CSR in business - Free Essay Example

The Corporate Social Responsibility explants the role of the firm to shareholder and society. Now a day people are very concerned about environmental and social problems because many problems caused by man. There are many engaged in campaigns to stop destroying and social returns. When talk about the return to society, most people will think of donation that is just the nature of a long tradition. Current concepts that are most accept in principle of return to society in business, it is called CSR (Corporate social responsibility) which a business concept that is becoming the global flow. However, companies need to learn indeed about patterns, mechanism and benefits of CSR. In order to CSR is not to become a popular business flow, then fire quickly or that is the way as the business can show off. This paper display a definition of CSR (Corporate social responsibility), following to Sources of Pressure for CSR that express impact of originated the idea CSR in business. In addition, to describe the elements of CSR: Internal Responsibility Dimension and External Responsibility Dimension, which expound extremely appearance of CSR. Moreover, describe the role of firm, in relation to shareholders with social responsibility. Furthermore, the advantages of CSR for organization and the advantages of CSR for the society. Not so long the representation of CSR is always presented by many companies in the dimension of social and environmental responsibility. However, the genuine essence of CSR is not merely emphasized on the reimbursement to society but it as well involves the sincere and considerate care for stakeholders regarded as the main force instrumental in catalyzing the companies to excellences. According to Brussels (2009) said that CSP 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. Moreover, supporting information from UNITED NATIONS (2004) said that the society grants all legal entities, including enterprises, a licence to operate by spelling out their rights and duties in laws and regulations. Liberalization and globalization have enabled enterprises to extend their business reach, thus putting them in a position to have an even greater impact on society. Furthermore, according to corporate social responsibility: making good business sense book by Holme, R., Tinto, R., Watts, P. (2000) said that CSP be the human face of the highly competitive world of commerce. Perception of this human face is a vital and necessary part of societys willingness to accept the significant and sometimes (at least in the short-term) difficult changes brought about by elements of globalization. And update to another years in Corporate Social Responsibility The WBCSDs journey by Holme, R., Tinto, R., Watts, P. (2002) Corporate social responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life. Overall, CSR (Corporate Social Responsibility) is the corporate business strategy to focus on the environmental and social. Those focuses of business have benefits to people and social which express social responsibility of business. In addition, the company must regard its stakeholders that most important to organizations. Sources of Pressure for CSR CSR from the trend of people In fact the concept of CSR had been occurred more than 200 years since 1790, but not definitive set up word. Example according to Kaye, M. (2009) British East India Company has been ban from people due to discover that used slaves. As a result the company turns to attention of labor welfare and a human right. Although doing CSR at the first is not a good intent from organization, but business which has image on social responsible, showing that they are a part of society, this is strong pressure on people to consume products or services from those organization instead of the competitors which does not known CSR. This is likely Brand Royalty to increasing revenue of organization. Conversely, which organization lack ethics, people will not support or boycott the products from that organization. That business would not continue. CSR from stockholders and Investors Approximately 1927, starting a business approach to social investment has been known as Socially Responsible Investing. Currently SRI is the fund which invests in companies that have CSR. This is another form of making CSR as a significant, because those investors have more roles to push the plug on their business concern strongly about corporation social responsibility. CSR from communalities In community development, the Department of Foreign Affairs has written on the concept of CSR is increasing. For example Carmichael, I. (2005) said that the first recorded uses of Social Audit were in the United States in the 1939s, as a result of the Great Depression, economist Professor Theodor Kreps from Standford Business School. Which was mentioned in that book, the business should report activities that show social responsibility of organization. In 1953, book name Social responsibility of the businessman had been published by Howard Rothmann Bowen said about the social responsibility of investors. Bowen, H.R. (1953) Following in 1960s, book name The Responsible Company by George Goyder CSR had developed a concept to more prominently. In the same time, negative effects from used DDT as a result of contaminants to the environment. Lead to claims of environmental flows. CSR with multilateral organizations Due to attention environmental subject matter more. Enable CSR with Globalization Enterprises expand globally. Without control of humanitarian principles. Standard or equivalent will result in the case with NIKE products in poor countries. Underprice less drastic labor. To the sales price of highly developed countries far short of good corporate ethics. The rights and welfare of workers, etc. If you look at it positively. Multinationals. Each supplier and / or local branches around the world, if the parent company to use the principles of CSR with suppliers and other local or branch with the world economy and society will develop simultaneously. Dimension of CSR According to Carroll, A.B. (1979 , CSR covers the full range of dimensions that make up an organizations responsibility, which are four: economic, legal, ethical and philanthropic. These four dimensions of CSR components identified by Carroll are defined by Brussels (2001) in Commission of the European Communities, which distinguishes two large areas of corporate social responsibility: Internal Responsibility Dimension: Human resource management as a social responsibility such as Life-long learning, to provide overall transparent information to employees, making balance between work, family and leisure, Its implementation must be fair, Recruitment process etc. Moreover, the organization should concern about in term of health and safety of workers. Although there are laws controlling