Trends in the Global Business Environment

Contents

Introduction.

Role of Corporate Social Responsibility.

Evolution of CSR..

Meaning of corporate social responsibility.

Planned supports of corporate social responsibility.

Nature of corporate social responsibility.

Examples of companies adopting CSR practices.

Advantages of Corporate Social Responsibility.

Significance of Corporate social responsibility in today’s world.

Role of CSR in today’s world.

Conclusion.

References.

Introduction to Role of Corporate Social Responsibility

In today's highly competitive environment, there has been a constant evolution of a concept known as 'corporate social responsibility' (CSR). It has widely being followed in the business context by the companies to achieve a competitive advantage. More and more businesses in today's environment are appreciating that to remain dynamic, pertinent, and competitive in a promptly varying business scenario; they have to become socially accountable. CSR can be defined as the business policies needed to operate the business in an ethical, and socially friendly manner. Moreover, it must entail the strategies to run the business that is beneficial to the development of the community at large (Turner et al 2019). Today, every business is taking a step ahead in adopting these practices so that they can position themselves in the minds of the public as a business that thinks for the welfare of society. This concept applies to businesses of every size. The CSR practices enable businesses to reflect on the benefits of the society by taking accountability for the influence of their events on the suppliers, employees, communities, investors, customers, and other stakeholders. This report discusses the role of corporate social responsibility in today's world. Moreover, it entails the accurate meaning of the CSR concept and its evolution. Furthermore, it discusses the benefits of these practices for the business organizations by reflecting its importance in the business.

Evolution of CSR

Companies have been utilizing the concept of corporate social responsibility for decades to give back to civilization and strengthening the reputation of the business. This is the concept of management that is the creation of the 20th century and has taken form in the early 1950s. It is also true that the concept of CSR is one of those that truly extends over two centuries. The term 'CSR' was officially coined in the year 1953 by Howard Bowen in his book named as social responsibilities of the businessman (Suresh 2020). This was not until 1970 that this concept started to take flight in the US. The social contract concept between the companies and society was developed by the committee for economic development. This concept further leads to contribute to the idea that businesses must have liability for the needs of society. Furthermore, in 1980, businesses came forward to take social interest in their corporate practices and becoming more accountable to the stakeholders. Finally, in the year 2000, this concept has become an essential approach for numerous businesses to integrate this into their core operations. 

Meaning of Corporate Social Responsibility

Corporate social responsibility refers to the concept that allows businesses to contribute willingly for the betterment of the society as well as the environment. It can also be defined as the responsibility of the company for the impacts of its actions and movements on the environment and community. In a broader sense, it means taking into consideration the expectation of stakeholders, complying with laws and regulations with global norms, engaged in sustainable development, by the business. It is characterized by the assistance assumed by the businesses to people through its actions and its social security. The idea of corporate social responsibility has been improved today to being more pertinent in the decision making of companies, because of the dynamics like information expansion that has made the participants more conscious of how the business acts and takes accountability (Choi et al 2019). It has become an essential part of profit maximization, in a long period. Furthermore, the core principles of CSR that business must adhere to are as follows:

  • Promote fairness and removal of discrimination concerning employment.
  • Hold this accountability to their supply chain and certify these principles are maintained by their associates, dealers, distributors, and others.
  • Take accountability for all eco-friendly influences of the business.
  • Support and admire the safety of human rights. Moreover, businesses must certify they are not complicit with any misuses in their processes.
  • Obey the moral corporate practices like responsible marketing, whistle-blower appliances, and anti-corruption events (Yu et al 2019).

