Corporate Social Responsibility

In recent years, increasing number of customers and businessmen start to concern about the ethical issues in businesses. Although the main purpose of business is to make profits, the social influence of it also appears to be focused by a large proportion of customers and businessmen. Corporate social responsibility (CSR), which is closely connected with this concentration, was put forward in 1953 with the meaning of interacting social, environmental, and economic considerations into the decision-making structures and processes of business (Industry Canada, 2013). Although criticized, there is a business case for CSR because it could enhance customers’ loyalty, improve

Traditionally the business objectives of business were to maximise profits, sustainability, and shareholders’ value but after the advancement of stakeholder theory there has been a radical shift in the business objectives towards meeting stakeholders’ expectations in addition to maximisation of profit. Typical stakeholders of a company except shareholders are customers, employees, and suppliers. Today modern business objectives are to meet expectations of stakeholders as much as possible. Corporate social responsibility has emerged as a phenomenon that is born out of stakeholder theory.

The term ‘corporate social responsibility’ is still in popular use, even though competing, complementary and overlapping concepts such as corporate citizenship, business ethics, stakeholder management and sustainability are all vying to become the most accepted and widespread descriptor of the field. At the same time, the concept of corporate social performance (CSP) has become an established umbrella term which embraces both the descriptive and normative aspects of the field, as well as placing an emphasis on all that firms are achieving or accomplishing in the realm of social responsibility policies, practices and results. In the final analysis, however, all these concepts are related, in that they are integrated by key, underlying themes such as value, balance and accountability (Schwartz and Carroll 2008), and CSR remains a dominant, if not exclusive, term in the academic literature and in business practice. Just to illustrate how the concept is always evolving, CSR International, a non-profit organization, announced in 2009 the birth celebration of CSR International, an exciting new organization supporting the transition from what it called the ‘old CSR’ (Corporate Social Responsibility) or CSR 1.0 to the ‘new CSR’ (Corporate Sustainability & Responsibility) or CSR 2.0. Whether CSR 2.0 turns out to be substantially different

Corporate Social Responsibility (CSR) is something that affects all companies and should be an active factor in the company’s decision making. It is something all corporations need to care about. CSR is when business’ or corporations take part in an initiative or campaign for a cause that will benefit society and/or in some way make the world a better place (Taylor, 2015). Initially, Corporate Social Responsibility started to take shape around the 1950’s, but some say that it dates all the way back to the 1800s, the idea of CSR was seen (Carroll, 2007). One may think that because it is dated so long ago, it doesn’t have an important impact today nevertheless, it is proven that Corporate Social Responsibility is a pathway for entities to self benefit as they are in the process of benefitting society.

In this article, “The Truth About CSR,” authors Rangan, Chase and Karim stress the importance in aligning a company’s social and environmental activities with its business purpose and values (Rangan, Chase, & Karim, 2015, 41). Outcomes of CSR programs should be a “spillover” and not a primary focus of a business, expressing concern towards social responsibility and corporations failing to contribute to society accordingly (Rangan, Chase, Karim, 2015, 42). There is a great deal of importance in companies refocusing their CSR activities on a primary goal and in providing an organized process for bringing consistency and discipline to CSR strategies (42). Rangan, Chase and Karim want corporations to understand why it is important for them to evaluate their CSR activities and refocus them towards the goal of reinforcing the firm’s societal and environmental actions, while also ensuring their actions add to the overall purpose and values of the corporation. According to the authors, even though

Even though customers are a major key to success of any business, limiting CSR practices to an external group of stakeholder is insufficient. From the customers’ side, the focus is “on the corporate brand and its societal relationships with external constituencies.” (Lacey, Hensel 316). It is undeniable that implementation of CSR can attract the customers and lead them to be a significant are source of a financial gain. That is because CSR changes the way consumers behave in the market and alter their beliefs toward the company standards.” (Lacey, Hensel 316). Nevertheless, extensive focus on the social gains may cause the business to suffer financially. If that happened, the case is considered to be a failure of executing CSR. Again, this is a result of shifting all the business gears to benefit a sole group the stakeholders.

“There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” (Friedman) Friedman’s word perfectly defines the shareholder theory. However, stakeholder theorists, like John Mackey or Edward Freeman, argue that business has an ethical obligation to all stakeholders, including employees, suppliers, costumers, society and any other groups of people that the business has a relationship with. Personally, I am more inclined to Milton Friedman’s sentiment for various reasons demonstrated as below.

