Concept of Corporate Social Responsibility

Questions: 1. Choose a concept/model in strategic management. You can choose the concept from the ones discussed in the course or you can choose another one. Examples of concepts are: core competencies, generic strategies, mergers and acquisitions, alliances, CSR, blue ocean strategy, etc. 2. Critically examine the concept: define the concept; identify when it was first discussed and what the arguments were for its creation; discuss how the concept then evolved by identifying the arguments for and against it over time and by noting any adaptations. 3. Explain how the concept fits today with other concepts of strategic management, and discuss how/if the concept is relevant or not to todays business challenges. Answers: Introduction: The success in an organization is due to Triple Bottom Line which includes the Economic, Social and Environmental aspects. Corporate Social Responsibility involves the strategic practice, which is helpful in the success of the organization. The reason for this is that there are some practices that would help in creating positive impact through the elements of Triple Bottom line an making some sustainability in the long term and contributing to the healthy bottom. There is no one size fits all approach in CSR. The effective CSR strategy should be implemented along with the business strategy, benefit of commerce and the impact of sustainability (AhÃÅ'Â £mad and Crowther 2013). There are a number of benefits like risk management, enhancing profitability, improving relationship with the community and investment in capital and community (Aguinis and Glavas 2012). In this paper, a detailed discussion is made on the evolution of the concept of CSR, identification of the arguments for and against the concept and see its implementation along with the business challenges. Defining the concept of Corporate Social Responsibility (CSR): The concept of CSR involves the initiative by the corporation to take up the responsibility and assess the effect of the company on the social being and the environment. The term is applied to the efforts that is beyond that is required by the groups of environmental protection and the regulators. The corporate citizenship is represented as CSR and this would be including cost that is incurred in the short run and there is no financial benefit to the company but rather it helps in changing the environment and creating a positive social impact (Assaf, Josiassen and Cvelbar 2012). The policy of CSR helps in the self-regulatory mechanism where the business in likely to ensure and monitor its compliance with the ethical standards, law and the international and national norms. The implementation of CSR model by the firm goes beyond engaging and compliance in the action that helps in producing more of social goods and that is concerned with the law. The main purpose of CSR involves the ris e in the level of the profit in the long term and trust of the shareholders through the positive public relations and high standards of ethics so that the risk in the business can be reduced through the corporate actions (Bergenwall, Chen and White 2012). The use of CSR will help the corporation to increase long-term profits while critics argue CSR distracts from the role of the economy. There are different type of CSR strategies and the tactics, which includes giving some of the proceeds of the company to the non- profit organization, giving the products and services to the recipients who are considered of the sales. The following are the broad categories of CSR in business practice: Environment: The focus of CSR involves the involvement of the environment. Irrespective of the business, being large or small there is large emission of the carbon footprints (Brammer, Jackson and Matten 2012). They tend to take up steps so that footprints are reduced and this considered being useful for the society and the company. Philanthropy: Social responsibility is practiced by the business like the donating in the local and the national charities. The businesses give lot of time to the local and community programs. Ethical practices by the labour: Through the treating of the employees ethically and fairly would help the company to show their corporate social responsibility (De Giovanni 2012). This is true for the businesses that operate in the international locations with the labour laws that tend to differ. First discussion on Corporate Social Responsibility: A long history surrounds with the concept of CSR showing the effect on the behaviour of the organization so it is important to understand its development. During the 1950s, the world of business and the scientific literature especially that of the United States, the problems that is related to the society and the business is dedicated to the informative materials of research, which offers the concept that, is related with the CSR (Amaeshi, Nnodim and Osuji 2013). The more popular ones are related to the CSR, corporate social integrity and corporate social performance. These concepts are seen to replace each other, as there is accumulation of the previous achievements. During the time of the 1980s, the series of concepts continued with that of the business ethics, corporate social policy, corporate philanthropy and management of the stakeholders. At the early 21st century, there are theories related to the corporate sustainability, corporate citizenship, social responsible investment and sustainable development has evolved a long way (Dhaliwal, Radhakrishnan, Tsang and Yang 2012). The approach to the complex design in case of the random selection of the concept, which includes not only the theoretical fragmentation but also separates the political speculation from that of the development process. The approach by A Kerolla who is an expert in the field of the society and business , has combined all the concepts that has been mentioned to the development of the theory of CSR as core concepts for transformation (Azmat and Zutshi 2012). This approach will help in translating the common argumentative issue about the role of business in the development of the society so that there is an analysis of the business enterprise. This is not only related to the corporate. The study related to the issue of CSR was discussed in the 20th century. The systematic scientific analysis was made in the Browns scientific paper, which was published in the year in 1953 (Elkington 2013). This paper