In today's world the business world has been waked to perform their duties toward our society and environment. In this particular essay, I have include that what is corporate social responsibilities and what are they, from where and how the CSR concept has been started. In this essay I have include that the view and the argument of the different philosopher and the expert writer to support my view and argument. In this essay I have also include the argument in the favour of CSR and against. This essay has shown that how stakeholders affect the organisation and corporate social responsibilities, or current existing issue including environmental, technological, and global issue. I have also spoken about cause of initiative including avoid the financial risk, in hence the image of the company and reputation in the business world. In this essay I have spoken about the political, public profit drivers for the CSR activity in the organisation, and I have predicted the future of the CSR with the argument of Harvard business school. In this essay I have also include that some recommendation in which region the corporate world has to focus or on which topics.
Corporate social responsibility (CSR) is defined as the economical, legal, ethical and flexible expectation that society has "organisation at the a certain point of time (carroll and bucholtz 2003, p-30)
The corporate social responsibility (CSR) means that the any particular organisation has moral, ethical and humanitarian responsibility in addiction to their responsibilities that not include only stakeholder or the shareholder. It includes other constituencies' as well for instance, supplier, customer the legal communities, government, environmental issue etc. Thus the various groups such as employees, customer, and consumers etc, affected by the action of organisation are called stakeholders. Corporate social responsibility are related to the to the business ethics but not identical. Corporate social responsilities mainly discriminate the responsibility of an organisation, usually focus on the moral judgement and behaviour of the individual or the any particular group inside the organisation.
Now a day's mostly the large and the small type of organisation spending lot money on the corporate social responsibilities (CSR) to get more profit. The economic responsibilities related in the definition consign to society's belief that organizations will produce goods and services that are required and desired by customers and sell those goods and services at a realistic price in the market. Organizations are likely to be well-organized, defined and money-making, to keep shareholder happiness in mind. The legal responsibilities communicate to the prospect that organizations will obey with the laws set down by society to govern competition in the marketplace. All big and small Organizations have thousands of legal responsibilities governing almost every aspect of their operations, including consumer and product laws, environmental laws, and employment laws and so on.
The ethical responsibilities of profit driven firm concern the societal expectations that go beyond the law, such as the expectation that organizations will achieve their affairs in a fair and just way. This means that organizations are expected to do more than just obey with the law, but also make practical efforts to look forward to and meet the norms of society even if those norms are not formally enacted in law,Finaly the discretionary responsibilities of corporations refer to society's expectation that organizations be good citizens. Ethical responsibilities may engage such possessions as humanitarian hold up of programs benefiting a community or the nation. It may also involve donating employee expertise and time to worthy causes.
(ii)HISTORY OF CORPORATE SOCIAL RESPONSIBILITY (CSR)
The nature and scope of (CSR) is not a very aged in the business world it widely used since 1960s.The organisation are mostly using corporate social responsibility in the economical, ethical, legal and the discretionary expectations placed on organizations. It is probably accurate to say at some extent the social communities and the government sometime rely on the big organisation to perform their social activities.
In the starting of eighteenth century the enormous economist and philosopher Adam Smith has spoken about the traditional or classical economic model of business. In traditional or in the established model suggested that what are the needs and requirements of society could best be met by the unrestricted dealings of individuals and organizations in the marketplace. By acting in a self-interested manner, individuals would produce and deliver the goods and services that would earn profit to the firm, but also meet the needs of others. The viewpoint expressed by Adam Smith over 200 years ago still forms the starting point for free-market economies in the modern world. On the other hand, even Smith refers that the free market did not always perform completely.
