Corporate Social Responsibility is when companies control the business processes to create an overall positive effect on society. Corporate Social Responsibility is the progressing obligation by business to conduct oneself ethically and donate to economic growth while improving the standards of the society's workforce and as well as of the local community and society. (www.mallenbaker.net)
The need of corporate social responsibility is that it helps in building the brand image of the company which will in turn invite plenty of investors there by increases sales and profit of the company or firm. It is also a duty of every firm to give something in return to the society. CSR acts like a bridge between the firm and society and through this both sides are benefited.
Corporate social responsibility can be further explained with Carroll's four part model of corporate social responsibility which includes Philanthropic responsibilities, Ethical responsibilities, Legal responsibilities and Economic responsibilities.
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Carroll's four-part model of corporate social responsibility
Source: Carroll 1991
Philanthropic responsibilities are tasks that are the needs of the society. Philanthropy encompasses those corporate behaviour that are related to society's want that businesses be fine corporate citizens. This incorporates keenly involving in actions or programs to encourage human wellbeing or benevolence. Examples of philanthropy include business aid of monetary resources or exclusive period, such as contributions to the arts, education, or the community. A loaned-executive program that offers headship for a community's United Way campaign is one illustration of philanthropy. (www.findarticles.com)
Ethical responsibilities are responsibilities that are awaited by the society. Ethics deals with good behaviour of persons and good living. It distinguishes between right and wrong and encourages the notion of good life that is fulfilling and according to moral conduct. Ethical Responsibility is such a kind of responsibility that is a boundary to the concepts of Ethics. These responsibilities are not only to encourage a good living standard for oneself but also for the whole society. Ethical Responsibility is imposed by the moral and social values of a society and not by regulation. (www.blurit.com)
Legal responsibilities are those responsibilities which are a necessitate of the society. Society has not only authorized business to function according to the turnover motive, at the same time business is likely to obey with the laws and regulations promulgated by federal, state, and local governments as the ground rules under which business must function. As a incomplete fulfilment of the social contract between business and society, firms are likely to follow their fiscal missions within the structure of the law. Legal responsibilities replicate a vision of codified ethics in the sense that they embody basic ideas of reasonable operations as established by lawmakers. They are depicted as the next level on the pyramid to describe their historical improvement, but they are suitably seen as co existing wit economic tasks as basic precepts of the liberated venture scheme. (www.findarticles.com)
Economic responsibilities are those responsibilities which are demanded by the society. Business firms were formed as economic entities intended to offer goods and services to societal members. The profit motive was recognized as the key incentive for private enterprise. The business organization was the basic economic unit in our society. As such, its prime role was to manufacture goods and services that clients required and desired and to build a satisfactory profit in the progression. At some point the idea of the profit motive got transformed into a notion of maximum profits, and this has been an enduring value ever since. All other business tasks are predicated upon the economic liability of the firm, because without it the others become doubtful considerations. (www.findarticles.com)
Stakeholder theory of the firm traditional management mode includes shareholders, customers, firm, suppliers, and employees. The stakeholders may be divided into categories of internal and external stakeholders. The internal stakeholders include employees, owners, and manager. And the external stakeholders include shareholders, society, suppliers, government, customers and creditors. The above question is mainly based on the external stakeholders which emphasis on shareholders and society.
Case study of Shell refining company in relation to CSR both traditional and new view
Shell Refining Company
Always on Time
Marked to Standard
Shell Company offers to the principle of sustainable development that sees to the requirements of the current situation without compromising the ability of future situation to encounter their own desires. Being part of Shell, this Company offers to the same principle of sustainable development. Shell's practices are associated with the systematic approach adopted by Royal Dutch Shell plc in their own pains to employ strength, security and environmental management practices. Their behaviour are governed by the desire to make business decisions that give weight age to their sense of economic, social and environmental responsibilities and by which our stakeholders and society can hold us answerable.
Shell refining company are dedicated to serving its stakeholders in order to advance their quality of existence whereas concurrently contributing to Malaysia's progression and its Vision 2020 goals and aims. (www.shell.com)
The role of shareholders and society in a traditional point of view was mainly associated with mere business ethics. It is the first hit on an offshore provision, formerly thought secure in spite of a wave of inshore attacks. The emergency shutdown might have damaged equipment, which would have to be repaired. The raid took place on the Bonga oil platform about 120km (75 miles) off the coast of the Niger Delta. Shell has also been blamed for an oil spill in the Ogoni region of the Delta. Oil is gushing from disused pipes deserted by the company when it left the region nearly 15 years ago, following local protests. Attacks on the inshore Niger Delta have helped drive up world oil prices and previously cut Nigeria's output by about 20%. (www.bbc.co.uk).
