Corporate social responsibility Guide, Meaning , Facts, Information and Description

Definition

Corporate Social Responsibility (CSR) is a term describing a company’s obligation to be accountable to all of its stakeholders in all its operations and activities with the aim of achieving sustainable development not only in the economical dimension but also in the social and environmental dimensions.

A company’s stakeholders are all those who are influenced by and can influence a company’s decisions and actions, both locally or globally. Business stakeholders include (but are not limited to): employees, customers, suppliers, community organizations, subsidiaries and affiliates, joint venture partners, local neighborhoods, investors, shareholders, and the environment.

Development and analysis

Today’s heightened interest in the proper role of businesses in society has been promoted by increased sensitivity to ethical issues. Issues like environmental damage, improper treatment of workers, and faulty production leading to customers inconvenience or danger, are highlighted in the media. Government regulation regarding environmental and social issues has increased. Investors and investment fund managers have begun to make investment decisions based on social sustainability as well as pure economics. Consumers have become increasingly sensitive to the social performance of the companies from which they buy their goods and services. This accumulation of industry forces pressure firms to operate in an economically, socially and environmentally sustainable way.

Once this was done by spending money on community improving projects, endowing scholarships, and/or encouraging workers to volunteer (blood drives and reading programs are common examples). For many corporations, community outreach programs create good will in the community. This can indirectly increase revenue.

Now, the mission of a socially responsible organization is to take into account the full scope of their impact on communities and the environment when making decisions, balancing the needs of stakeholders with their need to make a profit. This holistic approach to business regards organizations as full partners in their communities, rather than measuring them solely on the basis of products and profits.

Examples of corporate social responsibility

• Most large companies now produce social reports that cover CSR issues. The balance is different from company to company and it is not always clear that companies carry out what they say across the whole organisation. The UK Cooperative bank is considered a model but even tobacco companies like BAT produce social reports.

• Habitat for Humanity is funded primarily through donations from corporations

• The McDonald's Corporation established the Ronald McDonald House. (However, the McDonald's Corporation has been criticised by CSR campaigners for unethical business practices, and was the subject of a decision by Justice Roger Bell in the McLibel case which upheld some of these claims, regarding mistreatment of workers, misleading advertising, and unnecessary cruelty to animals.)

Some critics, such as the economist Milton Friedman, would argue that a corporation's principal purpose is to maximize profits for its shareholders, but only within the context of the law and morality. Some would argue that the only reason to take on social projects is for utilitarian reasons, such as currying favor with the public or with government, or to improve market standing. Others, such as the philosopher Michael E. Berumen, suggest that a business is property belonging to the owners, not stakeholders, and that a business is not equivalent to a mini-state for the purpose of creating social justice or carrying out social planning, and that the owners have the right to dispose of their property as they see fit within the limits of morality, including for profit, social good, or both.

Other sources

• Business ethics
• Business philosophy

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