health and safety at work, but the flow distribution to the supplier may be cannot controlling, It is an interesting issue that should help to maintain a policy or set of organizations such as selected as part of the business or use a supplier moral ethics with employees, this is another way controlling. Furthermore, the adjustment to economic changes, social and political. Build cooperation among related companies. Whether investors, employees and customers, executives would bring problems effectively and more sustainable. Resource and environmental management. Reducing resource use and emissions or waste. This minimizes environmental impact. There is a benefit to the organization to manage the products and services. Provide more effective. It also reduces energy costs. And waste management. Which leads to higher profits. Ability to compete in the growing mark et. The most important is building the company considers to win the final of the Corporate Governance and Transparency in operations now confident that the company is most important. The only companies listed. Therefore, transparency and decision-making process of a clear check is extremely important to both. Security company. In view of investors. And stability in society. External Responsibility Dimension: Supplier and partner management with business social responsibility. Should consider the role of corporate social responsibility. To the expansion of corporate social responsibility into their related organizations also continue to oversee consumer is important because it is a source of income. Therefore, a system of care to consumers of products in every process to secure effective in both qualitative and price. Social responsibility nearby. Normally it will benefit the existing community, such as the labor community. And creating tax revenue for the area. This led to public capital can bring benefits to the community-building visit again. In addition, the overall social responsibility activities, such as donations or support in various forms to edit and social development. Finally, the responsibility for global environmental, human rights, such as regional or global, as appropriate, and organizational capabilities. Companies can collaborate with N GO organizations such as government institutions. Cooperation that delay or organization. To help protect the world and share together. Consequently, all organizations that approve the principles of CSR as their policy must be well conscribe of the interests provided to the stakeholders in the long-term run. At the same time to create the organization reliable and confident among the stakeholders, the management team must function its business within the structure of CSR in a more substantial and consistent way to bring benefits to all relevant parties. As a result of the statute of thumb is that the survival of the stakeholders means the survival of the business in the long term. According to Freeman, E. (1984) said that the stakeholder that it includes a group or individual who control of is affected by the achievements of the company associated to the main objectives of the business operation. The influences of stakeholders can be obviously reflected when they decrease and stop supporting any organization that runs the business with immorally or avoid the basic morality. They might stick together and boycott the consumption of particular products that provide priority only to profit-making and turn their back on the severely environmental utilization caused by them. Today many large enterprises around the world such as Toyota, Honda, Samsung and LG Electronics to focus on construct relationships with stakeholders. As stated the first group of stake holders to quote is shareholders of investors who can be individuals or institutes. They are esteem the important group who can increase the investing cost to the organization. At the fact, more and more shareholders are willing to invest with the company that embraces the concept of CSR as its main strategy, because it means that they will be treated equitably and honestly. Alongside, it also reflects that the company they are going to concern over doesnt only focus on making a maximum profit, but it also growth a sense of sharing and caring to its staff, donate to society, and involve with the environmental issues while developing its organization. Also any shareholders who are encourage with morality and ethics prefer to invest their money in the principled company that furthers the art of giving m ore than the art of taking. Thus, the investment with the responsible business is conception as the socially responsible investing or SRI which now is widely suitable among the investors worldwide. When quote about the relationships between the organization and the shareholder the popular definition used to identify such a connection is Corporate Shareholders Engagement, meaning the participation and the important roles of the shareholders related with the policy-making or decision-making processes that can affect the stability and images of the organization. Hence, the shareholders must have the rights to sustain the companys stability just like the management team and the staffs do. More significantly, the shareholders can sanction the company to run the business with transparency and adapt its management direction to decrease any potential impacts and other environmental, social, and governance risks. So, the shareholders play a considerable role in catapulting the organization to stand in the forefront and function the responsible business that get together the international standard when it comes to the social, environmental, and governance management. Furthermore, apart from getting the regular information on the companys annual performances, finances, profits, and losses, most shareholders in several organizations yearn to access to the companys information over its responsible operation. In addition, the investment in the company that truly approves the CSR can guarantee the potential loss incurred from the dishonest operation of the company. The clear-cut, verifiable, and easily accessible information concern with the company will result in the stable investment and when it happens the company will also get the benefits. It can entrance to more investments which can help expand its investing base. Moreover, the CSR policy is also significant to the effective operation and the dedication of the management team to develop the organization which in turn can guarantee that the shareholders will get their dividend consistently and fairly. On the other hand, The reputation of any organization that tends to bury the important information concerning about its operation and show no responsibility for shareholder like corruption the companys capital to benefit the decision-makings or treating the minor shareholders unfairly will be