SUZETTE N. ALEJANDRO
Divine Word College of
Laoag
ABSTRACT
Corporate social responsibility is a
philosophy, a priority and accountability rather than merely a policy.
Effective corporate social responsibility policies typically require
organizations to commit to both an internal and external approach to ethics,
although they do not automatically equate to lower profitability. However, what
exactly does "corporate social responsibility" mean? Who is
advocating for businesses to be socially responsible, and for what reasons?
This article covers the progress of the CSR concept as well as some of the
attempts to define the social responsibilities of businesses. This article also
discusses the benefits of CSR and how to implement it effectively.
Keywords:
Corporate Social Responsibility, Stakeholders, Consumers, Community, Employees,
benefits of CSR, implementing CSR
INTRODUCTION
The business
serves both economic and social purposes. It is the only activity that has an
impact on all facets of society and the country. Businesses innovate, create
new goods and services for people, produce goods and services for the nation
and society, and create new molecules to treat human illnesses. The business
also creates jobs, generates income, exports, and collects taxes to help the
government run smoothly. The business also makes use of the resources of
society and the nation. But this only represents one side of the story; the
other side is all about the exploitation of human and natural resources, sexual
harassment at work, political funding of business interests, the spread of
materialism and pollution, the encouragement of terrorism to increase the sale
of weapons and ammunition, the sale of tobacco and alcohol, acid rain, global
warming, and numerous other human rights cases of abuse.
More so, as discussed by Byars (2018), the environment and
sustainability have been the concerns responded to by the corporations to their
stakeholders. Corporations and customers are becoming more and more aware that
their actions can and often inflict harm to the environment. Destruction of the
environment can ultimately lead to a decrease in resources, limited business
prospects, as well as a lowered quality of life. Businesses that harm the
environment frequently conceal their actions to avoid being discovered and
suffer financial loss, legal penalties, or social consequences. The Earth
itself, which is affected negatively by their hidden actions, maybe the only
testimony.
Moorhead (2016) stated that
smart business executives must be aware that a stable foundation is necessary
for a company to build and enhance its commitment to sustainability and
corporate social responsibility (CSR).
CSR DEFINED
What is CSR, one would begin
to wonder. Simply defined, it is essentially giving back to society. CSR,
however, is defined by the World Business Council for Sustainable Development
as "the ongoing commitment made by businesses to act ethically and to
contribute to economic growth while strengthening the quality of life of
employees and their families as well as those in the community and
society."
More
so, social responsibility refers to the business decisions and actions that are
at least partially made for purposes other than the organization's immediate
economic or technical interest (Mittal 2008). Most CSR activities are related
to sustainability, environment, safety, and gender issues (Tian et al., 2011).
Additionally,
CSR also refers to an organization's efforts to address a wider range of social
and environmental issues and concerns (Lindgreen et al., 2010). Also, CSR is generally understood to be
“beyond what is required by law”, i.e. beyond legal conformity (Buhmann, 2006).
Corporate
social responsibility (CSR) is also known by several other names. These include
corporate responsibility, corporate accountability, corporate ethics, corporate
citizenship or stewardship, responsible entrepreneurship, and “triple bottom
line,” to name just a few. As CSR issues become increasingly integrated into
modern business practices, there is a trend towards referring to it as
“responsible competitiveness” or “corporate sustainability” (Hohnen 2007).
SOCIAL RESPONSIBILITY
OF BUSINESS
No
business can run its own in complete isolation. A business depends on a variety
of interactions with its stakeholders, which include its shareholders, customers,
employees, suppliers, communities, and others.
According
to Mittal (2008), there are four significant groups that both influence and are
influenced by business, and business is expected to recognize its
responsibilities towards these groups. These categories are:
1.0 Responsibilities to
Shareholders
Not
all corporations have the luxury of not needing shareholders' cash. Many do
need capital from equity investors. They frequently represent the new,
expanding businesses that we all want to see more of. These businesses might
stay in low gear or never even get moving without shareholders who are ready to
take risks that a bank or a bondholder would not (Fox et al., 2012). Shareholders
who have invested in businesses have only one interest: making money. They have
invested money to make money. Thus, organizations' main duties include
increasing shareholders' wealth, providing a good return on investment, paying
dividends on time, protecting the interests of even small shareholders,
listening to and respecting shareholders, and regularly inviting shareholders
to participate in decision-making (Mittal 2008).
2.0 Responsibility to Employees
Employees have a key role in the
success of the company. Employees are no longer considered the organization's
most underutilized resource. As
stated by Costas, J., & Kärreman, D. (2013), CSR functions as a method of
aspirational control that binds employees' ethical conscience to the
organization and aspirational identities.
Organizations
have many obligations to their employees, including fair treatment, no bias
based on sex, cast, or creed, equal pay, fair and performance evaluation
system, a pleasant and secure working environment, establishment of equal
employment standards and norms, the provision of job welfare facilities, equal
chances for accomplishment and promotion, proper recognition, appreciation, and
encouragement of special skills and capabilities of the worker, and provision
of labour welfare facilities.
More importantly, all employees must
be given the chance to participate in managerial decisions regarding
appropriate and desirable training and development programs, allowing workers
to grow as individuals in response to the changing environment.
Finally, consider family well-being.
That is, if employees' home lives are less problematic, their productivity will
be high (Mittal 2008).
