just about business ethics.
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Any serious organization should have a strategy to give back to the society from which it earns her profits, however corporate social responsibility may be of different forms. It could be through trainee programs where they consider graduates who are in an almost saturated job market after the training they can be considered for jobs in these companies.
The most common approach of Corporate Social Responsibility is the provision of aid to organizations that are locally based including the impoverished populations in the countries that are developing. However this approach, does not necessarily equip the locals with the requisite skills as opposed to the community-based development which assures sustainability.
Friedman says that it is only individuals that have a social responsibility and not organizations. I believe a good corporate social strategy may improve sustained profitability to the advantage of the business. I thus believe that it is an important ingredient of an organization's success and should be included in the corporate strategy. The adoption of good CSR strategies can open doors for new market opportunities and bring other benefits that includes a reduction in cost, improved public perception and better business opportunities (Grayson 2004).
Those companies that voluntarily take the initiative have the capacity to convince governments and the public at large that they are getting hold of issues like, diversity or environmental management and may avoid further securitizations. Most firms that make super profits including exorbitant boardroom salaries apply such methods. On the other hand companies that operate overseas away from the home country strive to endear themselves to the host country by extending good citizenship through comprehensive and better labor standards and environmental impact assessments. This may raise their reputation with governments or with the citizenry. Critics of corporate social responsibility have legitimate concerns as to the hypocrisy and insincerity that is the driving force for organizations that engage in these projects and says that this is not a panacea to problems that bedevils the locals and suggests that governmental, international regulation and enforcement is paramount and that instead of utilizing voluntary measures it is necessary to ensure that companies must behave in a socially responsible way even if they will result to acts of philanthropy. Read about Wegmans Social Responsibility
Another aspect of corporate responsibility is through giving information to the locals to prevent vices that are deeply embedded in the society such as drug abuse and other forms of delinquency and by so doing the company is able to change the society for the better. Though corporate social responsibility is important that there be a thorough vetting to ascertain company's motives and thus take what is good for the society and this should not be a shortcut to assume the existing rules. It is thus a necessary evil.
List of References
Bhattacharya, C.B., Sankar Sen and Daniel Korschun (2008), "Using Corporate Social Responsibility
Crane, A., et.al.: The Oxford Handbook of Corporate Social Responsibility (PDF), Oxford: Oxford University Press.
Grayson, D. and Hodges, A. (2004) Corporate Social Opportunity! Seven Steps to Make Work for your Business
Habisch, André; Jan Jonker, Martina Wegner, R. Schmidpeter (eds.) (2005). Corporate Social Responsibility across the Europe. Heidelberg: Springer.
Kytle, Beth; John Gerard Ruggie (2005). "Corporate Social Responsibility as Risk Management: John F. Kennedy School of Government, Harvard University. Retrieved on 2008-03-07.
Orlitzky, Marc; Frank L. Schmidt, Sara L. Rynes (2003). "Corporate Social and Financial Performance: A Meta-analysis" (PDF). Organization Studies 24 (3)
R.H. Gray, D.L.Owen ; K.T.Maunders,(1987)Corporate Social Reporting: Accounting and accountability (Hemel Hempstead: Prentice Hall,
Williams, Cynthia A.; Ruth V. Aguilera (2008). "Corporate Social Responsibility in a Comparative Perspective",
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