Online Tutoring on CSR Operations

Introduction

The discussion as to whether companies are involved in CSR operations because engaging in it results in increased profits or they are simply good citizens is ongoing. In particular, the topic began attracting notable debates and controversies in 1970 when Milton Friedman stated in his article that the single companies’ social responsibility is to ensure maximum profits. So what is CSR? It can be defined as a combination of philanthropy, compliance and profitability. In other words, it is the companies’ ongoing commitment to ensure economic development while enhancing society, community and employee (including their families) life quality (Servaes & Tamayo, 2013). This essay is in support of CSR through noting the probable results by illustrating the many benefits that firms get. In supporting CSR, the essay will first examine its importance in sustainability needs, meeting social needs and in economic terms. Thereafter, it will focus on the advantages and disadvantages associated with CSR for corporations.

The importance of CSR in the three cited areas

CSR is important in a number of areas including the ability to meet economic needs and social and sustainability needs. In economic terms, it has played essential roles as firms that engage in CSR effectively normally experience several benefits. First, such companies experience positive impact in relation to motivation, recruitment and retention of workers (Zadek et al., 2013). In addition, such firms experience improved loyalty and satisfaction of consumers especially when consumers purchase products from them because of brand, reputation, trust or relationships (Johnson, 2010). Such firms will be reputable and will have improved detection and response to risk. Additionally, they expect their stakeholder needs with more certainty and they can be easily pardoned in case something goes wrong. As a result, firms save on cost and operate efficiently. In addition, they have better capacity to innovation, new product development and ensure creativity with stakeholders.

In meeting social needs, people are able to be aware of their personal values through business as they feel higher achievement levels and have confidence that their business is essential to the world and society(Zadek et al., 2013). People experience less regrets, as they are happy to work, never taking it as unrewarding and tedious. Companies are informed about the challenges that the world faces. Through CSR, firms give back to the society through fundraising, donations and voluntary activities and struggle to ensure the world is better. Based on meeting the sustainability needs, CSR has ensured that the needs of the current generation are met without necessarily compromising the next generation’s capacity to achieve their own wants. Through effectively engaging in CSR, firms are informed about the global trends while they remain committed to their financial obligations and hence, they provide public as well as private benefits. Companies, which are most socially responsible, go on revising both their long and short-term aims and hence, they have always been ahead of the challenges, which are rapidly transitioning (Falkenberg & Brunsæl, 2011).

The advantages of CSR for corporations

CSR has a number of advantages for the corporations. To begin with, people vote with their pocketbooks and feet (Falkenberg & Brunsæl, 2011). Here, corporations with practices, which are more acceptable would probably have more satisfied owners, workers and consumers and therefore, firms will live longer and go through difficult conditions. In addition to the previous advantage, it is evident that corporations have greater knowledge as compared to governments and people and therefore, the corporations have greater probability to be able to utilize this knowledge of being more informed to tailor their services as well as products to the relevant constituencies (Devinney, 2009). Companies are involved in a continual and active research, which aim to come to terms with the needs of different stakeholders and implement the research.

In addition, corporations understand operating trends, technologies and trade-offs in the society(Devinney, 2009). Further, corporations can execute them in a more realistic and rational manner as compared to governments. Finally, through effectively engaging in CSR, corporations are able to involve themselves efficiently in the social “experimentation” since they are free of the transparency but which is necessary for a number of civil society organizations and governments (Servaes & Tamayo, 2013). Of course, the competitive markets’ natural entrepreneurial spirit means that markets, which are free, are continually engaging in experimentation.

The disadvantages of CSR for corporations

Although there are a number of advantages for corporations, they also have significant disadvantages as well. To begin with, corporations are primarily established for economic reasons, not to solve the problems of the society (Servaes & Tamayo, 2013). Corporations exist to optimize themselves including governments, suppliers, workers, managers, shareholder etc. and not the public in general. Therefore, this is the reasonable expectation that companies needs to engage themselves in and any anything, which mitigate or influence this such as engaging in CSR, would have underlying costs. Secondly, companies reduce the standards of the society to their own requirements when they engage in CSR (Devinney, 2009). This can be primarily in two ways with the first being the utilisation of policy capture as well as indirect and direct influence of politics. As earlier mentioned, among the advantages of CSR engagement is that firms understand the trade-off constituencies’ cost and benefit in a better way. However, companies would operate proactively to ensure valuable parts, based on their thinking, are treated differently. Corporations also use CSR as a competitive weapon.

Further, corporations do not represent the entire society(Johnson, 2010). Primarily, they represent the middle class in the urban and not the disadvantaged and the poor and society’s geographic spread. Finally, a number of corporations are socially and naturally conservative; therefore, they will not engage in any form of experiment before there is evident profit from it. Thus, this conflicts the previous argument. However much they may have the incentives to experiment with the markets and products, corporations would not engage in those experiments that may be socially confronting.

Conclusion

In summary, given the strong tug towards CSR in business today, the issue for a firm is not about whether or not to engage in CSR programs but rather the most efficient and effective way that it should design the CSR programs, which are a reflection of its business values, while addressing environmental, humanitarian and social problems. Although CSR is associated with some disadvantages, the positives overweigh the negatives; hence, effectively engagement is necessary.

References

Devinney, T. M. (2009). Is the socially responsible corporation a myth? The good, the bad,

and the ugly of corporate social responsibility. The Academy of Management

Perspectives, 23(2), 44-56.

Falkenberg, J., & Brunsæl, P. (2011). Corporate social responsibility: a strategic advantage or

a strategic necessity?. Journal of Business Ethics, 99(1), 9-16.

Johnson, K. R. (2010). “Is the socially responsible corporation a myth? The good, the bad,

and the ugly of corporate social responsibility” by Timothy M. Devinney in Academy

of Management Perspectives, May 2009. Organization Management Journal, 7(1),

82-84.

Servaes, H., & Tamayo, A. (2013). The impact of corporate social responsibility on firm

value: The role of customer awareness. Management Science, 59(5), 1045-1061.

Zadek, S., Evans, R., & Pruzan, P. (2013). Building corporate accountability: Emerging

practice in social and ethical accounting and auditing. Routledge.