Corporate social responsibility ( CSR , also called company sustainability, sustainable business, corporate conscience , corporate citizenship or < b> responsible business ) is a type of private private international business arrangement. While it was once possible to describe CSR as a policy of internal organization or business strategy, that time has passed since various international laws have been developed and organizations have used their authority to push it beyond individual or even industry initiatives. Although it has been regarded as a form of corporate self-organization for some time, over the last decade it has moved fairly from voluntary decisions at the level of individual organizations, to compulsory schemes at regional, national and even transnational levels.
Considered at the organizational level, CSR is an organization policy. Thus, it should be aligned with and integrated into the business model to be successful. With some models, corporate CSR implementation goes beyond compliance with regulatory requirements, and engages in "emerging actions for further some of the social good, beyond the company's interests and what the law requires". The choice of 'obeying' the law, failing to obey, and 'transcending' are three different strategic organizational choices. While in many areas such as environmental or labor regulations, employers may choose to abide by the law, or go beyond the law, other organizations may choose to violate the law. These organizations take clear legal risks. However, the nature of legal risk changes when attention is paid to soft law. Soft law can create legal liability especially when businesses make misleading claims about their sustainability or other ethical credentials and practices. Overall, businesses can engage in CSR for strategic or ethical purposes. From a strategic perspective, the goal is to increase long-term profit and shareholder confidence through positive public relations and high ethical standards to reduce business and legal risks by taking responsibility for corporate actions. CSR strategy encourages companies to make a positive impact on the environment and stakeholders including consumers, employees, investors, the public, and others. From an ethical perspective, some businesses will adopt CSR policies and practices because of the ethical beliefs of senior management. For example, a CEO may believe that damaging the environment is ethically unacceptable.
Proponents argue that companies increase long-term profitability by operating with CSR perspectives, while critics argue that CSR diverts attention from the role of business economics. A 2000 study comparing the existing econometric studies of the relationship between social and financial performance, concluded that conflicting results from previous studies that reported positive, negative, and neutral financial impacts were due to empirical analysis that was flawed and claimed when the study was determined by appropriately, CSR has a neutral impact on financial results. Critics question "sublime" and sometimes "unrealistic expectations" in CSR. or that CSR is merely a window coating, or an attempt to prevent the government's role as a watchdog against a strong multinational corporation. In line with this critical perspective, the political and sociological institutions are attracted to CSR in the context of the theory of globalization, neoliberalism and final capitalism. Some institutionalists view CSR as a form of capitalist legitimacy and specifically show that what began as a social movement against corporate power unhindered was transformed by companies into 'business models' and 'risk management' tools, often with questionable results.
CSR is titled to assist the mission of the organization and serves as a guide to what represents the company for its customers. Business ethics is a part of applied ethics that examines ethical principles and moral or ethical issues that can arise in a business environment. ISO 26000 is an internationally recognized standard for CSR. Public sector organizations (UN for example) comply with triple bottom line (TBL). It is widely believed that CSR complies with similar principles, but without formal laws.
Video Corporate social responsibility
Definitions
Since the 1960s, corporate social responsibility has attracted the attention of various businesses and stakeholders. Various definitions have been developed but with little consensus. Part of the problem with the definition has arisen because different interests are represented. A businessperson can define CSR as a business strategy, NGO activists can see it as 'greenwash' while a government official can see it as a voluntary regulation. "In addition, disagreements about definitions will emerge from a disciplined approach." For example, while an economist might consider the required director's policy for CSR to apply the agency cost risk, legal academics may consider that the discretion to be a precise expression of what the law requires of the directors.
Corporate social responsibility was recently defined by Sheehy as "the private arrangement of an international private business." Sheehy examines different disciplinary approaches to define CSR. The definition under review includes the definition of economics "sacrificing profit," the definition of management "goes beyond compliance", the institutional view of CSR as a "socio-political movement" and its own legal focus on the duties of the director. Furthermore, Sheehy considers Carroll's widely used description of CSR as a pyramid of responsibility, namely economic, legal, ethical and philanthropic responsibility. Importantly, while Carroll does not define CSR but merely argues for classification of activities, Sheehy develops a different definition following the philosophy of science - the branch of philosophy used to define phenomena.