Planned Supports of Corporate Social Responsibility

  • Society: It is a fact that companies operate within a social system and takes the resources needed from there itself. Therefore, business organizations must have accountability to maintain and improve the welfare of the participants and members of society. The real-life example can be seen by the initiatives of Dabur Company who started certain essential programs for environment revival and security of plants. Moreover, this company is also engaged in replanting in the Himalayan ranges.
  • Code of conduct: These refer to the range of regulations depicting the accountabilities of suitable practices for a business organization. Additionally, they refer to principles, values, and practices.
  • Philanthropy: It can be defined as the process in which companies act towards donating some part of their profits or certain assets to other not-for-profit companies. This kind of initiative can be seen by IBM Company who gives numerous dollars every year to such organizations through its business philanthropy initiatives.
  • CSR program: The CSR programs are intended to encourage corporate accountability by involving publically held organizations to accept more advanced social and ecological policies using the strength of possession to promote optimistic change (Carroll, A.B. 2016).
  • Good governance: Business governance can be defined as the rules, laws, and procedures through which companies are operated, controlled, and regulated. It is a means to the integrity of companies, markets, financial institutions, and central to the health of our economies and their stability.
  • Customer gratification: All the businesses must understand the importance of customer satisfaction as they are only who can drive the profits of the company. It is a fact that without the satisfaction of customers, a company cannot thrive for the long term in the industry.
  • Stakeholders’ interest: One of the major accountability of the business organizations is to safeguard the welfares of all its stakeholders who are responsible for the financial needs of the business.

Nature of Corporate Social Responsibility

Emphasis on business organizations: Since both the non-business and business companies must be accountable towards the welfare of society. The concept of CSR practices focuses more on business organizations so that they can look after the social interests of the community. 

Universal activity: This means that social responsibility is not just the obligation of upper management. However, the company must involve all its employees in these activities that would be helpful in their professional as well as individual development.

Ongoing activity: It means that CSR practice is not serving the welfares of the community once or twofold. It is essential for companies to constantly involve in social matters if they want to thrive for the long term (Hamidu, Haron and Amran 2016).

Profit maximization: Social aims are settled by economically rigorous companies. A fiscally unrealistic business cannot look after the welfares of society. It may be possible that they may pass the social accountability to users by increasing prices of merchandise and services.

Deals with ethical matters: There is no doubt that businesses have particular programs and strategies to take care of the welfares of its workers and other participants. Moreover, the strategies are intended and planned from the necessity to do what is moral and justifiable for the community.

Examples of Companies Adopting CSR Practices

Google: The Google Company has constantly doing its efforts for the betterment of the community despite being the largest company in the world. This company has initiated a policy named as Google Green that was implemented against environmental concerns. This policy was designed to utilize the assets competently and assist in renewable energy sources. Moreover, it was successful in reducing entire power necessities for its centers by 50 %.

Target: The Company named as Target has been constantly implementing CSR practices since 1946. It has been providing local and environmental assistance to society. Moreover, it also arranges and gives to numerous charity movements and initiatives. Additionally, it has donated approximately $ 875 m in the education field that is a positive sign for the company in terms of the reputation of its business.

Microsoft: This Company integrated the CSR practices through its work to attain the client's faith. It started a program named Microsoft YouthSpark that aimed for creating prospects for millions of youth and the company wants to invest more in the youth of today through this program (Sehgal et al 2020).

TOMS: The CSR practices of this company are embedded in its mission statement itself. The mission of the company is to donate a pair of shoes for each pair being sold and has led to a donation of approximately 60 m pairs of shoes to children who are I need for the same. Furthermore, the profit earned by the company is utilized for helping the visually weakened people by offering them with medicament glasses and the required medical treatment (Ford and Stohl 2019).

The Walt Disney Company: This Company is dedicated to working for minimizing its carbon footprint with the aim of zero-emission of greenhouse gases, no waste, and a pledge towards conserving water. Moreover, they ensure that they set tough global labor guidelines to conserve the safety and rights of workers. Furthermore, this company is active in the community and motivates its workers to engage in the community. The company also has certain healthy living initiatives to promote healthy eating habits among the workers.

Advantages of Corporate Social Responsibility

The study by Księżak (2016) stated that there are numerous advantages of incorporating the practices regarding corporate social responsibility. The benefits are both for society and business organizations. Talking of benefits for business organizations, these are in the form of cost reduction, employee motivation, making revenue, and risk mitigation, customer loyalty, avoiding governmental regulations, better quality, and many more. The benefits of CSR to the society are in the form of higher living standards, increased health, social activation, economic development, technology and infrastructure, better job prospects, and more. With these practices, a company has greater competencies to have an optimistic influence on society. It encourages companies to act morally and to reflect the environmental concerns of their businesses. It enables them to evade the harmful impacts of their business on the society and community. Moreover, it allows the business to discover ways to implement changes in the value chain activities of the business that offers aids for the community. Furthermore, CSR practices support the public worth consequences.

