Corporate Social Responsibility
Corporate Social Responsibility: CSR is a self-regulatory business model that allows a firm to be socially responsible to itself, its stakeholders, and the general public. Companies may be aware of their influence on all parts of society, including economic, social, and environmental, by exercising corporate social responsibility, also known as corporate citizenship.
Corporate Social Responsibility refers to a company’s decision to operate in ways that benefit society and the environment rather than harming them in the usual course of business.
Corporate social responsibility is a wide notion that varies based on the firm and sector. Businesses may improve society while enhancing their brands via CSR initiatives, charity, and volunteer actions.
Corporate Social Responsibility is vital for the community, but it is also crucial for businesses. Workers and organisations may form a stronger link via CSR initiatives, which can enhance morale and make both employees and employers feel more connected to the world around them.
To be socially responsible, a firm must first be accountable to itself and its shareholders. Companies that implement CSR programmes often have developed to the point where they can give back to society. As a result, CSR is essentially a corporate strategy. Furthermore, the more prominent and successful a company is, the greater its duty to establish ethical standards for its peers, competitors, and industry.
Corporate Social Responsibility as an Example
Starbucks was recognised for its acute sense of corporate social responsibility and dedication to sustainability and community welfare even before its first public offering (IPO) in 1992. Starbucks, according to the corporation, has met many of its CSR goals since it first opened its doors. “Reaching 99 percent of ethically sourced coffee, creating a global network of farmers, pioneering green building throughout its stores, contributing millions of hours of community service, and creating a groundbreaking college programme for its partner/employees,” according to the company’s 2018 “Global Social Impact Report.”
Starbucks plans to hire 10,000 refugees in 75 countries by 2020, reduce the environmental effect of its cups, and engage its workers in environmental leadership. Today, many socially responsible firms, such as Ben & Jerry’s ice cream and Everlane, a clothing shop, have brands that are renowned for their CSR initiatives.
Corporate Social Responsibility Importance
The assumption that fulfilling corporate social responsibility entails expenses and, as a result, lower profitability has been disproven beyond a shadow of a doubt. Rather, it has long been recognised that exercising social responsibility enhances a company’s basis, allowing it to benefit not just in the near term but also in the long term. In the business sector, there are a plethora of similar tales.
Johnson & Johnson is a famous example of a firm putting the public good ahead of its own profit motive, particularly when the company is a victim. On September 28, 1982, Johnson & Johnson’s Extra Strength Tylenol caused cyanide poisoning and the deaths of numerous individuals in Chicago.
Johnson & Johnson, demonstrating its deep care for social welfare, not only helped with the investigation into the occurrence, but also issued a $ 1,000,000 prize for information regarding the perpetrator.
The Tylenol problem cost Johnson & Johnson a whopping $ 50 million in addition to the recall of 31 million bottles with a retail value of more than $ 100 million. The most damaging impact might be the loss of public trust. Six weeks after removing all Tylenol capsules off the market, the business returned the medicine in tamper-proof containers, which are now standard in all pharmaceutical items.
Johnson & Johnson somehow restored 95% of the market share it had before to the Tylenol crisis (Waldholz 1982). This storey from Johnson & Johnson shows how social concern builds an organization’s basis, or “Organizational Character,” and, as a result, its profit-earning ability. Character is the cornerstone for all success.
Maruti Udyog Limited (MUL) is another example of a company that prioritised social welfare before profit. This respectable firm returned roughly 50,000 of its most popular product, the Maruti 800 passenger vehicles, off the market in 1997, out of all the cars sold between January and April, because they suspected them of being manufactured of substandard steel. This made the front pages of newspapers since it was the largest-ever recall of autos from the Indian market. What an exemplary case of moral charity (Singh 2003)!
The explanation for this positive association seems to be that a company’s social participation delivers a variety of advantages that outweigh its expenses. Positive customer perceptions, a more focused and motivated staff, high public confidence, societal acceptability, and even less regulatory intrusion would be among the advantages.
Our ancient principle of Propkaram Paramam Dharma, i.e., helping others, or what sociologists term altruism, as the most holy duty, is one approach to comprehend the importance of corporate social responsibility. “Dharma” means “obligation,” and “Dharma” means “truth.”
Truth triumphs in all of its expressions and endures for a long time. Our history shows that, in the end, satyamev jayate, or truth alone, triumphs and wins in all spheres of life. Cooperate social responsibility is a company’s ‘dharma,’ which allows it to develop and endure for a long time.
An falsehood or unethical business is just as short-lived as any other untruth. There are several corporate instances, such as Arthur Anderson, Enron, Union Carbide, Harshad Mehta Stock Corporation, and others, that demonstrate that no business can continue and thrive without the consent and approval of the community in which it operates. Without societal approval, company will inevitably fail and die.
Here are some additional reasons why firms should take on social responsibility. Many of them (Mintzerg 1983) are couched in terms of enlightened self-interest, in which the company assumes societal duties in order to advance its own self-interest.
Consumers may reward companies that are believed to be socially responsible with more and/or happier customers, whilst customers may reject or boycott companies that are thought to be irresponsible. In India, Pepsi and Coca-Cola faced a boycott by consumers in 2007.
Employees are drawn to and even more dedicated to companies that are socially responsible, according to research (Greening and Turban 2000).
Corporations that voluntarily commit to social acts and programmes may be able to avoid regulation and gain more autonomy from the government.
Making a constructive contribution to society via socially responsible behaviour might be seen as a long-term investment in improving and stabilising the business environment.
In addition to the aforementioned commercial grounds for corporate social responsibility, the following are additional key moral justifications for CSR:
Corporations produce societal issues such as pollution and filthiness as a result of their activities, and they have a moral obligation to fix these problems as well as make attempts to avoid such problems in the future.
Corporations, as social actors, make use of limited social resources. As a result, they must utilise these resources responsibly for the sake of society.
Corporate operations of many kinds, including as supplying goods and services, employing employees, and so on, have societal consequences that might be beneficial, bad, or neutral. As a result, firms must take responsibility for these consequences.
In actuality, companies depend on contributions from a broad range of constituencies, or stakeholders in society, including customers, suppliers, local communities, and so on. As a result, organisations have a responsibility to consider the interests and aims of shareholders and other stakeholders.
Given the variety of arguments in favour of Corporate Social Responsibility
, there is no dispute about the importance of and necessity for firms to engage in socially responsible behaviour.