The Industrial Revolution contributed to far-reaching change in so many countries, especially in Europe and the United States of America in eighteenth century. Many of the principles adopt by Adam Smith were bear out as the beginning of new technologies allowed for more well-organized production of goods and services. Because of this essential changed the millions of people obtained jobs that paid more than they had ever made before and the standard of living significantly improved. Especially the Large organizations urbanized and acquired enormous power, and their founders and owners became some of the richest and most powerful men in the world. In the late nineteenth century many of these individuals supposed in and practiced a philosophy that came to be called "Social Darwinism," which, in simple form, is the idea that the principles of natural selection and endurance of the fittest are applicable to business and social policy. Thus, even though many of the great tycoons of the late nineteenth century were wish to great humanity among all the time, their giving was done as individuals, not as representatives of their companies. In the reality, at the same time that many of them were giving away millions of dollars of their own money, the companies that made them rich were practicing business methods that, by today's standards at least, were abusive of workers.
In the starting of the twentieth century a strong reaction had take place against the big firm began to gain momentum, at the same time the big business was criticise as being powerful and the antisocial practise. The law and regulation were introduced such as" Sherman antitrust act" to control the big organisation to protect the employees, consumer, and society. This corporate movement called the social gospel to support the working class and the poor.
In the starting of the 1960s and 1970s the social right, consumerism, and environmentalism affect society expectation of business to stop and to solve the social problem for instance equal opportunities, product safety, work safety and environment. Furthermore the society start expects from the business organisation to participating in to the social problem whether they have solution or not. These all these view become the corporate social responsibility in today modern world.
In the above section of this assignment is include the introduction the corporate social responsibility (CSR) and the history with the example and follow i am going to conclude the different argument in the favour of corporate social responsibility (CSR) or against corporate social responsibility (CSR).
(iii) ARGUMENT AGAINST (CSR) AND IN FAVOUR OF(CSR)
The major argument in the favour of and against the (CSR) in the term of economic view according to great economist "Milton Friedman, who has argued that the primary responsibility of the organisation is make profit for its owner, stakeholder, provide excellent quality of goods and the service to consumer not to indulge in the social issue. According to (Carroll and Bocholtz) corporate social responsibility is becoming now global concern.
Eventually the business is unprepared to addresses the social issue in society. The" capability" argue help to know that the manager, executive are well trained to handle the financial, marketing, and the operational management but they are not prepared to address the social problem. Therefore they do not have the right skills needed to deal with social issue. However this argues also suggest that corporate involvement in the social issue can make the situation worse. At the same time the capability argues is also suggest that to the organisation what they can do best to provide the goods and the services and selling them at the affordable price in the market to people who they desire to sell with the societal interest.
There are some arguments in favour of corporate social responsibility (CSR). There is Single view held by critics of the corporate world is that from the time when large corporations create many social problems, they should attempt to address and solve them. Those holding this view criticize the production, marketing, accounting, and environmental practices of corporations. They propose that corporations can do a better job of producing quality, safe products, and in conducting their operations in an open and honest manner.
Therefore a very unique view from other is in the favour of corporate social responsibility (CSR) is to take" self interest" in the social issue. This view is holding them self in the social issue and solving them properly in the future. According to (Carroll and buchhltz) the corporate world may take interest to engage in the social activities because the corporate world prevent and hinder them in the form of regulation and legislation.
Finally, some advise that businesses world should suppose social responsibilities because they are surrounded by the few private corporation and they have proper resource to do some kind of activities. The business world has some of the brightest minds and the full with financial resource and the man power in the world, and tremendous skill to do so. For instance (Wal-Mart, Hilton hotels, TATA group in India and so on. Those few company has annual revenues that go over the annual GNP of some countries.) Thus, all large and the small businesses should utilize some of their human and financial capital in order to "make the world a better place.
(iv) STAKEHOLDER CONCEPT IN (CSR)
Stakeholder are those individual or group who depend on the organisation to fulfil their own goal and on whom the organisation depend or according to the "Lawrence and Weber" stakeholder are individual or group that are affected by the policies, action and procedure of the organisation. As per the (Carroll and Buchholtz 2003:p-7) there are two kind of the stakeholder primary and secondary.
In the primary stakeholder consists shareholder (owner) employee, customer and business partner. The secondary stakeholder consist local, state, federal government, regulatory bodies, civic institution and group, trade and industry group, competitor. All large and medium size of organisation have consist primary and secondary stakeholder. However the primary stakeholder places their direct interest or stake in the organisation. Eventually secondary stakeholder are do not have direct stake in the organisation but are still affected by different kind of operation in the organisation.