Public worth is the value that is offered by the business to society. The Vigorous CSR practices by the business can assist the companies to bring the public worth consequences by concentrating on how their services can make a change in society. Moreover, these practices help the business in becoming an employer of choice for all its stakeholders like customers, staff members, investors, and more. An efficient CSR strategy can also aid the company in becoming more appealing to probable employees who are searching for work with socially accountable practices, through morals, and public mindedness. Additionally, it inspires both the specialized as well as individual development. It means that involving the employees in the activities of the business that are relating to social responsibility. This further helps them to accept the activities that are separate from their normal work accountabilities and they get the chance to contribute towards the welfare of society and the environment. This ultimately helps them grow professionally as well as help them to enhance their individual outlooks. The foremost and essential benefit of CSR practices is that it improves the relationships with the customers. It helps in preserving a sense of trust and faith within the company. It can reinforce relations, build agreements, and raise robust working associations with both the current as well as novel customers (Shaukat, Qiu, and Trojanowski 2016).

Significance of Corporate Social Responsibility in Today’s World

There is no doubt that CSR plays an extremely essential role in making the organization's functions as smooth as possible. CSR practices are significant in the following way:

  • Worker’s motivation: It is a fact that workers are the most valuable resources of an organization. Therefore, this is the principle of the organization’s responsibility to this significant stakeholder group in respect of CSR agreement. It further means that handling workers with esteem and offer those with a reasonable working environment and establishing fair recruiting practices. This all improves the morale of workers within the workplace and motivated team working.
  • True commitment: Here, it means that a company that shows a true commitment towards the CSR practices in business is the most successful in today's cut-throat competition. A company that utilizes sustainable resources in its products, and at the same time contributes certain financial resources for combating the environmental issues will be the most appreciated by the consumers and customers of the business. This will enable the company to thrive for a longer period of time in the industry.
  • Social media presence: There have indeed been vast advancements in technology and innovation due to which most of the people have gone online for looking for business products'. Usually, they make use of social media platforms for searching for reliable business products and services. Therefore, this is the major reason for businesses to have visible campaigns for CSR practices due to the massive prevalence of social media. Furthermore, these platforms are a way of evaluating the perceptions of the people about particular products, and competitor’s strategies. The business must set up its employee giving programs using social media to publicize these movements that further help it in creating a strong brand image.
  • Building an optimistic workplace environment: The major significance of corporate social responsibility can be seen in the workplace environment itself. It means that providing an environment where workers can see the company has true integrity and morality, they are more motivated to engage in their activities and results in enhancing the productivity of the company. Furthermore, this will lead to building a sense of communal and collaboration that brings everybody together and leads to more gratified employees,
  • Government associations: It is also true that the businesses that focus more on CSR practices can easily approach the government and political regulators. While the companies that demonstrate irresponsible disrespect for CSR are inclined to find them fending off numerous inquiries and explorations.
  • Public relations: It means a strong technique for determining consumer awareness and building an image of the company. The businesses that actively promote their social accountability actions often take steps to publicize these efforts through the media.
  • Viability and value: CSR policies help the business to benefit the environment and create value for itself. It means that the adoption of waste policies and energy efficiencies in its business operations, a company can cut operational costs and benefits the external environment. Moreover, it also enhances the accountability of the company and its transparency with investment analytics and the media, shareholders, and local communities. This further improves the reputation of its business among investors like mutual funds that incorporate CSR into their stock selection.

Role of CSR in Today’s World

In the present scenario, it is a fact that business organizations have to take more accountabilities than just making profits out of the business. They must meet the numerous responsibilities that entail the justifiable treatment programs for the workers, certifying a secure working environment for them. Moreover, these entail important and welcoming methods for a supportable environment and contribution to social roots to eradicate social issues and resolve moral problems. Business corporations nowadays are playing its essential role in embracing the CSR practices in order to assist society and the community in finding solutions to their issues. They are now of the view that unless or until they take responsibility to resolve problems, the issues will not go away.

