Corporate social responsibility (CSR) is a business practice of participation in initiatives that benefit the society. Through CSR, a company balances its social, economic and environmental responsibilities to address the expectations of stakeholders (Lindgreen & Swaen, 2010). CSR is a management concern and should be incorporated into the business culture, values, strategy, and decision-making.
Several elements can be derived from the definition of CSR. Foremost, businesses have other responsibilities apart from offering services and goods at the profit. Some of the responsibilities include participating in finding solutions to social problems beginning with the problems they create. The business stakeholders constitute more than shareholders. The operations of businesses also generate impacts beyond marketplace transactions. Further, companies serve a broader category of human values beyond focusing on economic values (Terris, 2005). The main idea behind CSR is that corporations and society are an intertwined entity. Businesses are expected to be socially responsible because they are moral actors within society. Businesses are also regarded as institution and organization in communities.
Place New Order
Three CSR principles apply to business by regarding them as an individuals, organization, and institution. They include the principle of managerial discretion, public responsibility, and legitimacy (Popa&Salanta, 2014). The principle of public responsibility places a responsibility on businesses for the consequences resulting from their involvement with society. This circumstance means that a business has a responsibility to address problems related to their interests and activities. The companies should, therefore, solve the negative consequences they create to the society. Different businesses have different impacts on the resources of society, hence, have varying social responsibilities. The principle emphasizes the relationship of each business to its distinct political, social and ethical environment (Terris, 2005).
The principle of legitimacy states that the society grants power and legitimacy to businesses. The latter, in return, appropriately use the power or lose it if they do not use it to benefit communities. When a business achieves the legitimate functions and a level of relationship with society, it is a granted power. The principle focuses on the legal obligations of the business as a social institution. If the business does not meet the expectations, the society takes away the legitimacy or power. Finally, managerial discretion implies that managers are moral actors required to exercise the discretion since they have to achieve outcomes that are socially responsible. Discretion comes in because corporations do not expressly state the actions of managers regarding social responsibility. The level of implementing CSR depends on the individual with the responsibility, opportunities and choices to achieve the social responsibility of corporation.
Corporate Social Irresponsibility
Corporate Social Irresponsibility is the failure of a business to meet the expectations of society. The situation occurs when businesses behave in a way that is less ideal regarding the expected ethical commitments, legal obligations, and business practice. CSI is also exhibited as a poor response to environmental, social and economic factors (Terris, 2005). CSI is presented in various forms, such as environmental degradation, bribery, corruption, and social injustice among others. The most frequently experienced examples of CSI include human rights violation, unfair and unequal treatment of employees, workplace discrimination, fraud, false product information, and damaging the environment. CSI is a dangerous practice for a business and should be avoided.
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Corporate Social Responsibility versus Corporate Social Irresponsibility
Corporations should embrace CSR and avoid all activities that take the form of CSI. Corporations have not to ignore their responsibility to stakeholders for the sake of short-term benefits. Although the process may require investment of financial resources, CSR generates long-term benefits to the shareholder value. Corporations that embrace CSR utilize opportunities and manage risks derived from environmental, economic and social developments. CSR helps businesses to be self-regulating and monitor its activities in order to keep them in line with the ethical standards, the law, and international standards. CSR helps a company to be responsible for its actions and impact the creation of a positive value to its consumers, environment, employees, and stakeholders. Such practices contribute immensely towards the establishment of trust and loyalty that are imperative for a sustainable and prosperous future (Popa & Salanta, 2014).
Society judges corporations by their behavior and results. One of the factors that help businesses to achieve a good brand reputation is corporate governance. Corporations that integrate corporate social responsibility policies into their core values contribute to a better society. In return, the society will recognize the efforts of these corporations. They can boost their CSR by observing their ethical obligations, supporting public expectations and improving the environmental conditions. Corporations can also create a balance of power and responsibility, prioritize stockholder interests, and provide solutions to prevent social problems. The benefits of these activities to corporations include long-term profits, a better public image, new customers, establishment of stronger customer relations. The corporations embracing CSR also increase their ability to motivate, attract a talented workforce, obtain more resources by influencing investors and policy makers, and reduce government regulation.
Examples of CSR versus CSI
Examples of corporations that have used CSR as secret of success are rife. Google is one of the best examples. For example, the Google Green initiative supports renewable energy to conserve the environment and make efficient use of energy. Since the company launched the initiative, its energy requirement has dropped by half. The company also offers its employees several fringe benefits, such as free meals, entertainment, and medical expense cover. As a result of these efforts, the company attracts the best talents. The corporation receives an average of one million applications every year (Popa & Salanta, 2014).
However, there are various companies that exhibited CSI. A good example is Enron. The print media company rose to fame through unscrupulous means. The firm could intrude into the private information of famous people, such as celebrities and politicians, and publish their information to the public. Enron could also provide sensitive information of individuals, including bank account details. The company could also sack employees that could deny taking part in the unethical practices. When its practices were unearthed, the companys operations dropped in popularity: it lost customers, and ceased to exist. These examples indicate that CSR generates benefits to a corporation, while CSI bears adverse implications.