Carroll 1991 extends corporate social responsibility from traditional economic and legal responsibility to ethical and philanthropic responsibility in response to increased concerns about ethical issues in business. This view is reflected in the Business Dictionary which defines CSR as "Corporate responsibility for society and the environment (both ecological and social) in which it operates.The Company expresses this citizenship (1) through their waste reduction process and pollution, (2) by donating educational and social programs and (3) by obtaining adequate returns on the resources employed. "
Maps Corporate social responsibility
Consumer perspective
Most consumers agree that when it comes to business targets, companies must engage in CSR efforts at the same time. Most consumers believe companies doing charity work will receive a positive response. Somerville also found that consumers are loyal and willing to spend more for retailers who support charity. Consumers also believe that retailers selling local products will gain loyalty. Smith (2013) shares the belief that marketing local products will gain consumer confidence. However, environmental efforts accept a negative view given the belief that this will affect customer service. Oppewal et al. (2006) found that not all CSR activities appeal to consumers. They recommend retailers to focus on one activity. Becker-Olsen (2006) finds that if the social initiatives undertaken by the company are not aligned with the goals of other companies it will have a negative impact. Mohr et al. (2001) and Groza et al. (2011) also stressed the importance of reaching consumers.
Approach
Some commentators have identified differences between Canada (Montreal CSR school), Continental Europe and Anglo-Saxon approach to CSR. It is said that for Chinese consumers, socially responsible companies create safe and high quality products; for Germans to provide safe jobs; in South Africa it makes a positive contribution to social needs such as health care and education. And even in Europe, the discussion about CSR is very heterogeneous.
A more general approach to CSR is corporate philanthropy. This includes monetary donations and assistance provided to nonprofit organizations and communities. Donations are made in areas such as arts, education, housing, health, social welfare and the environment, among others, but excluding political contributions and commercial event sponsorships.
Another approach to CSR is to incorporate direct CSR strategies into operation. For example, the provision of tea and coffee Fair Trade.
Creating shared value or CSV is based on the idea that corporate success and social welfare are interdependent. A business needs a healthy and well-educated workforce, sustainable resources and an expert government to compete effectively. In order for people to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues and philanthropy. Harvard Business Review Review Strategy & amp; Society: The Relationship between Competitive Advantage and Corporate Social Responsibility provides an example of a company that has developed an in-depth relationship between their business strategy and CSR. CSV recognizes the trade-off between short-term profitability and social or environmental objectives, but emphasizes the opportunity for a competitive advantage from building social value propositions into corporate strategy. CSV gives the impression that only two important stakeholders - shareholders and consumers.
Many companies use benchmarking to assess the policies, implementation, and effectiveness of their CSR. Benchmarking involves reviewing competitors 'initiatives, as well as measuring and evaluating the impact of those policies on society and the environment, and how others understand competitors' CSR strategies.
Cost-benefit analysis
In a competitive market a cost-benefit analysis of CSR initiatives can be examined using a resource-based view (RBV). According to Barney (1990), "RBV formulation, a sustainable competitive advantage requires that valuable resources (V), rare (R), can not be replicated (I) and can not be replaced (S)." Companies that introduce CSR-based strategies may only retain a high return on their investment if their CSR-based strategies can not be copied (I). However, if competitors imitate such a strategy, it may increase overall social benefits. Companies that choose CSR for strategic financial gain also act responsibly.
RBV assumes that the company is a collection of heterogeneous resources and imperfect ability to move around the enterprise. This imperfect mobility can lead to a competitive advantage for firms that acquire immovable resources. McWilliams and Siegel (2001) examined the activity and attributes of CSR as a differentiation strategy. They conclude that managers can determine the appropriate level of investment in CSR by conducting cost benefit analysis in the same way that they analyze other investments.
Reinhardt (1998) found that companies involved in CSR-based strategies can only maintain abnormal returns if they prevent a competitor from imitating his strategy.
Coverage
Initially, CSR emphasized the official behavior of each company. Then, it is expanded to include supplier behavior and use of which products are included and how the product is discarded after losing its value.
Supply chain
In the 21st century, corporate social responsibility in the supply chain has attracted the attention of businesses and stakeholders. A company's supply chain is a process whereby multiple organizations including suppliers, customers and logistics providers work together to deliver value packs of products and services to end users, who are customers.
