Corporate Social Responsibility Benefits of Stakeholders

Question: Discuss about the Corporate Social Responsibility for Benefits of Stakeholders. Answer: Introduction Corporate Social Responsibility (CSR) refers to the approach that a particular business contributes for a sustainable enhancement by providing social, economic and environmental benefits to the stakeholders. In CSR activities, the company concentrates to control the level of damage caused to the environment in terms of pollution and other social issues. The paper intends to conduct an in-depth analysis on the CSR activities with the help of relevant scholarly articles to obtain knowledge about different trends of CSR and its impact on the ecological environment as well as the community (Fontaine, 2013). Scope The completion of the paper will enhance the understanding on the importance of CSR activities and current trends based on which further studies on business environment can also be conducted. The importance to include the ethical consideration by an organization towards the stakeholders engaged with the business have been elaborated in the paper, which will provide a clear understanding on the factors that also help the organizations in gaining competitive advantages as well. Basis of Selection The scholarly articles have been selected on the basis of the information included regarding current trends of CSR activities and the outcome or derived conclusion through which the paper can further evaluate the significance of the CSR accordingly. The paper focuses on the current trends of the CSR activities for which the paper included the articles that are published within2008-2016 to review the identified area. Literature Review Approaches to CSR and Definitions According to the view presented by Fontaine (2013), the organizations can be regarded as socially responsible, when they fund a project for the development of the social system. This particular activity is termed as CSR, wherein the organization concentrates to return a specific amount of profit gained with the support of the stakeholders in their development purpose. The various factors that affects CSR are development in technology, breaches in ethics, globalization, new legislations made by governmental entities and consumers demand regarding ethics among others. In this regard, Matten Moon (2008) affirmed that CSR varies on the basis of regions and its policies, as it defined as the motto of business to conduct charitable activities. However, Aldama, Amar Trostianki (2009) supported the view by stating that the organizations must concentrate and prioritized the CSR activities for gaining higher level of competitive advantages in the respective domain. In addition to this, it is also stated the manner of performing the responsibilities towards the community are also changing in the present context based on the market preferences and requirements. In this context, Aldama et al, (2009) further added that after establishing CSR policies, the companies hardly concentrate on initiating measures for risk management. The CSR manager needs to communicate with all the departments to determine integrated CSR policy, which can provide more effective outcome on the community development. Concerning the present market, Strand (2009) stated that comparatively large companies include an individual department for CSR activities, which will purely concentrate on enhancing the outcome of CSR policies and reporting the higher autho rity in case of risks or uncertainties. In addition to this, Runhaar Lafferty (2008) further asserted that in recent decades, CSR activities are considered as a vital aspect for organizations across the globe. Organizations nowadays largely focus on these activities to maintain a good brand image in the market, which in turn help to gain high profitability in long run. Therefore, it is observed in the present context that the companies must concentrate to perform certain ethical duties towards the society and should try to reduce the negative impacts on the ecological environment due to the business operations. Strand (2009) included certain attempts that have been performed to boost the practices of CSR in the current domain with the support of legal methods, sharing of knowledge and information and by creating a benchmark o towards the environment and society. Montiel (2008) has further asserted that in the recent decades, organizations concentrate on gaining competitive advantages from the initial stage for which they include wide range of uniqueness or innovation to place itself in a higher position. This in turn, created a more complicated market, wherein the CSR have created a sense of uncertainty for the management and a problem for proper identification of the techniques or approaches. Chand, Narwal Rani (2015) also suggested that in todays business domain there has been an emergence of sustainable business practices in which the concept of CSR is connected with ethical behavior of an organization towards a society. Apart from this, the perspective presented by Smith (2011) suggests that CSR can be considered as a system that helps in channelizing the wealth of an organization with the benefit of the stakeholders, which clearly indicates the significance to balance between the practices of ethics and sustainable management. Current Discoveries Enhancement of social responsibility practices helps the organizations in promoting the brand image and increases the consumers propensity of consumption regarding that brand. In this regard, the brand Wal-Mart can be highlighted, which has become a subject of criticism due to increasing negative effect on the environment for its business operations. At the present scenario, organizations also communicate regarding their social responsibilities and performed activities to the customers through several marketing programs as it creates a positive brand image and enhance the sales, growth and profitability (Ganesan, George, Jap, Palmatier Weitz, 2009). Sterling (2012), mentioned that the CSR is based on an international view, social connection logic and a sense of shared responsibility through which it focuses on the needs of development in the working environment. From the current business domain, Frynas (2014) suggested that the organizations nowadays have taken initiatives on reducing the poverty and health related issues at the international level through CSR activities. This will increase the role of private companies in promoting the success of international welfare programs such as the United Nations (UN) Millennium Development Goals (MDG). UN in 2005 had pledged to all the corporate houses to contribute 0.7% of their profit before tax in helping the victims of HIV/ AIDS in Africa. In this regard, Kraus Brtitzelmaier (2012) affirmed that various stakeholders present in the external and internal environment of a business should be treated in an ethical manner by the society. From this perspective, it can therefore be