Corporate Social Responsibility With Respective Stakeholders

Question: Discuss about the Corporate Social Responsibility and With Respective Stakeholders. Answer: Considering the above quote from Howard Schultz, it becomes all the more important to analyse what does corporate social responsibility mean and why it is important for corporate? Corporate Social Responsibility ( CSR) is the concept through which the organizations take steps to integrate their environmental as well as social concerns in relation to their business operations along with their interactions with respective stakeholders ( for example customers, government , employees, local communities , government and shareholders) on voluntary basis (Agle et al., 2008). The topic of CSR has been referred by different names for example corporate citizenship, other monikers, strategic philanthropy, as well as social responsibility and each name carries specific perspective about the role played by business in the society. However, the dominant paradigm that underlies CSR is the idea to develop shared value (Rangan et al., 2012). As per this model the major role of any business is to deve lop and create value for all its shareholders in such a manner that it also creates value for the society as well. Through this essay we will also analyse whether CSR is beneficial strategy for business and society or not. The entire concept of CSR started off in 1920s but did not become much popular until 1950s and it came into spotlight when Frank Abrams in 1951, published an article in Harvard Business Review , being the chairman of the board for Standard Oil , New Jersey . He stated that CSR is business obligation, so that it conducts the business affairs in order to maintain an equitable as well as workable balance between the claims made by various directly interested groups and create a balance that is harmonious between the customers, employees, stockholders as well as the public at large (Frederick, 2006). With continuous evolution the academics and businesses laid emphasis on CSR initiatives in their business strategies. It was during this period the stakeholders role came into prominence in the CSR debate because of the major contributions made by well known academicians like Peter Drucker (Lee, 2008) . Advantages of Corporate Social Responsibility are immense as can be seen from its inclusion of innovation , strategic philanthropy, transparency as well as environment sustainability which indicates the diverse and far reaching impacts of CSR that have been embedded in management strategy(Lubin Esty, 2010). There are various kinds of CSR as per their benefits for corporations like : Environmental CSR ( focussing on eco-issues like climate changes for example The Body Shop); Community-based CSR ( to improve the quality of life of people belonging to local community for example Starbucks) ; HR-Based CSR ( improving the wellbeing of the staff for example Google) and Philanthropy ( donating money towards good cause mainly through charity partners for example Microsoft) (Cooper Schindler, 2006).Some of the positive outcomes that the organizations achieve by adopting CSR policies include enhanced financial performance, enhanced brand image as well as reputation ; improved quality and pro ductivity; reduced regulatory oversight ; more workforce diversity; minimal operating costs; improved and enhanced sales as well as customer loyalty; improved ability to attract better talent , while retaining the employees; access to capital and it also brings along product safety and lesser liability (Sivaranjini et al., 2013). CSR not just brings benefits for the organization implementing rather it also proves to be beneficial for the community as well as general public through employee volunteer programmes; product safety as well as quality, makes charitable contributions and higher involvement of corporate in community employment, education as well as homelessness programmes. Along with the community advantages CSR also brings environmental benefits like greater material recyclability, more and better product functionality as well as durability , more usage of renewable resources and integration of various tools for environmental management in the business plans that includes eco-labelling, environmental management standards as well as life cycle assessment (Windsor, 2004). One hand there are so many benefits of implementing CSR but while balancing the diverse interests of the stakeholders brings along several challenges as well as dilemmas , however they can be handled in quite effective manner by organisations through strategic stakeholder management (Massachusetts Institute of Technology, 2011). One major disadvantages of Corporate Social Responsibility is that when the firm makes the decision which should just benefit the investors, it affects various other stakeholder groups. In such case the employees might get terminated for enriching other shareholders. This will certainly have a negative impact on the economy. Another disadvantage associated with CSR is that the costs attached with it disproportionately impact various smaller businesses. On one hand the huge corporations are capable of easily affording the huge budgets towards CSR reporting, but this is not the case in case of smaller firms that have between 10 and 200 employees. However small businesses can use social media for communicating their CSR policies to the local community as well as customers. But that too takes enough time in order to monitor the exchanges and this could also invite extra costs for hiring extra personnel. Some critics even say that the entire exercise of CSR is futile because the management of any organisation has fiduciary duties towards it shareholders, that are opposed by CSR policies in direct manner (Militaru Ionescu, 2006). Thus a manager who forsakes the organizational profits to bring about few benefits for society can result in losing job and will be replaced by someone who gives priority to profits . Some organisations just talk about CSR while doing nothing which is termed as Greenwashing in todays world. After analysing the far reaching impacts of CSR and the corporate financial performance along with the measurement of various CSR activities indicates that the corporations are understanding the varied strategic value of CSR by realising its implications towards business operations is very much essential ( MIT 2011). In current fast paced world every business is it small or big should have a CSR program in place and it should be a part daily business practice in order to keep the trust of the people important for business. Although many organizations are simply greenwashing, but still the organizations need to adopt CSR and work towards shaping a sustainable society. Bibliography Agle, B. et al., 2008. Dialogue: Toward superior stakeholder theory. Business Ethics Quarterly, 18(2), pp.153-90. Cooper, D.R. Schindler, P.S., 2006. Corporate social responsibility Business Research Methods. Tata McgRaw Hill. Frederick, W., 2006. Corporation, be good! The story of corporate social responsibility. Indianapolis: Dog Ear Publishing. Lee, M., 2008. A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead. International Journal of Management Reviews. Lubin, D. Esty, D., 2010. The sustainability imperative. Harvard Business REvw., 88(5), pp.42-50. Massachusetts Institute of Technology, 2011. Sustainability: The embracers seize the advantage. MIT Sloan Management Review, pp.https://www.mitsmr-ezine.com/busofsustainability/2009#pg1. Militaru, G. Ionescu, S., 2006. THE COMPETITIVE ADVANTAGE OF CORPORATE SOCIAL RESPONSIBILITY. U.P.B. Sci. Bull., Series D, 68(2), pp.89-98. Rangan, K., Chase, L.A. Karim, S., 2012. Why Every Company Needs a CSR Strategy and How to Build It. Harvard Business School. Sivaranjini, P., Rekha, T. Nisha, T.S., 2013. Issues and Challenges Faced By Corporate Social Responsibility In Community Development, India Human Resource Development. 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