Corporate social responsibility in the supply chain has greatly affected the company's reputation, which causes a lot of costs to resolve the problem. For example, incidents such as the collapse of the Savar Building 2013, which killed more than 1000 people, encourage companies to consider the impact of their operations on society and the environment. On the other hand, the horseshoe scandal of 2013 in the UK affects many food retailers, including Tesco, the UK's largest retailer, leading to supplier dismissals. Corporate social responsibility from both suppliers and retailers has greatly affected stakeholders who lost confidence in the affected business entity, and despite the fact that sometimes it is not directly done by the company, they become accountable to the stakeholders. The issues surrounding it have pushed supply chain management to consider the context of corporate social responsibility. Wieland and Handfield (2013) suggest that companies need to incorporate social responsibility in their review of component quality. They highlight the use of technology in enhancing visibility across the supply chain.
Corporate social responsibility includes six types of corporate social initiatives:
- Corporate philanthropy: corporate donations to charities, including cash, goods and services, sometimes through corporate foundations
- Community volunteering activities: volunteer activities organized by the company, sometimes when a worker is paid a pro-bono job on behalf of a non-profit organization
- Socially responsible business practices: ethically produced products that appeal to customer segments
- Cause promotions: corporate-funded advocacy campaign
- Related marketing for: donation to charity based on product sale
- Corporate social marketing: corporate-funded change behavior campaign
The six initiatives of the company are a form of corporate citizenship. However, only a few of CSR's activities go up to the marketing level, which is defined as "the type of corporate social responsibility (CSR) in which the company's promotional campaigns have a dual purpose of increasing profitability while improving society."
Companies generally do not have a profit motive when participating in corporate philanthropy and community volunteers. On the other hand, the remaining corporate social initiatives can serve as examples of marketing causes, where there is a social interest and profit motive.
Implementation
CSR can be based on human resources, business development or the public relations department of an organization, or may be a separate unit reporting to the CEO or the board of directors.
Engagement pack
Engagement plans can help you reach the desired audience. An individual or corporate social responsibility team plans the goals and objectives of the organization. As with any corporate activity, a defined budget demonstrates the commitment and relative importance of the program.
Accounting, auditing and reporting
Social accounting is the communication of social and environmental effects of a firm's economic actions to a particular interest group in society and society at large.
Social accounting emphasizes the idea of ​​corporate accountability. Crowther defines social accounting as "an approach to reporting corporate activities that emphasize the need for identification of socially relevant behavior, the determination of the people to whom the company is responsible for its social performance and the development of appropriate measures and reporting techniques." Reporting guidelines and standards serves as a framework for social accounting, auditing and reporting:
- AA1000 AccountAbility Standard, based on John Elkington's three bottom line report (3BL)
- Connection Reporting Templates Project Prince of Sustainability Prince
- The Fair Labor Association conducts audits based on the Workplace Code of Ethics and posts the audit results on the FLA website.
- The Fair Wear Foundation verifies labor conditions in the enterprise supply chain, using an interdisciplinary audit team.
- The Global Reporting Sustainability Reporting Guide
- Economics for Good General Good Public Balance
- The GoodCorporation standard was developed in conjunction with the Business Ethics Institute Synergy Codethic 26000 Social Responsibility and Sustainability Commitment Management System (SRSCMS) Requirements - Best Practices Ethical Business Organizations - the elements of the management system needed to obtain a quality ethics commitment management system. The standard scheme has been built around ISO 26000 and the UNCTAD Guide on Good Practices in Corporate Governance. This standard can be applied by all types of organizations;
- Earthcheck Certification/Standard
- Social Accountability Standard SA8000 International
- AEI Standard Ethics Guide
- ISO 14000 environmental management standard
- The United Nations Global Compact requires companies to communicate about their progress (or to produce Communications of Progress, COP), and to describe the application of the company's ten universal principles.
- The United Nations Intergovernmental Working Group on International Accounting Standards and Reporting (ISAR) provides voluntary technical guidance on eco-efficiency indicators, reporting corporate responsibility, and corporate governance disclosures.
- The FTSE Group publishes the FTSE4Good Index, a company's CSR performance evaluation.
- EthicalQuote (CEQ) tracks the world's largest corporate reputation in the Environment, Social, Governance (ESG), Corporate Social Responsibility, ethics and sustainability.
- The Islamic Reporting Initiative (IRI) is a non-profit organization that leads the creation of the IRI framework; an integrated CSR reporting framework that guides based on Islamic principles and values.