involved the framework directions and the conditions on the topic. The issue related to social responsibility should link to the context of management this was a concept that was initiated by K Davis. He has stressed that this type of responsibility is related to the actions and the decision of business that is taken into consideration partly outside the scope of the technical interest of the company or any direct interest. In the year 1960s, the people, key events and the ideas tend to play a very important role in trying to incorporating the social changes that takes place during the decade. In the 1970s, the leaders traditional management of business engages in the matters of the CSR. In the 1980s, the social and business of the company has come closer and they tend to responsive to the members. During the 1990s, the concept of CSR has become accepted and CSR is related to the strategy of literature. Finally in the year 2000s, CSR is has become a strategic issue (Coom bs and Holladay 2012). Reason for creating Corporate Social Responsibility: The use of the CSR will not lead to solving of the problem of the country, CSR was created so that the companies they benefit themselves along with that of the society. There are many type of business reason for which CSR is created for pushing the process of business. In the perspective of CSR, innovation will be able to provide benefit for the society and the company. Unilever has created the use of CSR in innovation in the hair conditioners, which required less use of water (Fleming and Jones 2012). The research and the development by the company have led to the development of such a product due to the concerns on sustainability. The concerns on the concept of sustainability would involve the way to cut the cost. This will help in the packaging with less use of energy and this help in adding up the savings of the company. In case of the company General Mills, they have followed using energy saving techniques, as this will help the company to save more. CSR also helps in the recogn ition of the brands (Gond and Moon 2012). Companies they are able to incorporate the values of the company in the business model. The use of CSR has become so common that it gets quite difficult for the brand to get differentiated. Some companies sell similar type of products and incorporate similar type of technology for producing sustainable results. This shows that the outcome of the companies is no longer different. There is diminishing return from the brand differentiation, which is a sign of CSR. CSR has been created so that the companies they are able grow sustainably in the future. This will help them to think on a long-term basis (Gonzalez-Perez and Leonard 2013). With more companies engaging into environmentalism, the products are also going to be environment friendly. The customers they are eager to buy the products, as it is eco friendly. This would help the company to engage more number of customers. This would help in propagating good message to the customers. With sus tainability in an organization, the employees are also concerned by the customers service that is focused on the CSR priorities of the company (Haynes, Murray and Dillard 2013). Arguments against and for the use of CSR: CSR is a concern of the business so that the society can improve the performance of the business. A concern that is shown by the managers who are considered with the long-term interest of the organization and the relationship of the organization with that of the society it operates. Sustainability is the theory in the social responsibility. The sustainability of the company should be including the company that are socially responsible and that makes them compete with the society problems. This will help in the building of the profit and help in aiding the world at the similar time. In terms of the sustainability, the companies are not able to serve for a long time where there are people who are suffering and who are too poor. The company should be motivated to solve the problems of the society (Idowu 2012). It is only through the business the company is able to use the creativity, talent, capital, executive ability to so that they are able to make the differences. It is argued by the people that CSR is important. Instead, there is a debate among the people regarding the on forms of the social responsibility when there is an engagement of business. Arguments for CSR: Social responsibility is the right thing that is done. The problem in the society is due to the poverty level of wages and pollution. This is the ethical duty of the corporations to reduce the wrongs. The business has many resources that require solving the problems of the society and this is used for doing it. Another reason for the companies to be socially responsible is that there will be entry of the government who would be taking the necessary actions for creating regulations and they would be going to fine the corporations. This is seen to emerge due to the pollution issues. When the business they try to encourage some social responsibility then there is a possibility that the government might intervene. There is a possibility that the company would be able to earn profit. The shareholder value is likely to increase and companies can prosper when they are destined to work on the social problems (Idowu et al. 2013). The company can build a positive public relation and would be able to attract the best talent required in the industry. Arguments against CSR: A business should be concerned about the profit maximization, a perspective that is held by the Sceptics. Opinion of sceptics on non-profit organization or the government should resolve environmental issues. It was claimed by Milton Friedman that rather than the companies the free markets should decide on what is best for the entire world. He held the opinion that the invisible hand of Adam Smith would be able to create an important impact and would help in making the things better (Koutra 2013). There is another opinion that has been put forward and that is the companies are deemed to create products and look into the activities of welfare. They actually do not possess the knowledge and the expertise for handling the social problem. When the managers they are more concentrated on social responsibilities then their performance in the core responsibilities is going to fall. In the world market place, there might cause damage to the company for being