It is a fact that in contemporary times, people are much conscious of the social and environmental issues, and are more aware of their social justice. They are expecting that organizations would engage in local assistance and offering a sense of relief to needy people. Therefore, investing in the social substructure and corporate social responsibility practices has become an urgent need for businesses to remain competitive in the market and to build a strong image of its brand in front of the public.

CSR practices performed by businesses enable it to impact the buying decisions of customers and can attract a large pool to customers towards its brand. Furthermore, when companies usually do storytelling to consumers regarding their efforts in giving profit share to certain worthy causes, consumers are ready to pay more than just the actual price. It is due to the fact that these contributions by the business are observed positively by the community that further increases their sales. The CSR practices positively appeal to publicity and win the loyalty of the customers. This helps in making robust relationships with them for a long period of time.

Taking an example of a firm namely McDonald initially offers nutritious information on its products’ wrapping for their client's welfare in the year 2006. Its practices in terms of social responsibility are regarding the moral values every day and taking activities wherever required. Due to its constant efforts in incorporating CSR practices, today, its brand is being valued and trusted by millions of people (Baskentli et al 2019).

Conclusion on Role of Corporate Social Responsibility

From the above report on the role of CSR practices in today's' world, it can be concluded that CSR practice is one that has become an urgent need for business organizations so that they can remain competitive in front of people. Furthermore, people in today’s modern world are much aware of their rights and conscious of the environmental problems that they think could be better solved by business organizations. Moreover, it can be concluded that numerous companies are performing these practices for many years and have built a strong image and reputation in society. Certain examples of such companies are McDonald's, Google, Target, Microsoft, Walt Disney, and more.

References for Role of Corporate Social Responsibility

Baskentli, S., Sen, S., Du, S., and Bhattacharya, C. B. 2019. Consumer reactions to corporate social responsibility: The role of CSR domains. Journal of Business Research95, pp.502-513.

Carroll, A.B. 2016. Carroll’s pyramid of CSR: taking another look. International Journal of Corporate Social Responsibility1(1), p.3.

Choi, S.B., Feng, Y., Liu, J. and Zhu, Q. 2019. Motivating corporate social responsibility practices under customer pressure among small-and-medium-sized suppliers in China: The role of dynamic capabilities. Corporate Social Responsibility and Environmental Management26(1), pp.213-226.

Ford, B. R., and Stohl, C. 2019. Does CSR Matter? A longitudinal analysis of product reviews for CSR-associated brands. Journal of Brand Management26(1), pp.60-70.

Hamidu, A., Haron, M., and Amran, A.2016. Exploring the drivers and nature of corporate social responsibility practice from an African perspective. International Review of Management and Marketing6(4), pp.696-703.

Księżak, P. 2016. The Benefits from CSR for a Company and Society. Journal of Corporate Responsibility and Leadership3(4), pp.53-65.

Sehgal, G., Kee, D.M.H., Low, A.R., Chin, Y.S., Woo, E.M.Y., Lee, P.F., and Almutairi, F. 2020. Corporate Social Responsibility: A Case Study of Microsoft Corporation. Asia Pacific Journal of Management and Education3(1), pp.63-71.

Shaukat, A., Qiu, Y. and Trojanowski, G. 2016. Board attributes, corporate social responsibility strategy, and corporate environmental and social performance. Journal of Business Ethics135(3), pp.569-585.

Suresh, J.A. 2020. Corporate social responsibility & corporate citizenship: a case study of the innovative practices by nippon paint, India. Studies in Indian Place Names40(29), pp.335-344.

Turner, M.R., McIntosh, T., Reid, S.W. and Buckley, M.R. 2019. Corporate implementation of socially controversial CSR initiatives: Implications for human resource management. Human Resource Management Review29(1), pp.125-136.

Yu, S., Zia-ud-Din, M., Dilawer, R., and Ban, X., 2019. Corporate Social Responsibility in Pakistan: A Legal Perspective with Reference to MNEs. J. Pol. & L.12, p.87.

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