In countries such as France, legal requirements for social accounting, auditing and reporting exist, although international or national agreements on measurement meaning social and environmental performance have not been achieved. Many companies produce externally audited annual reports covering issues of Sustainable Development and CSR ("Triple Bottom Line Reports"), but the reports vary widely in evaluation formats, styles and methodologies (even within the same industry). Critics view this report as lip service, citing examples such as Enron's annual "Corporate Responsibility Report" and tobacco company social reporting.
In South Africa, as of June 2010, all companies listed on the Johannesburg Stock Exchange (JSE) are required to make an integrated report in lieu of annual financial statements and sustainability reports. The integrated report examines environmental, social and economic performance alongside financial performance. This requirement is implemented without formal or legal standards. The Integrated Reporting Committee (IRC) was established to publish good practice guidelines.
One of the foremost agencies that the capital market switched to a credible sustainability report is the Carbon Disclosure Project, or CDP.
Verify
Corporate social responsibility and the resulting reports and efforts must be verified by consumers of goods and services. Accounting, auditing and reporting resources provide a platform for consumers to verify that their products are socially sustainable. Due to the growing awareness of the need for CSR, many industries have their own verification resources. Including organizations such as Forest Stewardship Council (paper and forest products), International Cocoa Initiative, and Kimberly Process (diamond). The United Nations also provides a framework not only for verification, but for reporting human rights abuses in the enterprise supply chain.
Ethics Training
The emergence of ethical training within the company, some of which are required by government regulations, have helped CSR to spread. The purpose of the training is to help employees make ethical decisions when the answer is unclear. The most direct benefits are reducing the possibility of "dirty hands", fines, and reputation damaged by violating laws or moral norms. Organizations see increased employee loyalty and pride in the organization.
General actions
Common CSR actions include:
- Environmental sustainability: recycling, waste management, water management, renewable energy, reusable materials, 'environmentally friendly' supply chains, reducing paper use and adopting Leadership design standards in Energy and Environmental Design (LEED).
- Community involvement: This can include raising money for local charities, providing volunteers, sponsoring local events, hiring local workers, supporting local economic growth, engaging in fair trade practices, etc.
- Ethical marketing: Companies that ethically market to consumers place a higher value on their customers and respect them as people who end up in themselves. They do not try to manipulate or falsify advertising to potential customers. This is important for companies that want to be viewed ethically.
Social license
"Social license" refers to the acceptance or approval of the local community of a company. The social license is outside the formal arrangement process. Social license can be obtained through timely and effective communication, meaningful dialogue and ethical and responsible behavior.
Showing commitment to CSR is one way to achieve social license, by enhancing the company's reputation.
Potential business benefits
A large amount of literature urges businesses to adopt measures of non-financial success (eg, Fourteen Deming Points, balanced scorecard). Although the benefits of CSR are difficult to measure, Orlitzky, Schmidt and Rynes find correlations between social/environmental performance and financial performance.
The business case for CSR within a company uses one or more of these arguments:
Triple bottom line
"People, planets, and profits", also known as the triple bottom line, form a way to evaluate CSR. "People" refers to fair labor practices, communities and areas where business operates. "Planet" refers to sustainable environmental practices. Profit is the economic value created by the organization after deducting the cost of all inputs, including capital costs (unlike the definition of profit accounting).
The move is claimed to help some companies be more aware of their social and moral responsibilities. However, critics claim that it is selective and replaces the corporate perspective for the community. Another criticism is about the absence of standard audit procedures.
This term was created by John Elkington in 1994.
Human resources
CSR programs can be an aid to recruitment and retention, especially in a competitive graduate student market. Prospective recruiters often consider company CSR policies. CSR can also help improve the perception of the company among its staff, especially when staff can be involved through payroll, community fundraising or voluntary activities. CSR has been credited with encouraging customer orientation among employees who are dealing with customers.
CSR is known to affect employee turnover. Some executives claim that employees are their most valuable asset and the ability to defend them leads to organizational success. Socially responsible activities promote justice, which in turn results in lower employee turnover. On the other hand, if irresponsible behavior is demonstrated by the company, employees may see this behavior as negative. Proponents argue that treating employees well with competitive wages and good benefits is seen as socially responsible behavior and therefore reduces employee turnover. Executives have a strong desire to build a positive work context that benefits CSR and the company as a whole. This interest is driven primarily by the realization that a positive work environment can produce desirable outcomes such as better job attitudes and improved work performance.
