Corporate Social Responsibility As A Strategy Management Essay

In today’s world the business world is performing corporate social responsibility as a strategy in the market including social activity and responsibility through our environment. In this particular essay, it have been include that what is corporate social responsibilities and what are they, from where and how the CSR concept has been started in the business world. It have been included that the view and the argument in the favor of CSR and against CSR. This essay has shown that how stakeholders affect the organization and corporate social responsibilities, or current existing issues in the modern society .I have also spoken about cause of initiative including avoid the financial risk, in hence the image of the company and reputation in the business world through the corporate social activity. In this assignment I have spoken about the political, public profit drivers for the CSR activity in the organization. But according to the present scenario it have been predicted that the future of the corporate social responsibility is great for business world and this good for the company to enhance the Image of the company as well as reputation in the business world.

INTRODUCTION

Organisations do not work in individually and need to consider that making money is not the only objective of the existence of the organisation. They need to consider the impact of producing goods and services in the market and protect the environment, understand the need of our surrounding society, customers, supplier, government firms, tax authorities and anyone who is affected by their decision in the business world. Therefore business doesn’t exist in isolation and not they should concentrate on making money only, but they need to think of their business decisions and their production method on the stakeholders. Stakeholders can be anyone in the market who is related to organisation and will be affected by the organisations strategies or the decisions. Therefore strategies need to be acceptable to all stakeholders and the investors. This is because employees depend on your business of the organisation. Employees need fairly paid jobs, and customers, suppliers and the local community are all affected by the organisations decisions and activities and impact of productions of good and providing of services on the environment. .

Corporate social responsibility (CSR) is to understand that organisations have more duties, and how their businesses are influencing the world by their strategic decision about how to make profit in the market and how to help their employees to give the good money. Thus they need to think how they should plan their strategies which will have less or nil effect on their stakeholder and their environment and positive impact of their activities on the economy.

I do not agree with the statement ” This type of activity is often regarded as nothing more than expensive PR and that it adds no real value to society or return on investment for the shareholders” due to the following concept.

What is corporate social responsibility?

Is a company responsible to the Society?

What is CSR – Explained by CAROL Model

Develop CSR Policy

Is company responsible to the society?

YES: Because of Enlighten Self – Interest

NO: Arguments by Freidman

YES: Because of Enlightened Self -Interest

A corporation has the same rights and responsibilities as a human being.

A corporation perceived as ethically sound are rewarded with more customers

Employees are more attached to work and more committed to socially responsible companies

Positive contribution to the society may be a long term investment in a safer, better educated and more equitable community create more stable context in which to do the business

Benefits

Increase in customers

Increase in employees

=

Increase in profit

Increase in Shareholders Wealth

Decrease in negative publicity

Dangers

Un ethical behaviours likely to open up in future and company may have problem in meeting their liabilities for wrong behaviours

Companies may not be able to get loan due to un-ethical behaviours

NO: Arguments by Freidman

Freidman says that a company has no responsibility outside of making profit because of the following:

Only human being have moral responsibilities e.g. companies do not have feelings

Government is responsible for the social issues

It is managers duty to act solely in the interest of the Shareholders

CSR make director generous for someone else money

What is CSR – Explained by CAROL Model

Corporate social responsibility is to give stakeholder more their expectation. Carol Model is the best explanation of CSR theory.

Desired by the Society

Economical

Legal

Ethical

Expected by the Society

Required by the society

Economical:

Shareholders need / desired a reasonable profit and return on their investment

Employees want fairly paid job with job security so that they can support their needs and families

Customers want and demand quality product at a fair price ( Value for money)

Legal:

The last is a baseline for operating within the society

It is an acceptable rule books for companies operation

Ethical:

To go beyond the law

To do what is right, just and fair e.g. paying more than minimum wages, rent spare disposal etc

Philanthropic:

Discretionary behaviours to improve the lives of others

Charitable donations

Sponsorships

Improving communities

CSR means organisation needs to take reasonable actions, going beyond the minimum legal requirements and adopt those principles and strategies that are beneficial for the organisation in long run and benefit to the society.

