Essay on "Managing Corporate Social Responsibility and Sustainable Development"

Essay 10 pages (3088 words) Sources: 8

[EXCERPT] . . . .

Managing Corporate Social Responsibility ND Sustainable Development

Managing Corporate Social Responsibility and Sustainable Development

Corporate Social Responsibility (CSR) is the program or initiative taken by a company to foster community growth and development and to protect the environment for posterity. These programs have to be taken voluntarily by the companies because the role of the Government in the business sector is shrinking due to financial and political problems. At the same time, the number of people who need help is ever-increasing and voluntary actions by the companies is the only solution to eradicate the numerous social ills facing out society today.

How does CSR work in companies?

Benefits of CSR

Shrinking role of the Government

Effects of the shrinking role of government on the corporate social responsibility of companies

Sustainability Development

Problems that come with CSR

Examples of CSR and Sustainability Development

Recommendation

Conclusion

References

Introduction

Corporate Social Responsibility is one of the most important initiatives taken by every company to boost its image in the eyes of its customers, investors, shareholders and the general public. It improves the standing of the company in the business circles and provides innumerable benefits to the company. Kotler and Lee (2005, p.3) have given the most appropriate definition for corporate social responsibility when they say, "Corporate social responsibility is a commitment to improve community well-being through discretionary business practices and contribution of corporate resources." The most important element in this definition is the word discretionary that simply means that these initiatives are taken by the company voluntarily and out of their own free will instead of being mandated by any law.

How does CSR work in companies?

Numerous companies in the U.S. As well as in other parts of the world contribute to environmental protection and community development in many ways. Some common projects that they support include AIDS awareness, cancer research, safety programs to educate drivers on the road, education, food and shelter for the poor and the homeless, low-interest loans for economically challenged students, awareness about the environment, safe disposal of harmful chemicals and products, anti-discrimination, employment and so on. A lot of these initiatives come in the form of donations through cash or kind though some others come in the form of organizing events or providing the infrastructure and resources required to ensure the success of community-based programs.

The company's first line of contribution is towards a societal ill that has arisen due to the company's action. A common example is the environmental clean-up initiatives taken by companies that pollute rivers or air through their manufacturing and production processes. The need to provide solution to a problem that was created by the company is a strong motivation. Once this is taken care of, the company moves towards other problems provided they have the resources and the willingness to go on. Other actions revolve around providing a better health for its employees and to the community in which the company operates so that it can reach out to people who have been a part of the company for many years.

In general, contributions in the form of cash come from a separate foundation that is funded and administered by the company for easy accounting. It is also a good way to separate business from funding for community and environment. The idea of establishing a foundation also makes it easy when the company wants to partner with other companies or government agencies for implementing a community program.

Though some people consider political campaigning as a part of corporate social responsibility, this is not true because it does not fit the core idea of CSR. "On Jan. 21, 2010, the United States Supreme Court ruled 5-4 to overturn restrictions on corporate and union campaign contributions, effectively transforming the landscape of political financing. The majority, generally viewed to be the conservative wing of the court, found that restrictions on such expenditures are invalid." (United States Country Review, 2011, p.204). This is another reason why political contributions are not a part of CSR.

Benefits of CSR

Every company stands to gain immensely by following a well-thought out corporate social responsibility plan. Firstly, the biggest gain for a company is a boost to its image in the eyes of the public. There will be an increased awareness of the products and services offered by the company and this can increase the sales of the company tremendously. Another advantage is customer loyalty. When people in a community see the initiatives taken by the company, they are subconsciously driven to continue buying these products and services and this can lead to a committed customer base for the company.

A company that makes a difference to the lives of others in a community will also be in a better position to attract the best talent. In this age of globalization and outsourcing, people are willing to transcend geographical boundaries to find the work of their choice. Companies that have a sound CSR policy can attract the right talent because of its brand image, customer loyalty and above everything its ever-increasing profit margin. A talented and diverse workforce will lead to higher productivity and this will further increase the company's profitability.

A company engaging in pro-active CSR initiatives will be well-recognized by shareholders, investors and other who have a stake in the company. It can have an easier access to capital because of its outstanding image and brand loyalty and all this means a sustained high growth period for the company.

The CSR initiatives of the company will also benefit the community and the overall environment. It can result in a greater use of bio-degradable products and renewable resources and also a higher chance to recycle existing products into newer ones. This is better for the environment in every sense and can lead to a better and safer place for everyone to live. Community also benefits due to increased charitable contributions from the business sector. The number of homeless, unemployed, poor and uneducated people will diminish and this can create vibrant and safe communities that can in turn give back to the company in many ways. Overall, it is a win-win situation for everyone involved -- company, community and the environment. These are some of the reasons for a company to have a sound and practical CSR program.

Shrinking role of the Government

The discretionary choice to use corporate social responsibility to improve the community and the environment assumes significant importance in the wake of the shrinking role of the Government in the business sector. In fact, this is one of the current issues facing the implementation of corporate social responsibility today. (BSD Global, 2011). Most Governments today including local, state and federal are facing severe financial crunch and they are looking to cut back on their resources. "Deep spending cuts by state and local governments pose a growing threat to an economy that is already grappling with high unemployment, depressed home prices and the surging cost of oil. Lawmakers at state capitols and city halls are slashing jobs and programs, arguing that some pain now is better than a lot more later. But the cuts are coming at a price -- weaker growth at the national level." (Associated Press, 2011).

These cuts are being implemented at all levels of Government and this has a profound impact on the control of the government in the business sector. When the government cuts spending, it has to lay off existing workers and these positions remain vacant. Unfortunately, the amount of resources available for the government is diminished and they no longer have the money or the man-power to implement public-private partnerships for environment and community growth and development. As a result, the private sector, which comprises of the numerous companies in the U.S., have to implement such programs out of their free will.

Another reason is the lack of trust in legislation and the U.S. Congress. The current bipartisan government is a good example of how bills get stalled and there is stale-mate in the U.S. Congress. This reduced amount of legislation from the Congress coupled with problems with implementation also contribute to the reduced role of government interference in the business sector. All this simply means that the corporates have to take their own initiative voluntarily without any kind of pressure or support from the government.

Effects of the shrinking role of government on the corporate social responsibility of companies

The shrinking role of the Government has a positive impact on the corporate social responsibility of companies because they strive to do more voluntarily rather than through a law. It also gives them the flexibility to choose the projects that is related to their company and can have an strong positive influence in the sales of the company. This is probably why the contributions of companies towards community building and environment has increased during the last ten years. "According to GivingUSA, charitable giving by for-profit corporations has risen from an estimated $9.6 billion in 1999 to $12.19 billion in 2002. Cone/Roper's… READ MORE

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