3.0 Responsibility to Consumer
Consumers
are generally aware of a company's CSR behaviour and its impact on the
environment and the community (Tian et al., 2011). Consumer interest in
corporate social responsibility (CSR) has increased over the past ten years
(Carrigan and Attalla 2001). Several
reasons for this have been advanced: On the supply side, businesses are
becoming more involved in CSR activities and place greater focus on promoting
their CSR efforts while, on the demand side, consumer advocate groups are
highlighting unethical corporate behaviour and encouraging boycotts (Snider et
al. 2003). More so, consumers actively seek out goods from companies that conduct
business ethically as they become more conscious of the value of social
responsibility (Collier 2018).
Organizations have many obligations
to their customers, including the following: to offer products of known
quality; to ensure that products are delivered to customers and to prevent any
form of profiteering by middlemen and fraudulent individuals; to provide goods
at reasonable prices; to offer necessary after-sale services and to ensure
that spare parts are available on the market; to fulfil its commitments impartially and
courteously following applicable laws; to ensure that the product supplied has
no negative effects on the customer; to hear and address the genuine complaints
of the customer; to hear and address any type of cartel formation, and finally,
to provide sufficient information about the product, including their adverse
effects, risks, and care to be taken while using the products.
More importantly, consistent
research and development are essential for enhancing and innovating the offered
goods and services (Mittal 2008).
Note that companies who consistently
adhere to high standards for the safety of products and services have a
significant competitive edge over their rivals (Benoit, 2013).
4.0 Responsibility to Community
Communities are interacting with
corporations more frequently now than in the past, a development supported by
the reduction of trade barriers through international trade agreements,
attempts to strengthen the rights of foreign investors and broader processes of
national liberalization across many developing nations (Newell 2005).
Simply,
the business has a variety of responsibilities to the community: to prevent
environmental pollution and to maintain ecological balance; to increase
operational efficiency; to support research and development; to promote
small-scale industry; to promote the development of the region in which they
operate; and, finally, to take steps to conserve limited resources and to
develop alternatives, whenever possible (Mittal 2008).
BENEFITS OF CORPORATE SOCIAL
RESPONSIBILITY
The advantages of CSR speak
effectively about how crucial it is and why you should try to implement it in
an organization.
Collier 2018 stated some clear
benefits of corporate social responsibility which are:
1.0 Improved public image.
This is important since customers consider your reputation when determining
whether to buy from you. Simple things like employees giving an hour a
week to a charity demonstrate your company's commitment to doing good. As a
result, consumers will view you considerably more favourably.
2.0
Increased
brand awareness and recognition. If you're dedicated to
moral behaviour, this news will get around. Your brand will become more widely
known as a result, of raising brand awareness.
3.0
Cost
savings. Your production expenses can be reduced by
making some easy modifications in the direction of sustainability, such as
using less packaging.
4.0
An
advantage over competitors. You distinguish yourself from
rivals in your sector by embracing CSR. By taking social and environmental considerations
into account, you position your organization as one that is dedicated to going
above and beyond.
5.0
Increased
customer engagement. You should announce your use
of sustainable systems loud and clear. Create a tale out of your efforts and
post it on your social media platforms. Additionally, you should showcase your
work to regional media in the hopes that they will cover it. Customers will pay
attention to this and interact with your brand and activities.
6.0 Greater employee engagement. Similar
to consumer involvement, you should make sure your staff is aware of your CSR
initiatives. It has been demonstrated that workers prefer to work for a company
with a positive public image over one without. Furthermore, you'll be far more
likely to attract and keep the best candidates if you demonstrate your
commitment to causes like human rights.
7.0
More
benefits for employees. When you embrace CSR, your
employees might get a variety of advantages. By encouraging activities like
volunteering, you foster both personal and professional development and make
your company a more positive and productive place to work.
IMPLEMENTING CORPORATE SOCIAL
RESPONSIBILITY
How is CSR implemented? Small
and large enterprises alike should both invest in CSR. When we hear the term
CSR, we often picture expansive, international programs that both large and small
firms may find difficult to implement.
Collier (2018) cited some
corporate social responsibility for small businesses and these are getting
involved with local communities like
participating in local events, attending fiestas, patronising and buying from
local suppliers; volunteering; going green or reducing the amount of
electricity used and recycling and upcycling of used materials; alternative
transport methods like embracing the benefits of carpooling and taking public
transport to work; and lastly to support the development of employees, ensuring
that your employees feel happy, healthy, and safe whilst at work.
These are the suggested steps by Hohnen (2007) on how to implement CSR in large companies, first to develop an integrated CSR decision-making structure; prepare and implement a CSR business plan; set measurable targets and identify performance measures; engage employees and others to whom CSR commitments apply; design and conduct CSR training; establish mechanisms for addressing problematic behaviour; create internal and external communication plans; and lastly to make commitments publicly.
CONCLUSION
Indeed, corporate social responsibility (CSR) is a philosophy, a priority and accountability. It is simply defined as essentially giving back to society. An organization must conduct itself with a sense of social responsibility. It is seen as good practice for the business to consider social and environmental issues, even though it is not required by law. CSR implies that a company cares about broader societal concerns as well as those that influence its profit margins, which will draw clients who share their beliefs. As a result, conducting business sustainably makes sense.
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