Developing CSR policies:

Classify Stake holders

Importance of each stakeholders group (using Mandelow matrix)

Needs of Stakeholders

Actions

Re-actions

Defence

Accommodation

Pro-action

There are many benefits of becoming socially responsible for businesses which have been explained below:

Corporate social responsibility and organisations

Corporate social responsibility (CSR) can have impact and influence what a business do and have influence on everything they deal with. An organisation needs to consider the following:

The selection of supplier and dealing and negotiations with suppliers. This can be best explain by the exam of those supplier who are not taking care of the environment such as producing goods and services in the way which has impact on the environment e.g. not using an up-to-date technology which can produce goods and services with less pollution in the environment, a supplier who is exploiting labour by not providing appropriate health and safety at work place, not paying their worker appropriate wages etc.

Dealing and providing appropriate facilities to employees. This is meeting, necessary demands and requirement of employees such as paying more than minimum wage rate, better job security and job safety which is the main responsibility of the socially responsible organisation.

The business strategies and their action affect the local communities and what actions an organisations must do if there is an impact on the local communities.

The final one is what will be affect of the organisation’s decision and strategies will impact on the environments and how it can use its resources more efficiently and waste, pollution that damage to environment and this is no in the best interest of the organisations long term viability.

CSR is not just being social and companies do not make profit. CSR help organisation to improve their performances. This is a long term planning to the society which gives a suitable context in which an organisation can reduce their cost such as wasted energy and or reducing water waste etc by adopting new laws and restrictions. A social responsible company will be bringing more customers more employees and this will improve performance in short run and in long run as well. This can also reduce dysfunctional behaviours of individual managers in a divisionalised organisation by making decision which is in the best interest of the organization as whole and is better for community and society within which organisation operation.

Corporate social responsibility (CSR) is not just about doing the correct thing. It means behaving correctly, and also dealing with suppliers who do the same. It also offers direct business benefits.

Building a reputation as a responsible business sets you apart. Companies sometimes favour suppliers who show responsible policies, as this can have a positive impact on how they are perceived by customers.

Some customers don’t just prefer to deal with responsible companies, but persist on it. The Co-operative Group, for example, place a strong emphasis on its corporate social responsibility and publishes detailed ‘warts and all’ reports on its performance on a wide range of criteria – from animal welfare to salt levels in its pizzas.

Focus on social responsibility 

Strategies

Taking a responsible approach to business has been a guiding principle of The Co-operative since its inception. Today co-operative Values and Principles resound strongly with up to date ideas of corporate responsibility. When considering these issues, the business is responsive to the views of its stakeholders, particularly members and customers.

Key developments: 2009

Launch of a Community Plan following member consultation. The Plan sets out three priorities for community investment: inspiring young people, tackling global poverty and combating climate change.

Roll-out of The Co-operative Food Ethical Policy to former Somerfield products as they were rebranded during 2009, and extension of Co-operative ranges, including Fair-trade, to former Somerfield stores.

Launch of a new Bank Ethical Policy following customer consultation; assets and liabilities of former Britannia also became subject to the Ethical Policy following the merger.

Community Investment

Background

It is estimated that, in recent years, British businesses have donated in the region of £1.4bn annually to good causes, through cash and other types of support. Though this figure was expected to fall in 2009, the majorities of large businesses now recognizes community investment as part of their overall approach to business responsibility and have teams and budgets that support such activity. For some, ‘community investment’ is characterized by philanthropic giving with the expectation of little in return, whilst others use such programmes to attain commercial advantage or create a social license to operate.

Indicators

Community contributions: percentage pre-tax profit

Employee time: days contributed

Leverage

Targets 2009

Review current Co-operative activity supporting young people, and develop an ‘inspiring young people’ strategy – this is on track

Raise £2m for The Co-operative Charity of the Year,RNID – target achieved

Complete development of a new two-year grant-making strategy for The Co-operative Foundation by the end of2009 – target achieved

Provide financial support, through the Co-operative Membership Community Fund, to a minimum of 1,000 community groups across the UK, totaling at least £850,000 during 2009- close to target

Trial a new methodology to assess community investment impacts across a minimum of three major community programmers – on track

Targets 2010

Launch and implement an ‘inspiring young people’ strategy.

Identify four charity partners for The Co-operative Foundation; one each in Manchester, Glasgow, Bristol and London, which can fulfill the aims and objectives of the Truth about Youth programs.

Provide financial support, through the Community Fund, to a minimum of 1,000 community groups across the UK, totaling at least £850,000 during 2010.

