Concept of Corporate Social Responsibility and Gaining

Question: Discuss about the Concept of Corporate Social Responsibility and Gaining. Answer: Introduction The assignment is aimed at understanding the concept of corporate social responsibility and gaining a deep insight into the arguments that are in favour and against the companies that demonstrate corporate social responsibilities. The assignment also discusses some important activities of Google, which the company is carrying out to demonstrate its corporate social responsibilities. Corporate Social Responsibility Corporate social responsibility, also known as CSR, is defined as a business approach that aims at working towards the betterment of the society, environment and the stakeholders without expecting anything in return. Corporate social responsibility is a relatively new concept that has come into limelight in the past few decades (Lexicon.ft.com, 2016). The companies these days are under a lot of market pressure and even the customers want to be attached to those companies which are concerned about the stakeholders and the environment in which they are working. Further, with the rising levels of global warming, the companies too have realized that they have been degrading the environment over the past few decades and it is the right time to start working towards protecting the environment in which they have been working. As a result, companies nowadays are demonstrating their corporate social responsibilities in a number of ways (Corporate Social Responsibility, 2016). Let us now discu ss some common ways in which companies are trying to demonstrate their corporate social responsibility: Environmental efforts one of the most common ways in which business organisations are trying to become more responsible towards the society is by adopting the principles of environmental stability into all the business decisions that help in minimising the impact of a companys activities on the environment. Philanthropy another common way of demonstrating ones responsibility towards the society is by donating money to organisations that work for some social causes or to some national or international charity organisations. Ethical labour practices corporate social responsibility also covers the employees, who are an important stakeholder in the business. Thus, by following ethical labour practices, companies are trying to demonstrate their corporate social responsibility towards the employees. Volunteering another market trend, which has recently become famous, to demonstrate social corporate responsibility is by attending volunteer events in order to polish the image of the company in the market. Arguments in Favour of Companies Practicing Corporate Social Responsibility Many people are of the view that corporate social responsibility is just a simple concept that exists in papers or in books and a concept that the companies can use to improve their market image. It might be hard to believe for such people that corporate social responsibility is actually a full-fledged concept for which business organisations are spending millions of dollars every year. They not only do it to achieve a better image in the market but are doing it because they have understood the importance of working towards the society, which is the key to all the business activities. Let us now discuss some arguments that are made in the favour of those companies that demonstrate corporate social responsibility: Satisfied employees corporate social responsibility does not only cover acting responsibly towards the environment or the customers but also extends to the employees as well. Employees love it when the company gives them extra attention and feel proud when they are working for a company that plays an important role towards the betterment of the society and the environment. When a company demonstrates its responsibilities towards the society, it improves its image in the market and is able to keep its employees happy (Mahajan, n.d.). As a result, the productivity increases and the employees become more committed towards their jobs and the organisation. Satisfied customers it has been found that the customers love to get into business with those companies that are responsible towards the environment and the society. It has also been found that the sales of environment or eco-friendly products are greater than the normal products. A study conducted by IBM concluded that majority of the business executives were of the view that the companies could achieve market competencies by demonstrating their social responsibilities towards the stakeholders. Positive promotion positive promotion is one of the prime reasons that motivate business organisations to demonstrate their corporate social responsibilities. Companies that demonstrate their corporate social responsibilities in the public are able to achieve a lot of positive promotion for them. Instead of investing millions of dollars into advertising and promotional campaigns, companies can instead invest the same amount of money into social causes and can find better promotional opportunities (Mahajan, n.d.). In fact, an act of responsibility towards the environment or the stakeholders is always appreciated by the media, which obviously attracts a lot of market attention. Cost reductions another benefit of demonstrating corporate social responsibility is that it helps in decreasing the operational costs instead of increasing them. If a company is able to properly execute its responsibilities towards the environment or the society, it can save a lot of important resources from going waste. For example, a company can reduce its operational costs by saving energy and ensuring that all the appliances, machines and other such equipment are turned off when not in use. On the other hand, good deeds intended towards the stakeholders also help in retaining and attracting talented employees. Thus, a company can easily bring down its operational costs to a great extent if it is able to demonstrate some corporate social responsibilities. Better business opportunities indulging into corporate social responsibilities also help companies in opening up new and potential