Shareholders made sure that every action of theirs will be ethical which would be fair, moral, principled and decent decisions towards the company. Shell company's shareholders in the traditional point of view were ethical as in they told their directors not to let the oil wastages in the river at Nigeria as there were wastes being dumped in the river which in turn were affecting the people of Nigeria. The society in turn defended itself.
The Shareholders offer its customers with solutions and a diversity of energy products, materials and services, which get together their requirements. Cost-effectively and does not cause damage to the environment. They work to convince them that their performance and society holds up for us, do not direct to untenable social differences but create prosperity, which paybacks society as a whole. They also work to persuade them that there is a clear path for the future expansion of their industry, which will gain the next generation.
Shareholders fabricate and sustain a culture of knowledge and modernism in which employees can fulfil their potential and meet the most demanding of goals meanwhile enjoying what is being done. It is a culture where the leaders are being motivated to instigate others through personal example, and where the values of honesty, integrity, respect for people, trust, openness, teamwork and professionalism, can flourish. The companies' forces meets the challenges of the new millennium with a view to serving people build a enhanced globe. Therefore, they will persist to invest in projects that exploit superlative equipment, research and expansion within the highest Health, Safety, Security and Environmental (HSSE) standards. (www.shell.com).
Traditional view of Shell Company
Enduring productivity is necessary to achieve business objectives and to sustained development. It is a measure, both of effectiveness and of the worth that customers position on Shell products and services. It provides the essential business funds for the progressing investment that is necessary to extend and create future energy supplies to convene customer wants. Only through profits and a well-built financial base, it would be possible to fulfil tasks.
Free enterprise is being supported by Shell companies. They look for fair competence and ethics and within the framework of applicable competition laws and they will not avoid others from competing freely with them.
Shell companies persist on sincerity, integrity and justice in all aspects of their business and with whomever they deal with. Any kind of direct or indirect form of bribes where there is an offer, payment and acceptance of them is not acceptable. Payments with regards to facilitation are also bribes and are not granted. Every business dealings on behalf of a Shell company must be reflected precisely and moderately in the accounts of the company in accordance with established procedures and are subject to audit and disclosure.
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Shell companies operate in a communally accountable manner within the laws of the countries in which we operate in pursuit of our legitimate commercial objectives. No payments are made to political parties, organizations or their representatives by Shell company. They do not participate in party politics. However, when associated with governments, Shell companies have the right and the conscientiousness to make our position known on any matters which affect us, our employees, our customers, our shareholders or local communities in a manner which is in accord with our standards and the business values.
Safety, Health, Security and the Environment
Shell companies have an orderly approach to health, safety, security and environmental management so that incessant performance development can be achieved. Shell companies also handle these issues as significant business actions, set principles and goals for development, and compute, assess and report performance outwardly. There is a constant check to reduce the environmental collision of our operations, goods and services.
Shell companies aspire to be excellent neighbours by constantly recovering the traditions in which they donate directly or indirectly to the universal happiness of the communities within which they work. Management of social effects of business activities in a cautious manner and work with others to improve the reimbursements to local communities, and to mitigate any negative effects from their activities. Shell companies also take a productive concern in societal matters, directly or indirectly related to their business.
Communication and commitment
Shell companies distinguish that usually conversation and commitment with stakeholders is essential. They are dedicated to reporting of performance by providing full relevant data to lawfully involved parties, subject to any overruling considerations of business privacy. In interactions with employees, business partners and local communities, they look for to listening and responding with sincerity and dedication.
Shell Company complies with all applicable laws and regulations of the countries in which they operate with. (www.shell.com)
New view of Shell Company
No damage to people
Shell Company are truly dedicated to pursuing the aim of no damage to people or property as an outcome of their actions. They make sure that there will no one victimised from their operations.
Business for Safety
Shell Company persistently believes that a well-built safety society is necessary for business. So, they continue to motivate a customs of ownership and individual accountability for safety and health at the workplace all through the firm. Throughout 2006, they sustained to take on the ordered functioning of HSSE Management Systems with specific improvements reflected via key performance indicators (KPIs).
Behaviour Based Safety (BBS) was initiated to all refinery workers as well as the in-house contractor by an exterior adviser. The programme began in November 2004 and all workforces were trained by 2005. A group of BBS Observers were educated to conduct observations and offer reports to the focal safety manager. A web based checklist for the BBS observers was launched and the conclusion are being analysed to ensure continuous improvements in safety behaviour. Overall, there are many positive indications that the BBS programme will offer additional marked improvement in our safety performance. In 2006, the observations contained in BBS observer's database are being analysed by a specialist to give earning basis in preparing HSSE programmes and drives.
They are dedicated to shielding the environment. Company minimises the effect of its actions to the environment by setting extremely demanding development targets to increasingly diminish emissions and discharges. These efforts all fall in line with Malaysian legislations, Shell Group Strategic Objectives and other connected global conventions.
