The Reasons Why Corporate Social Responsibility Matters Commerce Essay

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"Business is not divorced from the rest of society. How companies behave affects many people, not just shareholders. A company should be a responsible member of the society in which it operates". Businesses and their role in society are subject to more intense scrutiny than ever. What is the main purpose of a company's existence? Is it simply to maximize profits in order to satisfy the owners' requests and demands, or is it possible to see the company in a larger perspective in society? Should this perspective go beyond pure financial aspects of the activities? The quotation above refers to the ongoing debate about corporate responsibility. Besides being a profitable business, the responsibility of a company can, for example, be connected to programs for fair treatment of employees, using sustainable environmental friendly methods and participating actively in discussions about ethical social dilemma. It is a discussion about how companies choose to do business, solely with financial objectives or in a responsible way that might affect the financial return, supporting other values. The ongoing debate concerning the role of the businesses in the community is an expression of expanded corporate responsibilities referred to as CSR, corporate social responsibility, or CR, Corporate Responsibility. There is no one universally accepted definition, but a number of organizations and companies have their own interpretation of CSR. The European Union states the following about the definition of CSR: "CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis". Working actively with CSR by taking actions in favor of maintaining the balance between these three values is not regulated by laws; it is a voluntary initiative. Despite the increased focus on corporate responsibility, the question of the business community's role in society is not a new phenomenon. Companies have always been a part of society, but their role and responsibilities have become some what unclear, leaving room for individual interpretations of private and public do- mains. There are presently a number of multinational corporations acting all over the world in the spirit of the globalization trend. The 100 largest economies in the world today are represented by only 50 countries; the rest are multinational corporations. An increased awareness and focus of the responsibilities of a corporation gives the business communities the opportunity to be important and powerful actors in society. Companies are encouraged to actively work with CSR. But it is not only an opportunity given to the companies; it is also in many cases expectation by customers, employees, society and other stakeholders.

What is Corporate social responsibility (CSR) ?

Social responsibility of business (Corporate Social Responsibility or CSR) is understood as "the commitment of businesses to contribute to sustainable economic development, through improving the quality of work life of employees and members of their families, communities and society, in ways that benefit both businesses as well as the overall development of society. " These enterprises (companies) want sustainable development must always abide by the standards of environmental protection, gender equality, labor safety, labor rights, fair pay, training and development staff, community development etc. C:\Users\uses\Desktop\helping-world.jpg

Some companies use sustainability or corporate citizenship instead of CSR. Some argue that the 'social' in CSR detracts from the business-related responsible activity by focusing on its social impacts (typically in the community area) while not giving due regard to the importance of ensuring the company's operations are run ethically and responsibly.

Fundamentally, CSR is about relationships between the company and its stakeholders and building trust. CSR is about how companies manage the business processes to produce an overall positive impact on society.


A stakeholder is an individual or a group that can affect the organization, or is affected by the organization's activities at any time, either now or in the future. This definition can include employees, suppliers, local communities, single issue groups, government and the wider society, as well as shareholders.

The concept of stakeholders is central to that of CSR. Stakeholders may be defined as "groups and individuals who can affect, or are affected by, the achievement of an organization's mission". The concept of stakeholders may be given a wider perspective as simply all those entities with a "critical eye" on corporate actors .Stakeholders thus form a link between the aims and ambitions of the organization and the expectations of society .This is a dynamic activity, as expectations and pressures change and is further complicated by the need for managers to resolve the interests of different stakeholders and to integrate this within the managerial decision-making process. Managers must make decisions about the extent of their responsibilities and the nature of the stakeholders to whom they are both responsible and accountable.

Do that "social responsibility" and "charitable works" of the multinational corporation have the same meaning? There is a clear distinction between social responsibility "of enterprises with various forms of" charitable donation. "Some businesses have often used the money into the community project, sponsored and established a scholarship fund support. In addition, they mobilize their workers to engage in voluntary social work, to create a feeling of goodwill with the public, and this will definitely help polish names of the Company, reinforce the image of the brand. But social responsibility of enterprises to go beyond the form of charity, because it also requires companies to have an obligation to think of the image their effects on all the subjects are their own shares as well as the natural environment before a proposed decision.

Larger firms may choose to engage one of the many independent consultants specialized in stakeholder mapping to help them with this or other CSR processes. As noted below, another consideration to bear in mind is the capacity of stakeholder groups to remain engaged in any ongoing consultation

Why CSR Is Necessary?

Why is CSR required? There are two levels of reasons. The first relates to globalization itself. In a sense, globalization is the creation of a new business era when a business corporation can enjoy an enormous amount of freedom. There is no single government or single law enforcement body to apply the same laws and regulations to all players. International agreements exist but can easily be ignored in a number of countries. In addition, most developing countries have very comprehensive laws and regulations but lack effective infrastructure to enforce them. Some developing countries might deregulate their standards or regulations in the fields of environment and labor because they want to attract more foreign capital. Thus business corporations that are operating worldwide enjoy an enormous amount of freedom today. However, freedom should be followed by responsibility. In the absence of responsibility, globalization itself might come to a dead end. This is one reason why business corporations are now trying to develop CSR policies and also trying to establish internal systems that make it possible to reduce negative impacts and increase the positive influences over external stakeholders. The second driver of CSR varies from country to country and region to region. Each society has different issues to be solved with the help of a business corporation.


People in the USA suggest that American corporations have been externalizing costs in order to report ever-increasing quarterly earnings, with costs passed on to everybody except for shareholders, such as consumers, workers, or the environment and community. In order to rectify such an excessively shareholder-centered management style in the USA, CSR is emphasized.