The primary stakeholders include shareholder and employees. Every organisation has some legal and moral duties towards its shareholders and employee. The duties include performing well continuously and getting maximum return on the investment. The primary stakeholder have moral and legal claim on the organisation. The organisation also have some specific goals and responsibilities to their customer and the employees to producing the safe goods and service which gives value to local communities and the future generation.
Finally the secondary stakeholder including the government bodies and agencies they do not have direct ownership and stake in the organisation but they have some responsibility to support the civic bodies of an organisation. If the organisation is not performing well so the all secondary stakeholder affected for the instance British Petroleum (B P) and the Taj hotel group. British petroleum affected by the oil spill in the Gulf of Mexico and the Taj and the Oberoi group affected by terrorist attack in the economic capital of India (Mumbai)
(v)EXISTING CURRENT SOCIAL ISSUES
In the business world there is so many kind of social issue and so many problems. It would not possible to include all social issue and the problem. In this particular I just include some main issue the environment, global issue and technology issue.
The corporation do not have positive impact on environment they always produce the negative impact on the environment because the production multinational company make pollutant our surrounding environment. It cause of global warming, acidic rain, hall in the ozone layer etc. It is a corporate responsibility to reduce waste of the production in the environment and make their operation pollution free.
The Multinational Corporation operates business in the global environment. The globalization has their positive impact and the negative impact as well. In the term of positive impact, the employee of the company can get higher wages, good working environment; they can make their living standard etc. In the term of negative impact the globalisation of Multinational Corporation can create so many kind of social issue including labour exploitation, destruction of the environment, and abuse human right.
Many small sizes and the large size of corporation face so many kind of social, legal and ethical issue brought by the globalization of business. It is a corporate responsibility to handle all these problem and sort in well manner.
The last existing issue is related to technology and its effect on society. In this modern world the technologic is now reached on the peak level, it has some positive impact and some negative impact on society. Firstly the company is using the internet to promote their good and the service to sell into the market at the same time the company for instance Amazon and eBay proving all things online and proving on the door of consumer through efficiently courier service. In the issue of privacy and the security the so many banking and insurance company is using C.C TV camera and different kind of security system to protect the hard earn money and the investment of the social people. If look at the negative impact of is technology the hacker can hack the any kind of security system and they can theft the hard earn money and the investment of the social people.
(vi) THE CAUSE OF INITIATIVE IN CSR
In this assignment I have spoken about the introduction of corporate social responsibility and the history, different argument in the favour and against of (CSR), different social issue including technological, global and most important environmental issue. I strongly agree with the statement year on year the all organisation spending more money on the corporate social responsibility initiatives. This kind of activity adds some value to our society to some extent. But in the modern world the business ethics and trend has change dramatically. The business company are not thinking to give any real value to the society the companies are thinking how we have to make more profit in the market and promote their goods and service, and make stakeholder more profitable and happy by giving them more return on their initial investment in the particular company. Corporate social responsibility is a business strategy that works. In a world where brand value and reputation are increasingly seen as an organization's most valuable assets, corporate social responsibility can build the loyalty and trust that ensure a bright sustainable future. These businesses are not judged on their results but on their behaviour too. Therefore corporate social responsibility should be an integral part of every aspect of business life. The main causes of increasing initiative of corporate social responsibility are following.
Improve the financial performance of organisation on global scale.
Good relation with government and social communities.
Avoid the financial risk and financial crisis.
Enhance the brand value and reputation.
Long term sustainability for organisation and society.
Long term return on investment of stakeholder.
