CSR obligation surpasses what the law requires a firm to do. It is the responsibility an organization takes upon itself to better the social lives of both the workforce and society. Currently, this is a worldwide trend.
This is because of the pressure from society and governments for organizations to feel more responsible for the sources of their resources. The members of society are also more sophisticated than sometime back. The competitive environment is also cutthroat with more companies joining the framework (Capon, 2008).
Importance of Business Social Responsibility in the Society
A better society creates a better environment for doing business. Business will, therefore, gain e.g. by contributing to the societies efforts to increase the level of security, business will also be protecting its own plant. In today’s business world, businesses are seeking to tailor their goods according to the taste and preferences of the end users who are a big part of society.
The more business is involved with society the more it is going to become aware of its end user’s needs. Consequently, the more it is going to tailor its products to fit their various needs. Good public image; social responsibility shows that the organisation cares about society and not just their money. As a result, society wants to keep doing business with the organisation (Carnal, 2007).
Impacts of Business Social and Ethical Responsibility in the Society
Social responsibility has greatly affected society in different areas of life. Among the greatest beneficiaries is the environment. As more and more organisations take up the challenge of conserving the environment, it is becoming a necessity for the whole of the business fraternity in the world to engage in environmental conservation activities.
Consequently, the world’s society is gaining from these efforts, for instance increase in rainfall around the world, reduced global warming etc. The funds that come from Corporate Social Responsibility are changing lives in the society. Organisations are reaching out around the globe (e.g. third world countries) and transforming the lives of poor members of society (Slide Share, 2009).
What do managers across the globe say about the issue of social responsibility? Well, the opinion is diverse. It depends upon factors such as the industry, the nature of business and the target market. There are those against and those for corporate social responsibility. This part discusses the reasons behind this divide.
Managers against CSR
Studies show there is a direct correlation between Corporate Social Responsibility and profit maximization. Maximizing profit is the main goal of any organization. However, some organizations argue that Corporate Social Responsibility beats the whole logic of this objective.
Extensively, therefore, it dilutes the purpose of doing business. For example, if a company offers a basic product, whose main source is not the environment; the reason to give back to society negates reasons for doing business (Capon, 2008).
Another school of thought plays the costs card to justify reasons not to engage in Corporate Responsibility. Truth is it is an expensive affair. Most companies report billions used in Corporate Responsibility. Eventually, opponents argue that a company ends up yielding too much power over the society. This is because psychologically they feel the responsibility to buy products from that company.
Another reason is that a company that does this without a clear intention to benefit society (i.e. takes it as a responsibility), may end up employing unorthodox means to ensure that it recovers the costs associated with the practice. For example, a company may lay off workers. It is also illogical to practice CSR in an environment that does not necessarily require you to as noted by (Capon, 2008).
Managers for Corporate Responsibility
As noted earlier, studies show a relationship exists between profit maximization and social responsibility. However, this is realizable only in the end. This is because the society associates with the company as it continues to practice this responsibility.
It is also widely known that societies across the board expect some return from constantly doing business with a certain company, hence, the need to do it to quench that expectation.
Some managers further argue that in an environment where the government has too much regulations, CSR can help mitigate these regulations or to restrict imposition of new ones. Hence, it acts as a buffer zone but only in those economies where governments care about its citizens (Capon, 2008).
With power comes responsibility. Powerful organizations are the most responsible. CSR acts as a way to help companies to balance these two. Therefore, it does not matter how much power a company has over the society, as long as it engages in CSR its power spreads out.
Managers also face the need to follow the interests of its stockholders. They may want a company to engage in such societal causes and managers do not have a choice but to oblige. Lastly, managers argue that CSR guarantees an organization has continued hold to resources of interest (Slide Share, 2009).
Capon, C. (2008). Understanding Strategic Management. New York: FT/Prentice Hall.
Carnal, C. (2007). Managing Change in Organizations. Essex: Pearson Education.
Slide Share. (2009). Five Social Responsibility and Managerial Ethics. Retrieved from https://www.slideshare.net/