BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY
Table of Contents
I. Introduction
II. Corporate Social Responsibility (CSR)
III. Positive Effects of CSR
IV. Need for Corporate Disclosure
V. Conclusion
VI. References
The realm of business has drastically evolved nowadays. Traditionally, seeking profit from the market was one of the primary goals of the company. That is to say the ends justify the means of taking it. What hasn’t changed is the value of the consumers and primary customers of the company. Companies still regard the customers highly. Thus, acquiring profit has been set aside as a mere component of organizations to grow. Companies now need to acquire the favour of customers: both existing and potential customers. Companies that intend to be at the top of their respective industries, or even survive, need the favour of the public. They could do this by presenting a positive image through marketing or they could touch a more profound aspect of their target market particularly those applicable to the morals and principles of the public. This need spawned what is termed as corporate social responsibility (CSR). It is an attempt of the company to address the more pressing issues regarding their role in society in general. The following discussion will argue in favour of the implementation of corporate social responsibilities among organisations.
II. Corporate Social Responsibility (CSR)
Corporate social responsibility (CSR) has absolutely been an element of contemporary business culture. Several studies have been published in an effort to keep a record of the needs held by applying such in a company. In the article of (2003, ) he claimed that the deficiency of such accountability between organisations have activated humiliations and even collapse of large corporations. Errors in market trading and even shams on manners of disposing the company’s waste seem to be among the most argued themes in the existing articles on CSR. (2003) mentioned the violation of this social responsibility among companies as a “business ethic missteps.”() This symbolizes an oversight of a company in bearing in mind the existing principles and morals in a specific society. In this framework, (2003) presented a pair of wide-ranging claims. He indicated that society has provided ardent attention on matters of corporate social responsibility in the last four decades. Just as he similarly claimed that having such an interest depended on such incidences, banners concerning these violations have the propensity to add together as newsworthy scandals. ()
As measured up to the business environment in the earlier periods of the 1900s, the stakeholders seem to be more caught up in the operations of an organization. Earlier studies on corporate social responsibility pointed it out as a tool to combat the “social cost.” ( and , 1995, ) In the said study, they established a positive correlation involving social responsibility and financial performance. Although it is not perceived as an unvarying effect, majority of the studied corporations are inclined to exhibit such findings.
III. Positive Effects of CSRThe disposition of the critics of CSR in the conference indicates primarily that employing CSR is a total waste of time and resources. However, there are academics that seen it in another light. It does have a positive effect on the company. Several studies have been made demonstrating the consequence of CSR on the buying behaviour of the target market of the company. A fresh addition is the work of and (2001, ). In their claims, they maintained that for buying behaviour and CSR to have a positive connection, a number of criteria have to be satisfied. The consumers have to grown to be conscious of the “level of social responsibility” implemented by the company. () This denotes that the informing the public what the corporation is doing include of a preponderance of how it could optimistically influence the purchasing behaviour of the public. Efficient marketing and advertising is thus important in this instant. The use of mass media or any other implements would be the solution in educating the public of their activities.
As stated in the earlier parts of the paper, the work of (2003, ) noted that financial performance does have a positive association with the organisation’s CSR. Conversely, current articles point out that the trouble with this assertion is that the return of investment (ROI) established on these activities is purely characterized in terms of social ROI. (, 2005, ) This denotes that in spite of how efficient or impressive the scheme a company creates, instant financial proceeds may not be readily seen. In line with the said study, intrinsically there are quite a few factors that motivate companies in applying CSR programmes. These consist of “managing risk and reputation; protecting human capital assets; responding to consumer demands; and avoiding regulation.” (, 2005, ) Seen at this context, the performance of such agendas is undeniably profitable. It stands for an investment praiseworthy of the risk.
Moreover, the CSR does have an implication on the general performance of the company. It is thus expected that it would have an encouraging effect on the market share of the organisation. Even in earlier studies on social responsibility, this has been perceived as reality. ( and , 1993, ) In the said study, it is seen that managers observe the functioning of CSR as a basic ends supportive of their interests on top of the company’s. ( and , 1993, ) This signifies that a socially responsible corporation would have a superior capability to get hold of a much larger market share than those who are supposed to be otherwise.
IV. Need for Corporate DisclosureHowever, it must be noted that companies have to regard shareholder primacy’s value. Traditionally, the concept of shareholder primacy has been measured as the primary authorization of the directors and senior officers of a corporation in the circumstance of corporate law. In particular, all the “energies” of the ( , 1995,) board have to be point to the progress of the shareholders on the whole. This claim likewise claims the fiduciary obligation of the board of directors to make the executive actions within the company known to the corporation and its shareholder. ()
Based on the said argumenge (2002), the principles presented by traditional corporate law may possibly be progressively becoming obsolete and impractical in the current setting. The value of the shareholders has considerably seen as diminishing by the more contemporary scholars of corporate la(w., 2000) Possibly, the delegation of the decision making power of these shareholders are given to the board of directors such that learned decisions are carried out. . Though it appears that ’s (2002) claim is rather in effect already, the actions of these directors should constantly be subjected to the knowledge of the shareholders. This accountability on the part of the directors is to be discussed on the subsequent part, specifically the principle of corporate disclosure.
V. ConclusionThe commercial environment held by the organizations has changed considerably. However, one must recognise that the competitive nature of the players in every industry has considerably changed as well. The focus has been pointed towards the consumers. Essentially, this is what the CSRs actually intend to do, to create an image for the consumers that companies are doing its share to establish “sustainable development.” As (2005, ) this trend has triggered companies and commercial organisations to make CSR programmes based on economic decisions. Improvements that these programmes tend to create manifests only in areas where actual profit could be made. That seems to be the reality. There will be less people thinking of the major inconveniences provided by the company like a more congested neighbourhood. As long as companies have an arsenal of marketing tools to use, they could always find a way to spin this on their favour.
VI. References
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