Assess community investment impacts across a minimum of three major community programmes.

International development and human rights

Background

When undertaken equitably, and with respect for human rights, trade has an unparalleled capacity to lift people out of poverty and enhance quality of life across the world. The day-to-day pressures of business

Competition and majority customer purchasing behavior, together with the political, cultural and socio-economic backdrop of many countries, do however make progress on development and

the assurance of decent labour standards very challenging. It is estimated that the livelihood of nearly three billion people, or half of the world’s population, is made secure by co-operative enterprise, which directly employs an estimated 100 million workers; more than all the world’s multinational companies.

Indicators

Fair-trade range and sales value

Improvement actions resolved

Supplier capacity building

Microfinance support

Support for overseas co-operatives and development projects

Targets 2009

Sustain at least 20% year-on-year sales growth of Fair-trade products in The Co-operative Food in 2009 – target achieved

Commence water access, sanitation and renewable energy project with Fair-trade sugar cane producer communities in southern Malawi during 2009 – target achieved

Ensure The Co-operative Food’s own-brand tier-one production sites complete a self-assessment on work with suppliers to progress corrective actions arising during 2009 – close to target

Extend awareness-raising and training sessions on reverberation sourcing for The Co-operative Food suppliers, with a focus on North Africa, South Africa, China and the UK during 2009 – on track

Work with suppliers of The Co-operative Clothing to progress corrective actions during 2009, following the roll-out of Sedex (Supplier Ethical Data Exchange) to all overseas tier-one production sites – target achieved

Develop a Fair-trade cotton product offering from The Co-operative Clothing during 2009 – target achieved

Increase the number of Travelife-accredited properties, used for The Co-operative Travel’s own-brand holidays, to 25 by the end of 2009 – behind schedule

Launch two new microfinance schemes via The Co-operative Bank during 2009 – behind schedule

Establish one producer co-operative for tea smallholder farmers in the Kericho area of Kenya, with support from The Co-operative College UK and The Co-operative College Kenya – on track

Targets 2010

Ensure all Co-operative Food own-brand tier-one production sites identified as high risk, as at end

September 2010, have a valid independent audit in 2010.

Extend training sessions and awareness-raising on sound sourcing for The Co-operative Food suppliers, with a focus on the UK, China, Italy, Kenya, Thailand and South Africa.

Provide labour standards training to all relevant Co-operative Clothing merchandisers in 2010 and ensure that systems to monitor labour standards are actively managed throughout 2010.

Increase the number of Travelife-accredited properties, used for The Co-operative Travel’s own-brand holidays, to 25 by the end of 2010.

Commence a project with The Travel Foundation to create supply links between agricultural co-operatives and hotels used by The Co-operative Travel in Turkey.

Introduce an affinity product in The Co-operative Pharmacy that supports overseas development during 2010.

Launch a new microfinance scheme via The Co-operative Bank during 2010.

To benefit Fair-trade sugar producer communities in Malawi, ensure existing damaged boreholes are repaired, over 300 new latrines are constructed and over 50,000 trees are planted by end 2010.

Commence water access, sanitation and renewable energy project with Fair-trade banana co-operative

Communities in Panama during 2010.

Successfully establish two pilot funeral co-operatives in South Africa.

Ethical finance

Indicators

Ethical finance: The Co-operative Bank

Socially responsible investment: The Co-operative

Asset Management

Targets 2009

Devise and implement a Co-operative Investments shareholder engagement programs on the effects of neonicotinoid pesticides on bee population decline – target achieved

The Co-operative Investments to launch two new ethically screened investment funds – target achieved

Consider the development of an arrangement whereby a deduction is made, at CFS’ cost, from international payments fees, in order to support funding of The Co-operatives international development activities – on track

Consider a distinctive social and ethical consumer proposition for the general insurance business – behind schedule

Targets 2010

The Co-operative Asset Management (TCAM) to integrate climate change impacts into fund analysis on all core equity investments.

TCAM to co-file shareholder resolutions at Royal Dutch Shell plc and BP plc regarding tar sands operations.

Consider a distinctive social and ethical consumer proposition for the general insurance business.

Launch a Social Banking Unit to bring together banking services for the environmental, social and charity sectors.

