Corporate Social Responsibility (CSR) The Palanetary Bargain

Question: Discuss the importance of corporate social responsibility (CSR) and elaborate on its possible advantages and dis-advantages. Answer: Corporate social responsibility (CSR) refers to the ways in which the organization integrates economic, social, environmental concerns to the values and decision making in a transparent and accountable manner so as to improve the society. These elements of CSR are inter-related inter-connected and used by firms where they operate. It shall be seen that, CSR has been referred to as a central management concern (Hunnicutt, 2009). Different organization practice CSR in a different manner. Therefore, corporate social responsibility (CSR) has been referred to as a voluntary activity which is done by the employees society as a whole. Corporate social responsibility (CSR) refers to the series of events which the organization does in order to give back to the community and earn more profits. According to Horrigan 2010, there is no specific definition of what corporate social responsibility (CSR) is. Baker 2004, on the other hand defines CSR as the process opted by the organizations to produce an overall positive impact on the society. The following portion of the essay takes into consideration the advantages dis-advantages of corporate social responsibility (CSR). The first advantage of CSR is the improved version of the organization. With the help of CSR, the corporation will be able to earn high levels of goodwill. This serves dual purpose i.e. people would want to buy the product offered by the organization and other similar business corporations would want to be associated with the firm in a long run. This increases the image of the organization and its name would be synonyms with reliability goodness. Third party would want to be associated with the organization as it would be referred to as the best in the market (Zu, 2009). Second advantage of CSR is increased attraction retention of the employees. It shall be taken into consideration that, companies who are highly committed to CSR values find it easier to retain and recruit the employees. People want to get associated with organizations that care about the well - being of its employees by providing them with good work conditions. Financial assistance, regular appraisals will help the corporation to attain and retain more employees. In short, if the companys workforce is happy it will help the organization to earn more profits due to their increased efficiency. Thirdly, company attracts more capital inflow from various other sources. It shall be seen that, the image of the company plays an important in grasping investors. Therefore, companies who are engaged in regular CSR commitments get a massive boost and hence people invest in operations massively. The next advantage of CSR would be an increased positive publicity. It shall be taken into consideration that any publicity for company shall be referred to as good publicity. More and more people shall know about the products they offer (Visser, 2007). A good CSR program will help the organization to give good publicity and enhance its brand value. Good publicity also helps the orga nization to have an edge over its competitors. The competitors might be selling the product at a lower rate, but since the company with good CSR values is giving back to the society, therefore, people do not restrict themselves in spending an extra amount for the same. Lastly, companies who have invested in the CSR activities, the operations department shall be made sure that it does not harm the environment in any manner. Therefore, innovation of machines tools which will help to reduce wastes from the organization will help the company to have a clean environment (Trong, (2012). Apart from the advantages of CSR mentioned above there are various dis-advantages of the same. The first and foremost disadvantage of CSR is to shift from profit motive organization. Mitlon Friedman, an economist is the biggest critic of corporate social responsibility (CSR). He believes that, CSR shifts the main focus of the company i.e. its a financial entity first not a non - profit organization. He also states that, company tends to forget its obligations towards the stakeholders and the revenues they have to earn. Instead of engaging in profit making they are involved in CSR campaigns. The second disadvantage of CSR is customer conviction. As stated above, people tend to get attracted to companies who follow the CSR initiatives. People like the fact that, these programs are for a good cause (Tilt, 2016). But, CSR in the long run when does not gives instant results the customer feels that these are no less than publicity stunts. Therefore, it becomes a difficult task to convince the customers when the results take some time in coming out. Third disadvantage of CSR is the increased cost of production. It has been seen that, CSR leads to an increase in the cost of production. The increased expenditure can be seen in the increased prices of the products which the customer has to pay. It shall be noticed that, big corporations might not increase the prices but the small organizations will not be able to sustain in the market in the long run (Crowther Capaldi, 2008). Lastly, corporate social responsibility (CSR) will hamper the reputation of the company in a long run. It has been seen that, companies who practice CSR campaigns sometimes have to disclose the flaws in their own products if they tend to violate the CSR policies. For instance, a big vehicle manufacturing company asked to provide back the vehicles when they found a defect in the model. This has hampered the reputation of the company. In such cases, the trust of the customers is broken and large amo unt of inconvenience is caused to the consumers. References Baker, M. (2004).Definitions of corporate social responsibility - What is CSR?. [online] Mallen Baker's Respectful Business Blog. Available at: https://mallenbaker.net/article/clear-reflection/definitions-of-corporate-social-responsibility-what-is-csr [Accessed 29 Aug. 2016]. Hopkins, M. (2003).The planetary bargain. London: Earthscan Publications. Horrigan., B. (2010) Corporate Social Responsibility in the 21stCentury: Debates, Models and Practices Across Government, Law and Business, Edward Elgar Publishing, Cheltenham, UK. Hunnicutt, S. (2009).Corporate social responsibility. Detroit, MI: Greenhaven Press. Sacconi, L., Blair, M., Freeman, R. and Vercelli, A. (2010).Corporate social responsibility and corporate governance. Basingstoke: Palgrave Macmillan. Taticchi, P., Carbone, P. and Albino, V. (2014).Corporate Sustainability. Dordrecht: Springer. Visser, W. (2007).The A to Z of corporate social responsibility. Chichester, England: John Wiley Sons. Zu, L. (2009).Corporate social responsibility, corporate restructuring and firm's performance. Berlin: Springer.