undermined, hence staining its image and declining its stability both in short and long terms. Over the last several years, worlds big organizations, especially in USA, have responded to shareholders role more attentively and seriously after the scandal over the right of shareholders in one big company, leading to the permanent loss of shareholder value. Besides, investors in Canada, England, and Europe starts using the similar strategy to keep up their power as the shareholders by participating in the operation and monitoring the companys activities up close. Socially responsible investing also gets its root in Asia although in less dynamism contrasted to other regions of the world. Countless organizations also set up the formal communication model and process as the companys main policy just in case that they have to inspiration and have a talk with shareholders. When there are any uncertainties, criticisms, or suggestions from shareholders the company will give them priority and make all things clear among shareholders in a real quick. Moreover, many companies revelation that they earn great benefits from shareholders valuable viewpoints when it comes to the companys strategic planning. Besides, they also receive various business benefits through the exchange of information and communication with shareholders such as the great relationships between the organization and shareholders which can maintain the companys reputation and decrease any risk of negative news over the conflict with shareholders. Furthermore, the regular communication between the management team and shareholders will also lead to the early examination of any problems or situations that can d estroy the companys fame. For example, a group of shareholders of one of the worlds biggest oil company infers the company not to be a partner with Taliban government in 1996 in order to secure the companys reputation and avoid the possible loss the company might encounter after the September 11, 2001 and the war in Afghanistan. More significantly, the communication between the management team and the shareholders over the social issues can carry on the executives abreast of the current situations of the community. They are also reported to the companys status through the eyes of the public and other groups of stakeholders. The meetings can carry on the management team to be more aware and well prepared for the future issues demanding the companys persistent attention. Information provided by shareholders lets the management team to give first and second priorities to particular events and concurrently operate its business in line with the companys main concepts and moralities. Gian t companies like Intel and Hewlett-Packard even have standard schedule for the conference between the management team and shareholders who can offer direction for making the plan and policy concerning about CSR. The advantages of CSR for organization The use of CSR as a tool for companies strategy and public relations takes economical success, because economy and stock exchange recognize more and more that sustainable oriented companies which for the future. The Triple Bottom Line Reporting is well known, beside information of the balance sheet and RD capacities, also information and facts about the company as a corporate citizen is included. Moreover CSR is a proficient instrument of how to attach your workers to your companies. Last but not least also the consumers have a power to say, an international survey brought the result that 70% of the consumers make their resolution whether to buy a product or not on the basis if the company demonstrates societal responsibility or not. Thus, an advantage in the personnel market, that means the companies will get the best workers, get better the relationship to your customers, also more security to shareholders and owners. The advantage of CSR for the social The economic progress brought prosperity to a lot of people and therefore they have the opportunity to create their way on their own. It seems that financial and social lives are secure for many people. Nowadays it is essential to ask about your own identity and individuality. Therefore it is more and more necessary to create conditions of work in which high qualified workers can use their know-how. To feel good in your job is a very important fact in order to employ the best and most creative workers. CSR helps the companies to include the needs of society in their companys strategy. So the key to establish lasting relationship with a group of shareholders involves sincere and straightforward communication. Besides, the executives must allow shareholders to learn more about their management for the harmony, transparency, and accountability of the organization. In addition, shareholders crucial role is to encourage the organization to run its business within the framework of CSR, which will ultimately lead to the responsible and sustainable business. References Bowen, H.R. (1953), Social responsibilities of the businessman, Harper, New York. Brussels (2001), Commission of the European Communities: Green Paper Promoting a European framework for Corporate Social Responsibility, Commission of The European Communities. Brussels (2009), Corporate Social Responsibility (CSR): Europe, https://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/109format=HTMLaged=0language=ENguiLanguage=en accessed 28/12/2009 Carmichael, I. (2005), Pension power: unions, pension funds and social investment in Canada, University of Toronto Press Incorporated. Carroll, A.B. (1979), A three-dimensional conceptual model of corporate social performance, Academy of Management Review, 4:4, 497-505 Freeman, E. (1984), Strategy management: Stakeholder Approach, London Pitman. Holme, R., Tinto, R., Watts, P. (2000), Corporate social responsibility: making good business sense, Shell Group. Holme, R., Tinto, R., Watts, P. (2002), Corporate Social Responsibility: The WBCSDs journey, World Business Council for Sustainable Development. Kaye, M. (2009), Brithis History in-depth: The Tools of the Abolitionists, BBC, https://www.bbc.co.uk/history/british/abolition/abolition_tools_gallery_07.shtml, accessed 2009-11-05 Kim, Y. (2009), Global Business: Lecture 9 Corporate Social Responsibility in Global Business, p13. Kim, Y. (2009), Global Business: Lecture 9 Corporate Social Responsibility in Global Business, p1-19 Mahoney, J. T. (2005), Towards a Stakeholder Theory of Strategic Management, University of Illinois at Urbana-Champaign. Nowak, M. Thomas, G. (2006), Corporate Social Responsibility: A definition, working paper series no. 62 (Curtin University of Technology, Graduate School of Business). UNEP (1992), United Nations Environment Programme: Organization Profile, UNEP. United Nations, (2004), Disclosure of the impact of corporations on society: current trends and issues, United Nations.