The IBM Institute for Business Value conducted a survey of 250 business leaders worldwide in 2008. The survey found that businesses have assimilated a much more strategic outlook, and that 68% of companies report utilizing CSR as an opportunity and part of a sustainable growth strategy. The authors note that while developing and implementing CSR strategies is a unique opportunity to benefit the company. However, only 31% of the businesses surveyed involved their employees on corporate CSR goals and initiatives. The survey authors also stated that employee engagement on CSR initiatives can be a powerful recruitment and retention tool. As a result, employees tend to throw away entrepreneurs with a bad reputation.
Risk management
Managing risk is an important executive responsibility. Reputations that take decades to build can be damaged within hours through corruption scandals or environmental accidents. It attracts unwanted attention from regulators, courts, government and the media. CSR can limit this risk.
Brand differentiation
CSR can help build customer loyalty based on typical ethical values. Some companies use their commitment to CSR as their primary positioning tool, for example, the Cooperative Group, The Body Shop, and American Apparel.
Some companies use CSR methodology as a strategic tactic to gain public support for their presence in global markets, helping them maintain a competitive advantage by using their social contribution as another form of advertising.
Companies that operate strong CSR activities tend to encourage the attention of customers to buy products or services regardless of price. As a result, this increases competition among companies because customers are aware of CSR practices. This initiative serves as a potential differentiator as they not only add value to the company, but also to the product or service. Furthermore, companies under intense competition can leverage CSR to increase the impact of their distribution on corporate performance. For example, lowering the carbon footprint of a company's distribution network or engaging in fair trade is a potential differentiator to lower costs and increase profits. In this scenario, customers can observe the firm's commitment to CSR while increasing the company's sales.
The marketing and promotion of organic food by Whole Foods positively impacts the supermarket industry. Proponents claim that Whole Foods has been able to work with its suppliers to improve the animal care and meat quality offered in their stores. They also promote local agriculture at more than 2,400 independent farms to maintain their sustainable organic product line. As a result, Whole Foods high prices do not make customers go shopping. In fact, they love to buy organic products derived from sustainable practices.
According to the Harvard Business Review article, there are three theater practices where CSR can be shared. Theater one focuses on philanthropy, which includes donations of money or equipment for nonprofit organizations, engagement with community initiatives and volunteer employees. It is characterized as the "soul" of a company, expressing the social and environmental priorities of the founders. The authors assert that companies are involved in CSR because they are an integral part of society. For example, Coca-Cola Company contributes $ 88.1 million annually to various environmental education and humanitarian organizations. Another example is PNC Financial Services's "Grow Up Great" childhood education program. This program provides an important school readiness resource for underserved communities where PNC operates.
On the other hand, the two theater focuses on improving operational effectiveness in the workplace. The researchers affirm that the program in this theater seeks to provide social or environmental benefits to support the company's operations across the value chain by increasing efficiency. Some of the examples mentioned include sustainability initiatives to reduce the use of resources, waste, and emissions that potentially reduce costs. It also requires investment in employee work conditions such as health care and education that can improve productivity and retention. Unlike philanthropic giving, which is evaluated by social and environmental restoration, initiatives in the second theater are predicted to increase corporate profits with social value. Bimbo, Mexico's largest bakery, is a great example of this theater. The company strives to meet the needs of social welfare. It offers free education services to help employees finish high school. Bimbo also provides additional medical care and financial assistance to close the gap in government health coverage.
In addition, the third theater program aims to change the business model. In essence, companies create new business forms to address social or environmental challenges that will lead to long-term financial returns. One example can be seen in Project Shakti Unilever in India. The authors illustrate that the company hired women in the village and gave them microfinance loans to sell soap, oil, detergents and other products door to door. This study shows that more than 65,000 women entrepreneurs multiply their income while increasing rural access and cleanliness in Indian villages. Another example is the IKEA People and Planet initiative to be 100% sustainable by 2020. As a result, the company wants to introduce new models to collect and recycle old furniture.
Reduce supervision
Corporations want to avoid disruptions in their business through taxation or regulation. CSR programs can persuade governments and society that companies take health and safety, diversity and the environment seriously, reducing the likelihood that company practices will be closely monitored.
Supplier relationship
Appropriate CSR programs can increase the attractiveness of suppliers to potential corporate customers. For example, fashion merchandisers can find value in overseas manufacturers using CSR to build a positive image - and to reduce the risk of bad publicity from unspecified mischief.
Criticism and worries
CSR's concern includes its relationship with business objectives and the motive to engage in them.