(Re.: http://www.co-operative.coop/corporate/Sustainability/social-responsibility/)

The above practical exam show how co-operative is being successful in achieving its target and maintaining its growth and profitability.

Reduction of resources used for the productions and provision of services and waste minimisation do not only help environment but also it reduces cost for the business. A research shows that an organisation can save 5% to 10% of its revenue by minimising waste and effective use of energy in their business. Due to a waste majority of the benefit not only private organisation are finding the way which will reduce its impact on the environment but also public sector also moving toward saving energy, using minimum recourses like carbon reduction and etc to achieve value for money in providing services to communities and residents in the local communities.

Reducing wastes saving energy, reducing disposal cost is not hard, it may look expensive but it can bring a long term sustainable continuous cost reduction benefit and improve profitability which server the best interest of long term objective of Shareholders wealth, which is maximisation of shareholder’s wealth. There are various guidance on www.businesslink.gov.uk website on how save money by reducing waste and use your resources more efficiently.

Save money by reducing waste

“Resource productivity” means extracting the most value from resources, making the best use of renewable resources and minimising waste produced. It has the potential to drive down costs by reducing waste and pollution and will create opportunities for growth through process and product innovation.

Business benefits of reducing your waste

Immediate cost savings can be achieved by:

reviewing your activities and processes and making simple changes such as printing or photocopying on both sides of the paper

designing packaging so that it can be reused

reusing any waste you produce until it no longer has any value and then recycling the materials

The penalties for failing to manage environmental risks properly can also be substantial. You could experience damage to your reputation, disruption to your business or financial penalties

(Ref.: www.businesslink.gov.uk)

Reduce your packaging waste

A high proportion of waste is actually packaging. Innovative design can mean that the amount used is reduced and that all packaging can be reused or at least recycled. Using the minimum and most efficient packaging will increase your competitiveness and save you money, as well as attracting environmentally-aware consumers

Other ways of improving packaging use are:

using recycled materials where possible

designing the packaging using the least amount of materials necessary

reusing your own packaging to create new packaging or in other areas of your business

(Ref.: www.businesslink.gov.uk)

Cut waste in production processes

Waste arising from your production process can have a significant effect on your profitability. The challenge is to reduce this waste without destabilization the effectiveness of the process.

Common things you might do to improve the efficiency of your production process and reduce waste include:

reusing rinse water in cooling systems

regularly checking that equipment is correctly calibrated

reducing unnecessary stoppages in a production line

upgrading or replacing old equipment

minimising spills or leaks

Using sealed systems to allow all the waste to be collected in one place, without leakage, so that as much waste as possible can be reused, recycled or disposed of correctly.

An effective waste minimisation programme scrutinises the whole business from product design to suppliers, production practices to disposal. It will also enable you to minimise the different input resources, including water and energy, chemicals and solvents, and paper and electrical equipment.

(Ref.: www.businesslink.gov.uk)

Reduce your use of raw materials

While recycling waste is an important part of any waste management strategy, it isn’t enough. Waste needs to be designed out of the system at source, and what cannot be designed out should be reused. Developing better ‘closed loop systems’ – where waste is treated as a resource – eliminates the need for unused resources and waste disposal.

If you’re a manufacturer, using raw materials more efficiently can bring significant cost savings and environmental benefits. To do this, you should look at all aspects of your production process, including transportation and warehousing.

(Ref.: www.businesslink.gov.uk)

Reduce waste in your office

The best way to reduce office waste is not to produce it in the first place. Before making a purchase, ask yourself if you need to buy the goods or materials, or if you are buying excess amounts.

You could also:

ask suppliers to use less heavily packaged products and to take away excess packaging when they deliver

reuse or recycle paper, printer toner and ink cartridges you would normally throw away

change your printers’ settings to print in double-sided format and consider printing internal documents in ‘draft’ quality

cancel junk mail and unwanted publications – contact the sender directly and ask them to remove you from their mailing list

use electronic communication where possible to reduce faxing and printing – encourage staff not to print out documents and emails unless absolutely necessary

reuse paper that has only been printed on one side for draft or scrap message pads

reuse envelopes if possible, for example to send internal mail

donate surplus card or coloured paper to your local school or nursery

Ensure that you do not leave lights, heating and equipment on unnecessarily. This can add significant costs to your business.