(a)Improve the financial performance of the organisation on global scale- the large and small organisation apply corporate social responsibility as a business strategy for instance the organisation expand the huge amount of their profit in the social activity like give donation to school, help the disable children, make the charitable hospital and help poor people and get the social sympathy, make good and esteemed image of the company in the eye of social organisation. Now days the big multinational company giving the huge donation after announcing the profit from the world wide operation for instance the Indian company TATA MOTOR had donate the highest amount to Harvard business school in America 50 million dollar in the history of 102 year of Harvard school of business. Now the TATA is going to expand the business in America.
(b)Good relation with government and the social communities- all the company are expanding huge amount of their profit to make the good relation with the government bodies and the social communities. The companies are engaging such kind of activity to make public relation (PR). The company always try to make good relation with the government because the government help companies in the taxation, help to increase the operational level of company, and production etc.
(c) Avoid financial risk and financial crisis- the corporation are really more concern about the financial risk and financial crisis in time of recession since 2008, Especially UK AND USA companies are applying the corporate social responsibility as a corporate strategy to avoid the financial risk and financial crisis for instance Microsoft, Tesco etc.
(d)Enhance the brand value and reputation- especially big corporation are engaging with corporate social activity to enhancement of the company reputation, brand value and good will in the eyes of their consumer, stakeholder and the employees. The corporation are doing the sponsorship of the famous sport player, actor and actress to make good will and make good reputation in the global corporate world for instance Brit insurance doing the sponsorship of England cricket team for coming ashes cricket series with Australia.
(e)Long term sustainability for organisation and society- the organisation are engaging with the social corporate responsibility to make the long term sustainability of the organisation in this competitive market in all the sector where the organisation want to grove. The company is using corporate social responsibility as a corporate strategy. The companies are providing the parks to their employee and the so many kind of facility including medical facility and different kind of allowance for instance travel allowance, house allowance and giving chance of promotion to their employees and outsource employee to get promotion. The companies are expanding huge amount of money on the facility of the employee and make the stake holder happy and to give them maximum return on their investment, to compete in the competitive environment.
(f)Long term return on investment of stakeholder- there are two types of stakeholder primary and secondary, both primary and secondary stakeholder plays a vital role to support the main body of an organisation. The primary responsibility of an organisation is to make stakeholder happy, to give them good return on their investment and make the organisation profitable. The corporation applying corporate social responsibility as a corporate strategy, the big multinational including banking sector BARCLAYS, HSBC, NATWEST and so many company of the corporate world applying strategy to announcing the profits in the mid of the year to attract the stakeholder in time of recession for instance the HSBC "the world local bank" had announced the profit of 7 billion in the mid of the year 2010 and there are so many bank had announced their profit to attract the stakeholder to invest more money into the market and give them more return on their investment. Corporate social responsibilities are helping multinational companies to expand their business in the financial market.
The (CSR) is now becoming the most important strategy of the corporate business world and the strongest way to get the moral, legal and the ethical support of the government bodies and the social communities. The companies are using (CSR) to make public relation (PR) and the sympathy to perform well in the time of recession.
(vii) THE PUBLIC, POLITICAL, PROFIT DRIVERS FOR CSR
In the term of corporate social responsibility the public, political factor play a vital role in all sector of the organisation to get profit. There are some public, political profit driver consider to make organisation profitable.
Internal pressure on manager.
Pressure from business competitors.
External pressure from Investor and consumer.
(a)Internal pressure on manager - public, political profit driver in the organisation for corporate social responsibility the internal pressure on middle manager from the top hierarchy to perform well, get profit for organisation and engage in the corporate social responsibility. This also include avoid the financial risk from the organisation to perform well in the financial market and make profitable their stakeholder. Some times to do so the manger only gets their pay not any extra incentive (Jones, 1996). To place any CSR strategy we consider three pre-requisites are follow: First, senior management should know the tools to give value of CSR. Second, the manager should know how to motivate their subordinate for (CSR). Third consider CSR as a competitive driver that requires appropriate resource van der linde 2000: p-131). However first priority of the business people is to make profit and these the CSR activity is comes later. The top hierarchy manager also gives pressure on their associate to improve consistent performance with social welfare. The corporate social responsibility also leads the organisation to improve the financial position in the business world and it also gives the competitive advantage to the organisation with the good reputation in the business world.
