Corporate social responsibility
Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation[1] which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices.
[9] In part, these benefits accrue by increasing positive public relations and high ethical standards to reduce business and legal risk by taking responsibility for corporate actions.
Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.
Donations are made in areas such as the arts, education, housing, health, social welfare, and the environment, among others, but excluding political contributions and commercial event sponsorship.
[44] Their model sought to fill the gap between corporate social responsibility definitions and strategy, which the authors perceived to be an issue, and to provide guidance to managers on connecting businesses with ethically-aware consumers.
[45][46] An approach described by Tóth Gergely and published by the Hungarian Association for Environmentally Aware Management (KÖVET) refers to "Deep CSR" and the role of a "Truly Responsible Enterprise".
[80] Common CSR actions include:[81] The term "social license" was introduced in 1997 and has since been applied in multiple resource extraction industries to describe changes in company-community interactions.
[95] As stated in Enduring value: the Australian minerals industry framework for sustainable development the concept of the 'social license to operate', then defined simply as obtaining and maintaining broad community support and acceptance.
Gunningham et al.[92] stated that meeting and exceeding regulations to build reputational capital is economically vital, saying: "in certain circumstances, [natural resource-based industries] cannot afford to do otherwise".
Based on the Requisite Organization, to achieve this goal, a company needs to: A positive relationship has been shown to exist between CSR and a firm's corporate financial performance.
[112] The term was coined by John Elkington in 1994[109] who re-evaluated it in 2018 and called for more urgent action toward sustainability [113] A CSR program can be an aid to recruitment and retention,[114][115] particularly within the competitive graduate student market.
[122] High levels of CSR compliance within supply chains (including Tier 1 and beyond) will also help reduce vulnerabilities and eliminate environmental, social, and economic risks through implementing a sustainability-focused procurement strategy.
[128] Others use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions as another form of advertising.
The researchers assert that programs in this stage strive to deliver social or environmental benefits to support a company's operation across the value chain by improving efficiency.
For example, a fashion merchandiser may find value in an overseas manufacturer that uses CSR to establish a positive image and to reduce the risks of bad publicity from uncovered misbehavior.
[135] Furthermore, CSR supply chain imperatives can leverage their responsible commitment to forge robust and lasting relationships with important stakeholders and positively influence the decision-making of consumers, partners, investors, and talent.
Milton Friedman and others argued that a corporation's purpose is to maximize returns to its shareholders and that obeying the laws of the jurisdictions within which it operates constitutes socially responsible behavior.
[145] However, critics claim that effective CSR must be voluntary as mandatory social responsibility programs regulated by the government interferes with people's plans and preferences, distorts the allocation of resources, and increases the likelihood of irresponsible decisions.
[155] Aguinis and Glavas conducted a comprehensive review of CSR literature, covering 700 academic sources from numerous fields, including organizational behavior, corporate strategy, marketing, and HRM.
Stanley B. Prusiner, who discovered the protein responsible for Creutzfeldt–Jakob disease (CJD) and won the 1997 Nobel Prize in Medicine, thanked the tobacco company RJ Reynolds for their crucial support.
Research has also found that corporate social marketing, a form of CSR promoting societal good, is being used to direct criticism away from the damaging practices of the alcohol industry.
In this study, Mocan, Draghici, Ivascu, and Turi examined the correlation between CSR policies and value creation/financial performance in the banking industry specifically and found that various benefits include greater economic efficiency, improved company reputation, and employee loyalty, better communication streamline between the industry and individuals, and the opportunity to attract new opportunities (i.e. attract new investments, or remain competitive) and improve organizational commitment.
They further claim without source that "There is no form of market failure, however egregious, which is not eventually made worse by the political interventions intended to fix it", and conclude "there is no need for further research on regulation in the name of social responsibility.
[79] Other examples include the lead paint used by toymaker Mattel, which required the recall of millions of toys and caused the company to initiate new risk management and quality control processes.
The company recalled all apple or carrot juice products and introduced a new process called "flash pasteurization", as well as maintaining lines of communication constantly open with customers.
[191]: 6 Actions planned under the 2011–2014 agenda were aimed at: Subsequently, the Commission published a staff working document in March 2019 that examined the progress in implementing CSR/RBC as well as business and human rights.
Martinuzzi et al. described the terms, writing that human responsibility is "the company deals with suppliers who adhere to principles of natural and good breeding and farming of animals, and also maintains fair and positive working conditions and workplace environments for their employees.
RI monitors social responsibility reputations by focusing on the perception of consumers regarding company governance,[203] positive impact on the community and society, and treatment of the workforce.
Corporate social responsibility is defined as the ethos and practice of discovering, invoking, infusing, evoking, and radiating the human values of 'righteousness' (dharma) and 'love' (Prema) in an organisation's interactions with its stakeholders.
[214] Stakeholders, in this definition, refers to the organisation's customers, employees, shareholders, society, natural environment, business associates, regulatory agencies, future generations, etc.