Even though the stakeholder theory of the firm served as a comprehensive fundamentally solid concept for corporate social responsibility to branch out of; without the stakeholder theory of the firm there is no corporate social responsibility and vice versa, because business cannot exist without society and society is not sustainable without business, due to advancements in the modern world, business and society have evolved, and traditional business theories have a narrow business scope, while contemporary perspectives have a broader approach.

Given their influential position and the enormous impact of business organizations in modern society, the purpose they should serve is discussed by theorists in various fields. The stakeholder theory of the firm is probably the most popular and influential theory to emerging the CSR area (Stark, 1994). The stakeholder perspective argues that the interests and values of all parties that hold a stake in the organization should be taken into consideration (De Wit &Meyer, 2002), Carroll (1989) the word `stake´ refers to having “an interest or a share in an undertaking”. While the term stakeholder was first recorded in the 1960s, the theoretical approach was in the main developed and presented by Freeman (1984) in the 1980s. Several authors (Carroll, 1989; Harrison & St John, 1994; Rhenman, 1967) define stakeholders as individuals or groups who in some way affect or are affected by the organization. Lee (2006) and Smith (2003) say that most firms understand the importance of managing relations with key stakeholders. Firms that have been successful in this area have done more than simply issuing press releases and responding to

Nowadays, the employment of ethical principles and standards to the decision and actions of business organizations-better known as Business ethics- is a crucial issue for its strategic management; businesses are expected to have a formal code of ethics or policy that encourages corporate environmental sustainability. To do so, businesses have used different frameworks such as the eco-efficiency, natural step, triple bottom line, ecological footprint and so on, in fact, along with the TBL approach the CSR programs are the most commonly used, it is defined as the “management of stakeholder concern for responsible and irresponsible acts related to environmental, ethical and social phenomena in a way that creates corporate benefit” (Vaaland et al., 2008, p. 931), and can help business to display a more congruent and coherent identity that consequently will lead to enduring and substantial relationships with stakeholders.

It is to a wide extent voluntarily engrained into the corporate strategy. Moreover, it covers the most important areas of CSR – environment and society. How the strategy is really implemented into practice will be discussed in the following parts. However, it shall be mentioned that the strategy “ONE” still makes the impression of a traditional growth orientated strategy. In the appendix three and four two additional figures regarding stakeholder vs. company goals and the CSR key areas can be

According to John Stuart Mill most persons, and perhaps all, have a basic moral sensitivity to the needs of their fellow human beings (17). This was so prominently displayed when Southeast Asia was devastated by the recent Tsunami disaster that touched the hearts of both the public and corporate society. Hundreds of millions of dollars were donated by the corporate sector to provide those misfortunate people with aid. No doubt some of those corporations were displaying true social responsibility while others were merely acting the part in order to simulate this appearance. This, in my opinion, is the underlying difference in the two theories I am presently critiquing. Clearly Freeman's Stakeholder theory is superior in this regard. With such massive profits accumulated by large corporations those that decide to bear social responsibility can significantly improve society as a whole.

Therefore, corporate’ activities have strong influences to the stakeholders. Hildebrand,D,et,al (2011) argued that under a specific but identifiable situation, a company’s CSR actions are able to satisfy stakeholders’ higher-order and self-related demand, meanwhile enabling the stakeholders to identify with the company. On the other hand, Piercy, N. and Lane, N.(2009) indicated that CSR seems to be the most efficient way for the corporate marketing efforts of most firms. It may enable the stakeholders to be loyal even life-long customers of the companies.

The main aim of a business is to earn profit but a business also need to fulfill the social and sustainability need along with its economic need this responsibility is known as Corporate social responsibility. CSR is The commitment of the business to seek after those strategies to settle on those choice, or to take after those lines of activity which are alluring as far as the target and estimation of our general public.(Carroll 1999,p.270) Now a days, relationships with customers depends on the value the company give to the social, economical and sustainable needs. In spite of the fact that executing CSR exercises rightly can prompt great impacts, for example, an expanding of organization 's benefits and a commitment to the social issues with boundless materials, without a significant learning of CSR may bring about terrible impacts, for example, squandering time and cash. According to research "Empirical studies regarding the relationship between CSR and performance are mix’’(shen and chang 2009, p.134) .This paper will talk about the significance of CSR about in meeting economical, social and sustainability needs and after that advantages and disadvantages.

Social progress, economic development/production and environmental preservation are the three fundamental keys to sustainable development. While there are various definitions on CSR, this report will outline what is meant by the term “CSR” and how it is connected to the strategic purpose of an organisation. It will also critically asses the results of CSR in reference to various stakeholder expectation’s looking at both good and bad