(b)Pressure from the competitor - Second public, political profit driver in the organisation for CSR the pressure from the competitor, now days the business environment has become highly competitive. Every organisation want to achieve profit and want to make their stake holder happy and all organisations want to make good relation with social communities and the governmental bodies. It has been proven that corporate social responsibilities are really not winner to get profit but somewhere the CSR activity can help to make profitable organisation for instance the competition of telecommunication in the Indian market Vodafone, idea, reliance, Airtel, Aircel etc.
(c)External pressure from investor and consumer - The external pressure from the investor and consumers help shaping the CSR in the organisation. The investors including stakeholder are always want to achieve maximum return on their investment. Organisation prefers stake- holder funds to stabilise the condition of the company and avoid initial financial risk. To stabilise the condition of any organisation, investors and consumers play a vital role because they are investing their funds into the market and they expect return on that investment and at the same time the consumer also expect quality goods and services from the company they use. The investor always tries to focus on the stock market and they also focus on the economic performance of different organisation. Now a day's investors get profit from the market they also invest that fund for social welfare. The consumers are now more concern about the quality of the product and services attached to the green characteristic for instance natural, cosmetic, recycled paper, etc( Cran, 2001:shrun McCarty and lowerey,1995:). The organisation considers eco-consumerism as a strategy to capture new market and eco-consumerism can promote social welfare.
(viii)FUTURE OF CSR
In the past 15 years have witnessed important changes in the business world, the business people is become more concern about on their social environment performance of their companies. In the early 1990s there were few big companies in the UK and USA would accept responsibilities for the social and environment and the impact on their supplier or customer. Now a day's all companies are publishing annual report and the detailing the social and environment contribution.
In today's world all big and small organisation aware that social and environmental dimension are changing including the financial risk due to the recent recession globally, mostly UK AND US. However the corporate social responsibility will play a vital role in shaping the business globally and sustainable development in future. Hence the corporate social responsibility is effective tool as well as the corporate strategy which works to make the company's reputation among, financial stability, strong public relation (PR) in the bunch of the companies it give the competitive advantage to compete in the business environment. It is very difficult to predict the future of the corporate social responsibility because the business is now spread out whole over the world economically. But it also reveals that by some arguments the future of the corporate social responsibility is great and the very effective as corporate strategy for the business organisation for future growth and to avoid financial risk.
The corporate social responsibilities are plays a vital role for our society to develop the condition and standard of living of the social people economically. By some figure it is also prove that in which area and in which region of the world we should have to focus in the future and on which topic we have to work more to make more effectives the corporate social responsibilities.
(a)WHERE WE SHOULD FOCUS IN FUTURE
ASIA AMERICA EUROPE AUSTRALIA
According to the survey of Harvard business school America the business world should have to focus in Asian parts because the Asian market is on boom because of two country china and India. In the recession Europe is doing well in the corporate social responsibility but the Australian organisations are doing well.
(b)WHICH TOPIC SHOULD FOCUS ON
Impact and Performance
Law enforcement and legislation
Business case for CSR
5 10 15 20 25 30 35
According to the research of Harvard business school America the figure 2 shown that the topic should focus in the term of corporate social responsibility. All organisations should focus on the performance of the company, and then the companies should have to focus on the law regulation country to country. The organisation should use the case study of different organisation who performing very well in the business world to perform their CSR activities. Finally the professional competence in the business is essential thing to compete in the competitive environment, and to perform well in the market.
From the above analysis of business world it can be concluded that the corporate social responsibilities is corporate strategy to strong public relation, make good relation with investors in the business world. Corporate social responsibility has a strategic location and resources which is competitive enough to stand in the market and make stronger organisations financially but to secure a competitive edge over its business rivals it is important for the organisation to perform their social and environment responsibility and make their consumer and their primary and secondary stakeholder. From the various tools and the factor used it is clear show that the organisation are engaging and spending a huge amount of their profit in the market for corporate social responsibilities.