Corporate Social Responsibility
The soul in the next economy forum presentation made it evident that achieving corporate social responsibly in a company can reap major benefits in terms of finances, more inspiring workplace and customer satisfaction. In the past, companies mistakenly thought that corporate social responsibility was corporate philanthropy but because of forums like the soul of the next economy, awareness about the real meaning of corporate social responsibility is increasing substantially. Corporate philanthropy is done with no expectation of financial gain but can lead to other gain by engaging employees and more recognition. Jorina Fontelera from Demand Media defines corporate social responsibility by comparing it to corporate philanthropy.
Much of those pressures are due to their unethical behaviour in developing countries, where their main operations take place. Though companies operate in host countries, their reputation extends across numerous national boundaries. The actions of multinational companies in a host country can cause significant loss of reputation in the developed world, where the general public have become more sensitive to environmental issues and social impact. The public have the power to boycott the goods and products of multinational corporations in cases of unethical behaviour where organisations are thought not to fulfil their social and environmental obligations. However, international reputation side effects are not the only reason behind the potential increased level of social and environmental responsibilities faced by multinational companies; there are many drivers for the correct implementation of CSR by business entities. However, for many companies, corporate reputation and brand image are the fundamental components of business success. Corporate Social Responsibility in developing countries represents the formal and informal ways in which multinational business enterprises contribute to improving the social, ethical and environmental conditions of the developing countries in which they operate. However, the rational approach to the CSR in the developing world is different from CSR in developed countries. For example, developing countries represent the ongoing growth of the economy; hence the most attractive growth markets for many foreign companies. They provide cheap labour, an absence of strong regulations and a rich availability of resources; all crucial concerns for multinational enterprises for conducting their businesses in developing world. It has been found that the public and the government are not as critical of unethical business practices within foreign companies. In addition, developing countries are where globalization, economic growth, investments and business activities are likely to have both positive and negative social and environmental impacts. Therefore, developing countries represent a different set of CSR agenda for multinational companies to those operating in the developed world.
In the global labor market, a firm is considered a strong employer brand if it is able to align its values and concerns with those of its employees. Employees tend to identify with companies that are highly regarded. Employer differentiation has become a formidable weapon in the structural ‘battle for talent’. Individuals are more willing to work for firms that have ‘conscience’. Individuals prefer working for organizations that are ready to make a difference in the lives of their stakeholders. A company can only build conscience by infusing its corporate values with CSR policies (Schoemaker and Nijhof, 2006, pp. 448-465). Consequently, firms have to align their values with their mission, as well as, vision. This enables firms to demonstrate corporate social responsibility in everything they do, thereby attracting the best talent and winning the support of the community. Second, CSR reduces employee turnover and recruitment costs. A recent study on corporate citizenship conducted in US revealed that 77% of employees consider a firm’s commitment to social issues when they (employees) decide on where to work (Garcia, Tabales and Herradon, 2008, pp. 27-44). Most employees consider the firm’s environmental, as well as, social reputation to be more important than salaries in their job search. The study also revealed that 70% of employees will resign if their employer does not engage in socially responsible behavior.
This in turn helps build up a company’s social capital and is likely to bring returns including financial returns.
Jones, P., Comfort, D., and Hillier, D., 2007. Corporate Social Responsibilit: A Case Study of the Top Ten Global Retailers. EuroMed Journal of Business, 2(1), pp. 23-35.
Josep, M., and Emmanuelle, D., 2011. CSR and Development: A Mining Company in Africa. Journal of Management Development, 30(10), pp. 955-967.
Kiran, R., and Sharma, A., 2011. Corporate Social Responsibility: A Corporate Strategy for New Buisiness Opportunity. Journal of International Business Ethics, 4(1), pp. 10-15.
Lantos, G., 2001. The Boundaries of Strategy Corporate Social Responsibility. Journal of Consumer Marketing, 18(7), pp. 595-672.
Lantos, G., 2002. The Ethicality of Altruistic Corporate Responsibility. Journal of Consumer Marketing, 19(3), pp. 205-232.