(Ref.: www.businesslink.gov.uk)

There are other benefits too:

A good repute makes it easier to recruit employees.

Employees may stay longer, disruption of recruitment and retraining and reducing the costs.

Employees are more productive and better motivated.

CSR helps guarantee you comply with regulatory requirements.

Activities such as contribution with the local community are ideal opportunities to generate positive press coverage.

http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCESHYPERLINK “http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1075408491″&HYPERLINK “http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1075408491″itemId=1075408491

Good relationships with local system make doing business easier.

Understanding the wider force of the business can help you to develop new products and services.

CSR can make you more competitive and reduces the risk of unexpected damage to your reputation (and sales). Investors recognise this and are more willing to finance you.

http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCESHYPERLINK “http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1075408491″&HYPERLINK “http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1075408491″itemId=1075408491

How business can impact the environment

Organisation may affect its stakeholders such as employees, customers, suppliers and the local community, government and other stakeholders who have some sort of interest in the organisation including impact on the environment.

If an organisation will have care for the environment it will increase its performance and hence revenue as many customers will like to buy from responsible companies and many employees want to work for those companies who care about the environment in which they live and operate. This is a positive long term, sustainable improvement.

There are all sorts of ways in which you can reduce the environmental impact of your business. For example:

creating recyclable goods

Using recycled materials and sustainable timber

minimising packaging

buying locally to save fuel costs

creating an fuel-efficient and efficient distribution network

working with suppliers and distributors who take steps to minimise their environmental impact

use energy saver tube lights to save electricity.

How can organisation deal fairly and reasonably with their customers?

Organisation can improve their productivity by working closely with their customers and deal them in a reasonable and fair way so that their objectives can be met and organisation’s objectives are also achieved. As we know that customer wants a reasonable quality product at a fair price. To achieve this organisation need to deal with their customers in the following way:

Marketing is the main important part of the business. Organisation need to to make sure that their marketing materials are in simple English and do not hid anything in the small print, which is often the catching point and tying up customers in a longer contract or in some sort of other agreement.

Organisations need to be honest and take steps with social consideration in mind.

This will achieve more customer appreciation and their loyalty.

How can organisation deal fairly and reasonably with their Supplier

Organisation need to be very careful when selection their supplier, they need to keep in mind corporate social responsibility (CSR) and select those supplier who are local and this help to support community and also reduces the energy wasted and carbon emissions from deliveries.

This also includes the following:

Examination of their employment policy.

Examination of health and safety and environmental practices.

Organisation need to treat their suppliers fairly, paid them on time can make a big difference to them.

Work with the local community

Working with your local community brings a wide range of benefits. For many businesses, local customers are an important source of sales. By improving your reputation, you may find it easier to recruit employees. A good relationship with local authorities can also make your life easier. For example, some local authorities prefer to award contracts to businesses with a record of community involvement.

There are many ways to get involved. Some businesses choose to support a local charity, or sponsor a local event. It makes commercial sense to get involved in an activity related to your product. This lets you use your expertise as well as showing the human face of your business. For example, some restaurants provide food to local homeless groups, while builders may give free labour and materials to community projects.

Benefit from corporate social responsibility

Make the most of your corporate social responsibility (CSR) actions by publicising them. Ensure that customers, suppliers and the local community know what you are doing. CSR lends itself to good news stories.

Publicity like this can be a key part of using CSR to win contracts. People want to buy from businesses they respect. CSR can be particularly effective for targeting ethical companies, the public sector and not-for-profit organisations.

At the same time, you should see CSR as part of a continuing process of building long-term value. Everything you do should help improve your reputation and encourage customers and other stakeholders to stay involved with you. A business that buys recycled paper – but exploits its customers and ignores the community – has missed the point.

(Ref.: www.businesslink.gov.uk)

CONCLUSIONS

From the above analysis of business world it can be concluded that the corporate social responsibilities is corporate strategy to make good relation with investors in the business world. Corporate social responsibility has a strategic location and resources which is competitive enough to stand in the market and make stronger firms economic but to secure a competitive edge over its business rivals it is important for the firm to perform their social and environment responsibility and make their consumer and their stakeholder, invester. From the various tools and the factor used it is clear show that the firms are engaging and spending a huge amount of their profit in the market for corporate social responsibilities.