In Japan too, excessive CEO-centered management styles have also been criticized. Shareholders' meetings do not work properly and boards of directors are not functioning as the Japanese commercial law expected. Even labor unions do not play their own role properly. The problem was that CEOs had excessive power and could decide whatever they wanted. Until the early 1990s, this characteristic of Japanese management worked to the benefit of Japanese corporations because, with a long-term perspective, top managers could decide whatever they wanted very quickly. However, after the mid-1990s and especially after the long-lasting recession, this trait began to work to the detriment of Japanese corporations and society. In order to protect their own personal position, some top managers in companies began to be involved in unethical or illegal activity. As a consequence, in Japan, society expects business corporations to be much more ethical and more accountable than ever. The issue now is how to establish integrity in business corporations.

CSR strategy development and implementation could be considered as an organizational change process, or as a new way of organizing and working. The aim is to align the organization with the dynamic demands of the business and social environment through the identification and management of stakeholder expectations.

In addition to change, CSR involves learning over time and the ability to understand the specific context and confluence of stakeholder expectations. Whilst there is no best way to bring about change enhanced learning of stakeholder expectations and the specifics of the context will help to ensure that change is beneficial and supported by appropriate mechanisms. This requires managers to understand and be actively aware of both the context and expectations, but also to recognize that any changes they implement will also shape the environment in turn. The development of CSR practices can therefore be seen as an evolutionary and recursive activity, acting and reacting on and with the business environment. When considering how CSR can be implemented the literature offers various insights.

However, to our knowledge most studies on CSR typically focus on limited aspects. This means that an integrative framework has yet to be offered for the development and implementation of CSR in a fashion that is soundly integrated to the organization's strategy, structure, and culture.

World Health Organization (WHO) and CSR

WHO is the first global health organization, It replaced or absorbed many regional and national health bodies.

In the latter half of the 19th century, after several severe cholera epidemics, a series of international sanitary conferences were held in Europe to coordinate policy and practice around quarantine and disease management. The League of Nations established a health organization in 1920, and there were regional bodies as well. But the establishment of the United Nations in 1945 marked a period of aggressive internationalism and international organization-building, and though health was not initially thought to be under the U.N.'s purview, a motion by the Brazilian and Chinese delegates to establish an international health organization was unanimously accepted. A group of health experts who are working on emergency relief in the wake of World War II were charged with the task of drafting a constitution to define the structure and mandate of the body that would become known as the World Health Organization. C:\Users\uses\Desktop\who-logo.jpg

The work of WHO is mainly carried out by a secretariat; secretariat staff are led by a director-general and work in areas identified by an executive board and ratified by an assembly.

Public health is of interest for all stakeholders in a national, as well as an international, perspective. Health is not just absence of sickness - it is a part of life quality, something that most of us take for granted in our daily lives. A look around the world, however, reveals major health related flaws and problems. Some of these problems are related to natural catastrophes but others are tied to societal conditions or self imposed actions as a part of an unhealthy life style. Who carries the responsibility for health in a long term perspective?

Building and maintaining health promoting systems around the world can be divided into different activities and time perspectives: traditional public health - treatment and ongoing daily activities and health policy programs with a long term perspective.

A long term perspective is expressed in health policy programs that set the conditions for the future needs for health services. The perspective includes national issues such as taxation, social health related programs and educational standards. It is in the development of these long term policies and societal conditions for health that the long- term framework is set. These programs are aimed at preventive actions, to delay the onset of health conditions. So far, in most countries, health policy issues have been the primary responsibility of the government. Independent of health treatment system, private or state run institutions, the costs for health care are steadily increasing - and they are forecasted to increase even more if the issue of preventive health is not addressed. Preventive health in so called proactive health programs refers to engaging society at large in food security and health-related activities. However, in most of these analyses, the corporate role in this process is omitted, or simply not thought of, in the rather traditional analysis and suggestions of future improvements within the frames of the existing systems.

The World Health Organization defines health promotion as the process of enabling people to take control over, and improve their health. In a structural analysis basic prerequisites for health are identified as: peace, shelter, education, food, income, a stable ecosystem, sustainable resources, social justice and equity. These prerequisites are handled in five platforms for actions: building public health policies, creating supportive environments, strengthening community action, developing personal skills and providing health services. This paper is concerned with the platforms of building a supportive environment for continued CSR engagement. It is focused on businesses in general and food businesses in particular.


Today, social responsibility of enterprises covers many more aspects. Many studies have shown that only a modern enterprise is considered a social responsibility to: ensure their activities do not cause harm to the environment, is to show friendly environment during their production, this is a very important criteria for consumers' attention must be known to employees, their employees not only materially but also on mentally, forcing the employees to work until exhaustion or no solutions to help them recreate their labor power is a completely alien to the social responsibility of business; must respect the equality of men and women not be discriminated against in terms of gender in labor recruitment and payment of wages that must be based on equality of capacity of each shall not be discriminated against, denied or underpaid between normal and impaired body or face their past, to provide good quality product, not harm to the health of consumers, this is a very important criteria to show responsibility business to consumers aside part of their profit contribution for the aid community. For the community and burden to the community is a goal that businesses have social responsibilities are towards development goals alongside their profit, as the program supports African, Asian in the field of health care by billionaire Bill Gates is a typical example. Indeed, many children would have been saved; more children go to school more ... if businesses are willing to share benefits with the community.