Nature of business
Milton Friedman and others argue that the company's goal is to maximize returns to its shareholders and to comply with the laws of jurisdiction in which it operates is socially responsible behavior.
While some CSR supporters claim that companies that practice CSR, especially in developing countries, are less likely to exploit workers and society, critics claim that CSR itself imposes outside values ​​on local communities with unpredictable results.
Better government regulation and enforcement, rather than voluntary action, is an alternative to CSR that drives decision-making and the allocation of resources from the public to private entities. However, critics claim that effective CSR should be voluntary as mandatory social responsibilities regulated by the government disrupt the plans and preferences of the people themselves, alter the allocation of resources, and increase the likelihood of irresponsible decisions.
Motives
Some critics believe that CSR programs are conducted by companies to divert public attention from the ethical questions posed by their core operations. They argue that the reputational benefits that CSR companies receive (quoted above as a benefit to corporations) show the hypocrisy of the approach. In addition, some studies have found that CSR programs are motivated by the personal interests of corporate managers at shareholder costs so they are a type of agency problem in the company.
Others argue that the main goal of CSR is to legitimize the power of business. When wealth inequality is perceived as increasing, it is necessary for companies to justify their position of power. Bakan is one of the most prominent criticisms of a conflict of interest between personal gain and public goods, and his argument is summarized by Haynes that "there is a calculus of firms where costs are driven to workers, consumers, and the environment." CSR expenditures can be seen in these financial terms, where higher costs of undesirable behavior are socially offset by lower CSR expenditures. Indeed, it has been argued that there is a "halo effect" in terms of CSR spending. Research has found that companies that have been convicted of bribery in the US under the Foreign Corrupt Practices Act (FCPA) receive fines more leniently if they appear to be actively involved in comprehensive CSR practices. It was found that usually a 20% increase in corporate grant or commitment to eradicate significant labor issues, such as child labor, equated to a 40% lower fine in the case of bribing foreign officials.
Aguinis and Glavas conduct a comprehensive review of CSR literature, which includes 700 academic sources from various fields including organizational behavior, corporate strategy, marketing and HRM. It was found that the main reason for companies to engage in CSR is the expected financial benefits associated with CSR, rather than motivated willingness to be accountable to society.
Ethical ideology
The CEO's political ideology is a manifestation of their different personal views. Each CEO can use different strengths according to the results of his organization. In fact, their political ideology is expected to affect their preferences for CSR outcomes. Proponents argue that liberal political CEOs will envisage CSR practices as beneficial and desirable to enhance the company's reputation. They tend to focus more on how companies can meet the needs of society. As a result, they will advance with CSR practices while adding value to the company. On the other hand, property rights may be more relevant to conservative CEOs. Because conservatives tend to value free markets, individualism and call for respect for authority, they will not imagine this practice as often as those who identify themselves as liberals.
Corporate finance and CSR practices also have a positive relationship. In addition, company performance tends to influence conservatives more likely than liberals. Though not seeing it from a financial performance point of view, liberals tend to have the view that CSR adds to the business line of the triple bottom line. For example, when companies perform well, they will most likely promote CSR. If companies do not perform as expected, they will be more likely to emphasize this practice because they will potentially envision it as a way to add value to the business. Conversely, politically conservative CEOs will tend to support CSR practices if they are of the view that they will give a good return to the company's finances. In other words, this type of executive is less likely to see CSR results as a value to the company if it does not provide anything in exchange.
Misdirection
There are unproven social efforts, ethical claims, and green washing by some companies that have resulted in cynicism and consumer distrust. Sometimes companies use CSR to distract the public from other dangerous business practices. For example, McDonald's Corporation positions its association with Ronald McDonald House and other children's charities as CSR while its food has been accused of promoting poor eating habits.
Stories that may initially appear as altruistic CSRs may have ulterior motives. The funding of a scientific research project has been used as a source of misdirection by the company. Prusiner, who invented the protein responsible for CJD and won the 1997 Nobel prize in Medicine, thanks to RJ Reynolds cigarette company for their crucial support. RJ Reynolds funded the research into CJD. Proctor states that "the tobacco industry is the principal funding of research into genetics, viruses, immunology, air pollution" whatever forms a diversion from established research linking smoking and cancer.