socially responsible. The companys costs are going to increase in the activities like the donating of the money, ensuring of the safety of the products and other sort of welfare issues. This cost is likely to be passed on to the consumers in the form of full price on the products and the services (Mujih 2012). There are some of the customers who would be willing to pay more for the product and the services that is taken into consideration to be socially responsible while there might be some who are unwilling to pay. This would be bringing the company an economic disadvantage. Adaptation of CSR: The CSR strategies are adapted for managing of the risk. The reputation that is earned by the company will be destroyed when there is an environmental accident or any type of corruption. This would be drawing attention of the government, regulators, media, organizations and the civil society. When there is a culture of doing the right thing then the risk can be reduced. The crisis will help in posing the attention towards the CSR. The principle that is concerned with the environment involves the CERES principle that was applicable for the company Exxon Valdez in the year 1989 (Trong Tuan 2012). The emerging risk that is faced by the company will be reflecting on the radar screens through the recognised points of entry. The good example is the use of the example of climate change and carbon emissions. There was increasing number of shareholder demanding for the risk management policies have increased in United States and the lawsuits regards to changes in the climate has be filed for the first time.. As per a company , there would be a social risk when a stakeholder they take an area of social issues and then puts the pressure on the corporation so that they change the approaches and the policies in the market. The rise in the international business complexity also leads to global level risk which leads to social risk influenced by the economic and the political scenario. This is solved by the use of CSR. The risk management can be influenced positively by the CSR of the company through providing of the intelligence about the risk and using the effective means for making response. . These are the aspects that will help in the better management of the relationship. It is quite imperative for the management of the stakeholder relationship by the multinational corporations because if there is no management of the stakeholders like the civil society and regulators and the relationship with be likely to engage in the court room of public opinion with very little to be said by the companies. At this aspect, the management of the stakeholder relationship is different from the managing the stakeholder. In the stakeholder management the organization they perceive a close type of a system which is independent of the external context. The expectation of the stakeholder is done through the friendly relationship with the management. Figure: Stakeholder Engagement Model (Source: Collett Miles and Miles 2013) Implementation of CSR with the other forms of strategic management: CSR implementation along with the other strategies of the management will help in the strengthening of the business. CSR is referred to as a pressure that is viewed by the executives. The society including the customers, suppliers and the employees they are increasingly demanding CSR. CSR helps in contributing to the society and to the business. The management should understand there is a dual space or objective of CSR i.e. the benefit for the society and business. The business activities they try to incorporate the business activities, which is called the pet projects as this, will help in the reflecting of the personal interest of the individual senior executives. This type of activity is of much noise but involves very little benefit to the society and the business. . In the middle, there are efforts, which would be making both the sides to good, but this would be generating only limited type of benefits. CSR is equally important like the other activities in the organization. The management should consider achieving success related to the CSR strategies. Figure: Corporate Landscape (Source: Mazur 2013) Relevance of CSR on business: The CSR strategy usage will help in the overcoming of the challenges that is related to the business. It has been seen that the companies that has demonstrated the commitment to the causes will be less selfish than that of the businesses that does not follow the CSR strategies. The CSR strategy will help in reflecting the public image of the company and see how are the customers aware. The corporations they would be able to build a public image through the supporting the volunteerism and the donation of money. The companies they are going to be in the eye of the customers when they tell about their philanthropy. When there is a some actions taken by the company for creating better experiences for the customers and the stakeholders with respect to the environment then this would be coming into notice by the Media or new channels. The employee engagement will be boosted when the company engages in the CSR strategies. Conclusion: Thus, the use of the CSR strategy along with the business strategy is very important concern. CSR strategy is need of the hour. The company tries and invest more on the CSR associated strategy so that both business and society are equally benefited. The challenge for the management involves incorporating CSR with that of the other strategies to come out with the true delivery of ambitions. The innovative companies they have be able to create value to the society and the business with the smart collaborating. Smart partnering will be focusing on on the key impact area between the society and the business. References: Aguinis, H. and Glavas, A., 2012. What we know and dont know about corporate social responsibility a review and research agenda.Journal of management,38(4), pp.932-968. AhÃÅ'Â £mad, J. and Crowther, D. (2013).Education and corporate social responsibility. Bingley, U.K.: Emerald. Amaeshi, K., Nnodim, P. and Osuji, O. (2013).Corporate social responsibility, entrepreneurship, and innovation. New York: Routledge. Assaf, A.G., Josiassen, A. and Cvelbar, L.K., 2012. Does triple bottom line reporting improve hotel performance?.International Journal of Hospitality Management,31(2), pp.596-600. Azmat, F. and Zutshi, A. (2012). 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