Corporate Social Responsibility (CSR) is subject to a case of debate and criticism. Corporations face the dilemma of pursuing CSR or not. Over the years corporations have come to realize the need for the corporate self-regulation to be integrated in the form of a business model. Propagators of CSR have come to argue that there is a strong business case for CSR, in that the corporations would benefit in a multiple ways by operating with a broader perspective than their immediate short term goals. Critics argue that it is nothing more than putting a face to the existing chaos of insufficiency and hypocrisy. It distracts from the fundamental economic role of businesses. CSR has been redefine and evolved over the years however it essentially tilts to aid the organization’s mission as well as a guide to what the company stands for and will uphold to its customers.
Let us consider the arguments put forth by the critics to define whether CSR actually defines to pass the criteria for being the need of the hour.
“Dilutes the primary focus of the business Profit maximization.” Many have stated that the corporation’s main goal is to maximize its profits and ensure that its shareholders have a substantial return of their investments in the organization. The general perception is that it is the responsibility of the individual to look forward for the well-being of him and his society. The corporation has no obligation to be concerned about the society and it would act as an additional onus on the corporation to think about the social and environmental issues. The corporation would have to take into consideration the perspectives of the stakeholders and then formulate their pursuance of their primary objective of profit maximization. This invariably will please the stakeholders however it will dilute the interests of the shareholders of the corporation.
Another issue that CSR induces is, confusing not only the employee but also the public about what could be ulterior motive of the corporation to adopt the social responsibility. It is perceived as a distraction adopted by the companies to counter the ethical questions raised by their core operations.
CSR on the other hand “addresses issues by using business resources and expertise.”
The scale and the nature of benefits of CSR are difficult to quantify however the benefits can be attributed to various business resources and expertise. CSR uses a variety of business resources like the Human resources, business development and public relations to display its applications.
Human Resources: A CSR program can help in recruitment and staffing in the competitive high skilled graduate market. It also evokes a higher employee engagement particularly when the employees become more involved in the fundraising activities and community volunteering.
Risk Management: CSR focuses on “doing the right things at the right time” thus noting the risk involved in its operations. Risks are an impeccable part of the corporate strategies and have a high visibility in the media, regulators and courts. Risks like corruption scandals and environmental accidents can bring down age old reputations in a matter of hours.
Brand differentiation: CSR plays a role in customer loyalty on ethical basis. It acts as the unique selling proposition (USP) for the corporation to attract more stakeholders. Major brands like “the Corporate Group”, “the Body shop” are built on ethical values. Integrity and Best practices help the organization put up a strong brand image.
The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behavior and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Tullberg believes that humans are built with the capacity to cheat and manipulate, a view taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in human behavior (Tullberg 1996). The most direct benefit is reducing the likelihood of "dirty hands" (Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization. Caterpillar and Best Buy are examples of organizations that have taken such steps (Thilmany 2007).
Increasingly, companies are becoming interested in processes that can add visibility to their CSR policies and activities. One method that is gaining increasing popularity is the use of well-grounded training programs, where CSR is a major issue, and business simulations can play a part in this.
In the documentary “the Corporation”, the history of organizations and their growth in power is discussed. Corporate social responsibility, what a company does to in trying to benefit society, versus corporate moral responsibility (CMR), what a company should morally do, are both important topics to consider when looking at ethics in CSR. For example, Ray Anderson, in The Corporation, takes a CMR perspective in order to do what is moral and he begins to shift his company's focus towards the biosphere by utilizing carpets in sections so that they will sustain for longer periods. This is Anderson thinking in terms of Garret Hardin's "The Tragedy of the Commons," where if people do not pay attention to the private ways in which we use public resources, people will eventually lose those public resources.
References
http://blog.marketingdoctor.tv/2008/03/28/dr-tantillos-30second-how-to.aspx
http://www.careers.ed.ac.uk/STUDENTS/Careers/Corporate%20Social%20Responsibility%20and%20Ethical%20Careers.html
