Research Paper on "Relationship Between Stakeholders and Corporations and CSR Corporate Social Responsibility"

Research Paper 15 pages (4990 words) Sources: 15

[EXCERPT] . . . .

Business Theory

Relationship between Stakeholders, Corporations and Corporate Social Responsibility

Businesses around the world are under pressure with a new function, which is to meet the needs of the present generation without compromising the capability of the next generations to meet their own needs. Companies are being called upon to take accountability for the ways their operations impact societies and the natural environment. They are also being asked to apply sustainability philosophies to the manners in which they carry out their business. Sustainability refers to a company's actions, usually considered charitable, that show the insertion of social and environmental concerns in business opera-tions and in associations with stakeholders (D'Amato, Henderson & Florence, 2009).

It is no longer suitable for a corporation to experience financial prosperity in isolation from those things impacted by its actions. A company must now center its attention on both increasing its bottom line and being a good corporate citizen. Keeping on top of global trends and remaining dedicated to financial obligations to deliver both private and public benefits have forced businesses to redesign their frameworks, rules, and business models (D'Amato, Henderson & Florence, 2009). In order to understand and improve current efforts, the most socially accountable organi-zations continue to amend their short- and long-term plans, to stay ahead of rapidly changing challenges.

Additionally, a bleak and complex shift has taken place in how companies must comprehend themselves in relation to a wide assortment of both local and global stakeholders. The quality of associations that a company has with its workers and other key stakeholders, such as customers, investors, suppli-ers, public and governmental officials, activists, and communities, is vital to its success, as is its ability to respond to competitive conditions and corpo-rate social responsibility (CSR) (D'Amato, Henderson & Florence, 2009). These major alterations necessitate national and global companies to move toward their business in terms of sustainable growth, and both individual and organizational leadership plays a key role in this alteration.

Organizations have developed an assortment of approaches for dealing with this junction of societal needs, the natural environment, and corresponding business essentials (D'Amato, Henderson & Florence, 2009). Companies can also be measured on a developmen-tal range with respect to how intensely and how well they are incorporating social responsibility approaches into both strategy and daily operations world-wide. At one end of the gamut are companies that do not recognize any accountability to society and the environment. And on the other end of the scale are those companies that view their operations as having a significant impact as well as dependence on society at the economic, social, and ecological levels, therefore ensuing in a sense of responsibility beyond the customary boundaries of the company. Most companies can be placed somewhere in the middle (Waller & Conaway, 2011).

According to Schwab (2008) many business leaders today think it critical to connect with shareholders, the communities in which their companies function, and others affected by and interested in what they do. The varied activities are needed to respond to these expanded duties are widely known as corporate social responsibility. It includes a host of concepts and practices, including the requirement for sufficient corporate governance structures, the execution of workplace safety standards, the implementation of environmentally sustainable procedures, and philanthropy.

Literature Review

Corporate responsibility or sustainability is consequently an important fea-ture of the business and society literature, addressing themes of business ethics, corporate social performance, global corporate citizenship, and stakeholder management. Corporate Social Responsibility is about how companies administer the business processes to create an overall positive impact on society. In order for a company to assess their corporate social responsibility they must look at two aspects of their operations. The first is the superiority of their management, both in terms of people and procedures. The second is the nature of, and quantity of their impact on society in a variety of areas (Baker, 2004).

For CSR to be established by a conscientious business person, it should be structured in such a way that the total ranges of business responsibilities are looked at. It has been suggested that there are four kinds of social responsibilities that comprise total CSR: economic, legal, ethical and philanthropic (Carroll, 1991). In order to be sure all of these kinds of responsibilities have always existed to some degree but it has only been in recent years that ethical and philanthropic purposes have taken an important place.

In the past, companies were created as financial units intended to provide goods and services to members of the community. The profit purpose was established as the main incentive for free enterprise (Carroll, 1991). Previous to anything else, business organization was the basic financial unit in society. As such, its main role was to produce goods and services that customers needed and wanted and to make an acceptable profit in the process. At some point the idea of the income motive got altered into a notion of maximum profits, and this has been a continuing value ever since. All other business responsibilities appear to be predicated upon the financial accountability of the company, because without it the others become unsettled deliberations.

Society has not only endorsed business to function according to the profit motive but they are also expected to obey with the laws and regulations dispersed by federal, state, and local governments as the ground rules under which business must function (Carroll, 1991). As a partial completion of the social contract between business and society firms are expected to chase their financial missions within the structure of the law. Legal responsibilities reflect a view of codified ethics in the sense that they demonstrate basic notions of fair operations as established by lawmakers.

According to Carroll (1991) even though financial and legal responsibilities demonstrate ethical norms about justice and fairness, ethical responsibilities embrace those activities and practices that are expected or forbidden by societal members even though they are not set down by law. Ethical responsibilities represent those values, norms, or prospects that reflect a concern for what customers, workers, shareholders, and the community observe as fair, just, or in keeping with the respect or protection of stakeholders' ethical privileges.

According to Carroll (1991) philanthropy entails those corporate actions that are in reply to society's expectation that businesses be good corporate citizens. This includes energetically engaging in acts or programs to promote human welfare or goodwill. The distinctive feature between philanthropy and ethical responsibilities is that the former are not expected in an ethical or moral sense (Jo & Harjoto, 2011). Communities want companies to give their money, facilities, and worker time to humanitarian programs or purposes, but they do not look upon the company as unethical if they do not supply the desired level. Consequently, philanthropy is more voluntary on the part of businesses even though there is forever the societal anticipation that businesses provide it (Carroll, 1991).

Nowadays outside stakeholders are taking a growing interest in the activity of the company. Most look at what the company has in fact done, good or bad, in terms of its products and services, in terms of its impact on the environment and on local communities, or in how it treats and develops its labor force. According to Baker (2004) out of the assorted stakeholders, it is monetary analysts who are mostly focused on quality of management as a pointer of likely future performance.

The dispute of what responsibilities and too whom that a company has covers many different aspects. Some argue that any such duties are limited just to abiding by the law and earning income for shareholders. Others argue, though, that they also have ethical responsibilities towards the larger community, responsibilities similar to that of individual people. Some argue that the purpose of an efficient company may be to make profits for its shareholders, but simply in doing that, provided it faces competition in its markets, behaves truthfully and obeys the law, the company, without even trying, is doing good things (Cline, 2005). This last one is a remarkably narrow outlook of ethics and ethical responsibilities. Essentially it is saying that as long as a company is earning an income, they have no ethical accountability to do anything not commanded by the law. This in the end supports the passing of more and more laws, something that is not usually desirable. Law and ethics are separate things and should be treated as such. Sometimes people are ethically bound to do things that the law doesn't require while other times that are required by law to do things they find ethically doubtful. There is no good reason to think that companies, already treated by the law as persons in many regards, are any dissimilar.

Over the years companies have looked at business ethics in a variety of ways, including the implementation of compliance programs and managers, the addition of board-level ethics committees, the development of codes of conduct, the training and distribution of values statements, the hiring of corporate social responsibility managers and training programs of all types… READ MORE

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