The study also found that corporate social marketing, a form of CSR that promotes the good of society, is used to direct criticism away from the destructive practices of the alcohol industry. It has been shown that ads that should encourage responsible drinking simultaneously aim to promote drinking as a social norm. Companies can engage in CSR and social marketing in this regard to prevent tighter government legislation on alcohol marketing.
Controversial industry
Industries such as tobacco companies, alcohol or ammunition create products that damage consumers or the environment. Such companies may be involved in the same philanthropic activities as in other industries. This duality complicates the valuation of these companies with respect to CSR.
Fetching Kizhakkambalam
The Kitex textile company has taken over the entire Indian village administration named Kizhakkambalam near Cochin by winning the election of a local body. Indian environmentalists and mainstream politicians point out that this can cause dangerous precedents because firms are actively involved in CSR only after they are caught in polluting the village.
Effect of stakeholders
One of the motivations for companies to adopt CSR is to satisfy the stakeholders.
Branco and Rodrigues (2007) describe the perspectives of stakeholders from CSR as a series of corporate responsibility views held by all groups or constituents that have relationships with the company. In their normative model, companies accept these views as long as they do not hinder the organization. Stakeholder perspectives fail to recognize the complexity of network interactions that can occur in cross-sectoral partnerships. It distinguishes communication with maintenance function, similar to exchange perspective.
Ethical consumerism
The rising popularity of ethical consumerism over the last two decades can be attributed to the emergence of CSR. Consumers become more aware of the environmental and social implications of their daily consumption decisions and in some cases make purchasing decisions related to their environmental and ethical issues.
One of the problems with customer relationships with CSR is that it's much more complex than it first appears. In a paper on consumers and CSR, Janssen and Vanhamme see the phenomenon they call "CSR-Consumer Paradox". [104] This explains the incompatibility that occurs where consumers report that they will only buy from companies with good social responsibility. For example, surveys by Cohn & amp; Wolfe found that globally over 60% of consumers want to buy from responsible companies. [105] However, Janssen and Vanhamme report that less than 4% of average UK household spending in 2010 is ethical. This shows that there is a clear distinction between consumer beliefs and intentions, and actual consumer behavior, so that when it comes to their actual purchasing behavior, CSR has a much lower impact than initially said by consumers.
One theory proposed to explain "CSR-Consumer Paradox" is "observer apathy" or observer effect. This theory is derived from the works of social psychology Darley and LatanÃÆ'Â Â Â [106] and states that the possibility of an individual acting in a particular situation is greatly reduced if the other observer does not do anything even if the individual is very believe in a particular action. In terms of explaining Paradox CSR-Consumers, this theory would suggest "If they do not care then why should I?" mentality. So even if a consumer opposes the use of a sweatshop or wants to support a green cause, they can continue to make purchases from socially irresponsible companies simply because other consumers seem apathetic to the issue.
The second explanation issued by Janssen and Vanhamme is that of reciprocal altruism. This is a key concept in evolutionary psychology that argues to fuel all human behavior: people only do something if they can get something in return. In the case of CSR and ethical consumerism, however, consumers earn very little in return for their investment. Products that are sourced or produced ethically are usually priced higher due to higher costs. However, the rewards for consumers are not much different from non-ethical partners. Therefore, evolutionary speech makes ethical purchases not worth the higher cost to individuals even if they believe in supporting ethically, environmentally and socially beneficial causes.
Socially responsible investment
Shareholders and investors, through socially responsible investments, use their capital to encourage behaviors they deem accountable. However, the definition of what constitutes ethical behavior varies. For example, some religious investors in the US have attracted investments from companies that violate their religious views, while secular investors break away from companies they perceive to impose religious views on workers or customers.
Public policy
Some national governments promote socially and environmentally responsible corporate practices. Increasing the role of government in CSR has facilitated the development of CSR programs and policies. European governments have encouraged companies to develop sustainable corporate practices. CSR observers like Robert Reich argue that governments should set the agenda for social responsibility with laws and regulations that illustrate how to do business responsibly.
Rule
Fifteen EU countries are actively involved in CSR regulations and public policy development. The efforts and policies of CSR differ in each country, responding to the complexity and diversity of the roles of government, corporations, and communities. Some studies suggest that the roles and effectiveness of these actors are specific by case. The diversity between the company's approach to CSR can complicate the regulatory process.
Canada adopted CSR in 2007. Prime Minister Harper encouraged Canadian mining companies to meet the newly developed CSR standards Canada.
