Corporate Social Responsibility: Definition and the Likely Benefits

Corporate social responsibility refers to a situation where businesses adhere to ethical regulations and international norms. Businesses are always advised to take responsibility for the impact of their activities on the environment, societies, communities, employees, customers, the public as well as stakeholders. Corporate social responsibility has been a hot debate everywhere on the globe and pressure is mounting on every business enterprise to take responsibility for its actions on the environment (Cavett-Goodwin, 2007).

Organizations depend entirely on the environment and that without the availability of natural resources on the environment their scale of operation can be severely curtailed. The communities from where these resources are found may have played some crucial roles in protecting these resources and need to be compensated accordingly. Several stakeholders including suppliers, consumers, and even employees also want to ensure that the firm is seriously looking into their welfare (Cavett-Goodwin, 2007).

In developed countries social corporate roles may include organizations supporting community development programs like environmental conservation, funding local charities, church development, and children orphanages, sporting activities (Farnham, 2008).

Since there is interdependency between organizations and the environment, societies and people mutual benefits should be accruing to every party. This is the only way a business can ensure a strong and perpetual relationship with the environment. The manner in which organizations meet these ethical values is the way the general public perceives their responsibility in the business place. As we have discussed above a lot of pressure is exerted on these organizations by laws and the government to take charge of their impact on the environment (Cavett-Goodwin, 2007).

Cases for social responsibility

Corporate social responsibility is one area in the organization that has attracted very interesting arguments. However, the following are some of the likely benefits that are associated with corporate social responsibility. Although it may not be easy to quantify the impact on an organization it is equally significant enough to highlight them as follows:

Public image

An organization that gives priority to the environment by observing the relevant ethical considerations is likely to attract larger public attention than one that does not. In this manner, the given organization is likely to increase its market share and establish a good and perpetual relationship between the people and itself. This is strategic, especially where a firm wants to position itself in a dynamic industry. Most manufacturing firms are always under put under pressure to strictly take responsibility for their own impact on the environment (Cavett-Goodwin, 2007).

Multiple objectives

Businesses are not just investment vehicles; they have other roles to play too. In this sense, it’s equally interesting to see how a business may play more than just a role in society. Since big organizations do not exist to make profits only corporate responsibility prominently features in their agenda. According to Peter F Drunker, there are several objectives that an organization can achieve. These include profitability, customer care, corporate social responsibility, innovation and marketing (Baker, 1980).

Environmental conservation

There are certain organizations that consume tremendous natural resources but take back nothing in return but only to respond to massive pollution. This is dangerous and is unethical. By polluting the environment these organizations are threatening their future survival since resources will have been depleted. So this is one of the strongest arguments requiring corporate organizations to control their harmful effects on the environment (Davis & Blomstrom, 1975).

Citizenship Good

Taking responsibility by adhering to local as well as national regulations and laws is a sign of good citizenship. Governments and regulatory authorities are ever kin on businesses that are law-abiding and are ready to enter into meaningful businesses with them. This means that organizations can get licenses for whatever business operations that they would want to carry out (Carroll, 1998).

Cases against corporate social responsibility

Tough arguments have also been put forward to contradict the support for corporate social responsibility.

Some people tend to disagree and say that corporate responsibility should be the work of the government. The government of the day is better equipped to control all the activities in a state and therefore it will be ironic for businesses to play the role of a government (Baker, 1980).

Organizations also argue that taking additional responsibility other than profitability is viewed in the wider perspective as violating shareholder’s wealth maximization objective and may lead to a conflict in an organization (Baker, 1980).

List of references

  1. Baker, M 1980, “Arguments against Corporate Social Responsibility“. Business Respect.
  2. Carroll, A. 1998, “The Four Faces of Corporate Citizenship”. Business and Society Review. vol. 100, no. 1, pp. 1-7
  3. Cavett-Goodwin, D 2007, “Making the Case for Corporate Social Responsibility”. Cultural Shifts.
  4. Davis, K & Blomstrom, R 1975, Business and Society: Environment and Responsibility, New York: McGraw-Hill. ISBN 0070155240.
Find out your order's cost