CSR

Corporate Social Responsibility

Corporate Social Responsibility

Introduction

“Social responsibility [is the] responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated through out the organization.”Working definition, ISO 26000 Working Group on Social Responsibility (McGraw Hill, n.d., pp. 14-42).

The purpose of writing the paper is to give the readers an idea about the importance of CSR in the organizational culture. Maria is the CEO of the ClothesOline Corporation (COL) and she asked her business ethics consultant to advice her on a point that she wanted to know the potential benefits it the organization adopt the corporate social responsibility policy. As the per the organizational review mentioned the management did not paying good wages to the workers. However, Maria is being confused between benefits and disadvantages for adopting the CSR policy. Therefore, the following paper highlights the importance, effectiveness, benefits and probably the potential disadvantages of adopting the CSR policy.

Discussion

Evolving Concept

Corporate social responsibility (CSR) is an evolving concept that does not currently have a universally accepted definition. It frequently overlaps with similar terms, such as corporate sustainability, corporate sustainable development, and corporate citizenship. Whether or not or to what extent businesses must implement CSR has been a heated topic of discussion through the years, but was particularly vociferous during the debate about conducting business in South Africa during the apartheid era. At the time, many corporate executives maintained that their responsibility extended only to their shareholders.

Milton Friedman argued their case in his 1970 New York Times Magazine article, “The Social Responsibility of Business Is to Increase Its Profits.” In Friedman's Libertarian point of view, a business, since it was not a person, had no responsibility other than to fulfil the purpose for which it was created, that is, to maximize the return on shareholder investment. He said that executives and employees owed allegiance to the firms for which they worked and must keep the profit-maximization goal firmly in mind. He equated efforts to improve society through the conduct of business with “pure and unadulterated socialism.”

Although there are still those who hold Friedman's view, most business executives, including many who self-identify as Libertarians, now acknowledge that companies do indeed have a social responsibility (May, et. al., 2007, pp. 121-29).

CSR as a Business Strategy

Taken at face value, when a company establishes a CSR policy, it is simply making a social contract with its stakeholders, however they are defined. Typically, a CSR policy will restate the company's commitment to abide by accepted corporate governance practices, ethical standards, and the laws governing the places where it operates. It may include statements on community involvement, and investment and intentions regarding corporate philanthropy and employee volunteering. It may also establish the accountability, transparency, and reporting standards to which it will ...