Complaints from public
It is the right of all citizens to find fault if and when any actions bother any citizen's daily livelihood. They take all complaints acutely and each is recognized and filed to make sure timely action and response is assured. Usually, all complaints will be responded right away and stopped within 48 hours. If this is not possible, the complainant will be provided a cause for the hold-up and will be advised as to when to wait for a response. In 2006, your company recorded seven public complaints, compared to five recorded in 2005. The complaints were mainly related to odour and noise, which duty officers punctually responded to and the suitable remedial activities taken. Complaints are also discussed at the Community Dialogue sessions that take place frequently. (www.shell.com)
The following are some activities conducted by Shell Company towards the new view of CSR. They are as follows
SOCIAL PERFORMANCE PLAN
Social Performance (SP) in Shell Group is the word used to explain how one manages the effect of business on the communities and societies in which they function. As part of the Shell Group guidelines, Company has developed and executed its SP Plan, which aims to boost social performance levels in a prearranged approach. Company and its stakeholders rise to gain from practical commitment on evidently drawn-up matters.
Shell Company is a key associate of Port Dickson community. They are continuously looking for suitable ways to give to the social well being of the neighbourhood and to the wider public, which grant your Company its licence to function and nurture.
All Companies including Shell Company play an important when it comes with societal aspect as they have a role to play in shielding and supporting biodiversity. As an dynamic contributing member of society, Shell takes this task very sincerely. (www.shell.com)
Multiplicity and completeness of Shell Company
An organisation with a forward thinking motive, Shell Company appreciates that the whole is forever more than the sum of its parts. They also know the significance of accommodating differences and distinguish people for who they are while acknowledging the significance of their offerings. Merely by recognising and considerating the differences inbuilt in individuals, one can want to plug the various talents of pool of diverse people. Besides accommodating multiplicity in the workplace, one can optimise human resource ability and sharpen the dormant talents and skills of cosmopolitan labour force.
Multiplicity encompasses noticeable dissimilarities in conditions of gender, age, nationality and physical ability; as well as delicate fundamental differences in terms of education, experience, religion, work styles, way of thoughts and communications. Completeness, on the other hand, refers to a place of work where diversity, both noticeable and delicate, is appreciated and where individuals are given the chance to expand skills and talents unfailing with organisational values and business objectives. Their recognition of diversity and inclusiveness means that the Company today has a diverse and multi-talented labour force comprising 300 employees of five nationalities, of which 89% are male and 11% female. Among the management team, the ratio is more unbiased with the male composition at 56% and the female composition at 44%. They are also glad to account that the Company's labour force now possess its first female plant manager. (www.shell.com)
Growing together, people matter to the Company. Their sense of economic, social and environmental responsibility is reflected in devotion to meeting today's needs without compromising the ability of future generations to meet their requirements.
CSR communication in Switzerland is a well-established exercise amongst top companies. Its prospect lies on a concrete foundation. In fact, top companies are regarded as by a mainly Anglo-Saxon approach that is active and optimistic. Three major areas of development have been recognized. Firstly, companies can increase from a more decisive assortment of the social issues to be communicated. Secondly, a key periphery of upgrading can take place by managing key publics, such as customers, shareholders, and the financial community - mainly by investing in the precise channels to arrive at them. Finally, top companies in Switzerland may benefit from adopting international coverage values. This examination has also shown the importance of understanding the cultural determinants of CSR. In this regard, more research is certainly required, especially to better comprehend differences in behaviours concerning CSR communication that may come up in multicultural contexts, a appropriate feature in the European context, and for cosmopolitan companies functioning in diverse enlightening environments. (Birth, Illia, Lurati and Zamparini, 2008).
CSR is also concluded that expertises essential by CSR managers do differ due to the assorted disciplines concerned and also the intricacy of the roles and tasks of a CSR plan. There are no precise credentials necessary for this ground. As the ground is recent, convertible skills and facts from other associated specializations such as environmental administration, business morals, transmit of equipment, human resource management and community growth are appreciated. Thereby the skills necessary by CSR managers are known as business skills, people skills and technical skills; and the precise skills necessary are further determined by the mission and vision of the organizations where the CSR managers hand round. CSR organizations in many budding countries including Malaysia consist of local and international firms. Per se, this examination advices that relative studies should be conducted on the differences between strategies adopted by the two firms in terms of emphases and point of references in CSR, the precise roles of CSR programs to community and society at large, and specific business, people as well as technical skills that the CSR managers should own. It is also advised that studies on how CSR firms struggle during the nearby economic disaster are valuable to get on. On the other hand, they have to be conscious of the reality that moving in the direction of achieving firms' economic objectives ought to be devoid of jeopardizing the social objectives. ( Ismail, 2009).