The 'Heilbronn Declaration' is a voluntary agreement from companies and institutions in Germany especially from the Heilbronn-Franconia region signed on September 15, 2012. The 'Heilbronn Declaration' approach targets the determinants of success or failure, achievement of implementation and best practices related to CSR. A responsible form of entrepreneurship should be initiated to meet the trust requirements of stakeholders in the economy. This is an approach to making voluntary commitments more binding.
Contrary to the mandated CSR rules, Amstrong & amp; Green suggested that all regulations are "dangerous", citing regulations as contributing to the low economic freedom of North Korea and GDP per capita. They further claim without source that "No form of market failure, however horrible, is ultimately not exacerbated by political intervention intended to correct it," and concluded "there is no need for further research on regulation on behalf of social responsibility."
Legal
In the 1800s, the US government could take a company license if it acted irresponsibly. Corporations are seen as "state creatures" under the law. In 1819, the United States Supreme Court at Dartmouth College v. Woodward established a corporation as a legal entity in a certain context. This decision allows companies to be protected under the Constitution and prevents states from administering the company. The country recently incorporated CSR policies on the government agenda.
On December 16, 2008, the Danish parliament adopted a law mandating 1,100 Danish companies, investors, and the largest state-owned enterprises to include CSR information in their financial statements. The reporting requirements come into effect on January 1, 2009. The information required includes:
- CSR/SRI policy
- How the policy is implemented in practice
- Management results and expectations
CSR/SRI is voluntary in Denmark, but if a company does not have a policy on this matter, it must declare its position on CSR in the financial statements.
In 1995, the S50K item of the Income Tax Act of Mauritius mandated that registered companies in Mauritius pay 2% of their yearbook profit to contribute to the country's social and environmental development. In 2014, India also enacted a mandatory minimum CSR spending legislation. Under the Companies Act, 2013, any company with a net worth of 500 crore or more or a 1,000 crore turnover or 5 crore net profit must spend 2% of their net income for CSR activities. Rules apply from 1 April 2014.
Crisis and its consequences
The crisis has encouraged the implementation of CSR. The CERES principles were adopted after the 1989 Exxon Valdez incident. Other examples include lead paint used by Mattel toy makers, requiring the withdrawal of millions of toys and causing the company to begin a new process of risk management and quality control. Magellan Metals was found responsible for tin contamination that killed thousands of birds in Australia. The company immediately discontinued the business and had to work with an independent regulatory body to carry out the cleanup. Odwalla suffered a crisis with sales down 90% and its share price down 34% due to the case of E. coli. The company pulled all apple juice or carrot juice and introduced a new process called "pasteurization flash" and maintained an ever-open line of communication with customers.
Geography
Corporations that implement CSR behavior do not always behave consistently in all parts of the world. Conversely, one behavior may not be considered ethical in all jurisdictions. For example, some jurisdictions prohibit women from driving, while others require women to be treated equally in employment decisions.
UK retail sector
A 2006 study found that the UK retail sector showed the greatest level of CSR engagement. Many major retailers in the UK join the Ethical Trading Initiative, an association established to improve working conditions and worker health.
Tesco (2013) reports that their 'essence' is 'Responsible for trade', 'Reducing Our Impact on the Environment', 'Being a Great Entrepreneur' and 'Supporting Local Communities'. J Sainsbury uses the title 'Best for food and health', 'Sources with integrity', 'Respect for our environment', 'Make a difference to our community', and 'Great place to work', etc. The four main issues Where retail UK companies are committed are environmental, social welfare, ethical trade and become an exciting workplace.
Anselmsson and Johansson (2007) assessed three areas of CSR performance: human responsibility, product responsibility and environmental responsibility. Martinuzzi et al. described the term, writes that human responsibility is "the company deals with suppliers that adhere to the principles of natural and good breeding and animal husbandry, and also maintains fair and positive working conditions and workplace environment for their own employees. all products are equipped with a complete and complete list of content, the country of origin is declared, that the company will enforce its declaration of intent and be responsible for its product.Environmental responsibility means that the company is considered to produce environmentally friendly, ecologically, and harmless products ". Jones et al. (2005) found that environmental problems are the most frequently reported CSR programs among top retailers.
Text
- The UN Guiding Principles on Business and Human Rights (2011)
- OECD Guidelines for Multinational Corporations (2011)
See also
References
Note
Source
Books
Journals and magazines
Web
External links
Source of the article : Wikipedia
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