asserted that the CSR activities aim to increase the living standard of people along with enhancement of the overall profit. Kolk (2010) stated that though the concept of CSR originated previously, the actual implementation or utilization of the concept is evident in the current domain to gain competitive advantages in the international market. Netaji Amran (2009) further added that globalization has emerged the need of making changes in the CSR activities and adopting the concept more effectively by increasing their responsibility towards the society and the environment. Recently, the European Union has decided to elaborate the CSR by stating that the way in which organizations contribute in the development of the society and the environment is defined as CSR. Zollo, Minoja, Casanova, Hockerts, Neergard, Schneider Tencati (2009) stated that the managers currently are focusing to incorporate CSR, but they hardly gain the expected outcome on these efforts. Apart from all these factors, Mahlouji Anaraki (2009) also added that the present theories of CSR are inefficient in promoting innovations for entrepreneurs. This has prioritized to include a balance between CSR and social responsible innovation (SRI). There has been an argument that organizations, that still not consider innovations or adopt approaches to enhance their CSR activities, are supposed to experience failure in future. With the advancement of technologies, innovations have become the most crucial aspect that increased several ways in the field of social responsibilities, so that the CSR can be executed in more efficient manner. Frynas (2008) argued the fact by affirming that though CSR is claimed to make contributions at the international level, there are certain drawbacks such as lack of empirical evidence of the concept, which can reduce its effectiveness while implementing the same. The previously conducted studies on the benefits of CSR are based on certain case studies, which might reduce the effectiveness of the study outcome as it should focus on a macro-level by considering the pros and cons of CSR. Markey (2016) argued that CSR include certain limitations, as it leads to neglect the efficient corporate governance that already exists in the company policies. The organizations already have ethical and legal consideration into practice, but the philosophy of CSR neglects these factors and propounds to create new ethical code of conduct as well. Principal Questions Asked Based on the understanding obtained from the above section, several factors still need to elaborate on the basis of the current domain. In the recent decades, the domain has drastically been changed and continues to shift in terms of CSR approaches. In this regard, the main questions raised on the need of CSR are the factors that influence the companies to follow CSR activities along with its benefits, derived by undertaking CSR activities. In addition to this, it is also in doubt whether companies have successfully incorporated the CSR activities in achieving a sustainable position in the market. Several studies have been concentrated on the approaches of CSR activities and the changes evident in the setting, but there still lack evidences on the priorities of the organization in current market on the basis of the initiatives of the entire market. Apart from this, analysis on the limitations of CSR is considered to be another major area to concentrate. Conclusion Drawn The organizations must performed in an ethical manner to gain competitive advantages as well as concentrate on the society in which they ensure comparatively lesser negative impact on the environment due to their business operations. Customers nowadays mostly prefer the brands that are associated with effective CSR activities. Thus, CSR is an essential medium to create a positive brand image that further helps in increasing the profitability and enhancing growth. Huge numbers of scholars have focused on the need to bring integration between the SRI and CSR. However, the concept of CSR still lacks empirical evidence for both success of the companies and impact of CSR in this success (Markley, 2016). Application to Organization CSR is applicable to all kind of organizations including the SMEs. Nowadays, organizations have included an individual department for CSR to monitor the activities and work on the responsibilities and environmental concerns. Through these activities, the organizations can increase the profit and growth properly. Conclusion Agreements and Disagreements CSR is defined as the social performance, corporate citizenship and corporate conscience that performed by the organizations in enhancing own brand image amid the stakeholders and developing steady growth. The application of CRM strategies varies on the basis of different regions, ethical considerations and governance. There are certain studies that argued that effective CSR activities can be incorporated by creating a benchmark. Based on the current market requirements, the society now expects more benefits or innovation for the community development, which in turn converted the CSR in a matter of brand image in the market. Contextually, CSR helps in increasing the profit and growth, as consumers prefers renowned brands for their social duties. In this regard it is observed that the objective of CSR is not only concerned with the betterment of the society, but also with the development of working environment. The social responsibilities approach is one such aspect that helps to solve the issues of water scarcity, obesity, shortage of resources and violation of human rights, wherein in the present context, focus is provided on bringing an integration between CSR and SRI. On the other hand, certain scholars however, have criticized the CSR due to certain factors, as there are no empirical evidences to prove that CSR directly provide benefits to the organizations and the society both at the same time. Summary of Conclusion CSR seems to be inevitable for the organizations that majorly concentrate on fulfilling the responsibilities for the society and the environment. CSR activities are beneficial for both organizations and community through which organizations return a part of profit for the development of stakeholders. Summary of Applicability of CSR to Organization In the present context, CSR is now applicable to all organizations despite their size or target arena based on which it intends to perform in an ethical manner for the betterment of society. References Aldama, P, L, R, Amar, A P Trostianki, W. D 2009, Embedding corporate responsibility through effective organizational structures, Corporate Governance: The International Journal of Business in Society,vol. 9, no. 4, pp. 506-516. Chand, S, Narwal, K Rani, S 2015, The relationship between corporate social responsibility and sustainable development, International Research Journal of Commerce and Law, vol. 2, no.1. pp. 18-28. 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