business opportunities that can become a turning point in the companys timeline. Good deeds in the market can attract a lot of like-minded customers, business owners, suppliers, etc. and by joining hands with them companies can open up a lot of business opportunities for themselves (Trong Tuan, 2012). Arguments Against Companies Practicing Corporate Social Responsibility Like any other thing in this world corporate social responsibility too has its cons and pros. Where some people really appreciate the concerns that the companies have for the environment, society and the stakeholders, there are some who consider it to be not so good for the business of an organisation. Let us now get a deeper insight into the arguments that are against the companies that practice corporate social responsibilities: Green washing it has been observed in the past few years that most of the companies, in order to compete with the market leaders, end up making false claims regarding their social corporate responsibilities whereas they do not do anything for the betterment of the society or the environment in actual. A major reason behind this mistake is the clash of interests. The managers are asked to run the company in a way so that the wealth of the stakeholders can be maximised and they stand the risk of losing their jobs if they try to allocate more resources to things such as corporate social responsibilities. Thus, they end up making false claims in the market, which when discovered, can prove to be detrimental to the market image of the company. Such companies lose more than they could have gained by actually doing something for the betterment of the society or the environment (Visser, 2007). Costs one of the major reasons behind the criticism of corporate social responsibilities is that some companies are not able to compete with the other companies in performing good deeds (Visser, 2007). It is obvious that large scale companies can afford to shed millions of dollars every year for demonstrating their corporate social responsibilities, which is not the case with medium or small scale organisations. Medium or small scaled organisations can suffer a huge setback if they try to demonstrate corporate social responsibilities and shed their hard earned money (Zahid, n.d.). Losses to companies it has been noticed a number of times that a few companies end up damaging their own market image in order to demonstrate their concern for the society and the environment. Such companies disclose the shortcomings of their products in case they are found guilty of violating their corporate social responsibility program. it has been experienced a number of times that some companies have called their entire stocks back into the warehouses even after a large portion of the product had already been sold in the market (Lexicon.ft.com, 2016). Shift from profit making objective we have studies in all the books that the prime reason for operating any kind of business is to earn profits. Milton Friedman, a famous economist and a critic of corporate social responsibility, was of the view that indulging into corporate social responsibilities can cause a shift in the focus of the business organisation from maximising the stakeholder wealth to community welfare. He also said that many organisations end up losing their important resources in order to demonstrate their corporate social responsibilities (Zahid, n.d.). A Company Leading in Corporate Social Responsibility Activities For those who believe that businesses are run by selfish business men who cannot spare money for the betterment of the society, it might be shocking to know that corporate social responsibility has changed the way in which business organisations perceive the society, the environment and the stakeholders. So far, companies throughout the world have spent trillions of dollars in order to improve the conditions of the society and to protect the environment from harmful business activities. Google, the leader in the information technology industry, has also demonstrated its concern for the environment, society and the stakeholders. The company has been a lot of initiatives to improve its image and to do something for the betterment of the society. One such initiative that the company has recently taken up is Google Green. Under this program, the company aims at reducing its energy usage by utilizing the energy in the best possible manner and to switch to renewable source of energy wherever possible. The company has been trying its best to foster a workplace culture where the employees are concerned about their surroundings. The company is saving a lot of energy by ensuring that the electronics, which are not being used, are switched off. By ensuring efficient and careful use of energy resources, the company has been able to bring down its data centre energy usage by 50% already. The company has also tried its best to reduce its carbon footprint by taking off 3,000 cards from the roads and starting a shuttle fleet that is now used by Google employees to commute from one place to another. Further, the company has also been recycling products to avoid wastage. Such efforts have not only helped the company in bringing down its operational costs but have also helped them in achieving a better image in the market. It can be observed from the above given facts that the leading companies in the world are actually leading the corporate social responsibility movement by setting examples for their rivals. Google has been performing exceptionally well and has also demonstrated its true concern towards the environment and the stakeholders. Conclusion Even though many people criticise the concept of corporate social responsibility, the benefits of the concept have been known to all. It is an excellent approach that helps business organisation to do something in return for the society and the environment, which helps them in carrying out their business activities. Thus, the companies do have a social obligation towards the society and they should try their best to fulfil it by working for the betterment of the society and protection of the environment. 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