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Qualification Level Module Name Module Number Project Title Name - - PDF document
Qualification Level Module Name Module Number Project Title Name - - PDF document
Qualification Level Module Name Module Number Project Title Name of Candidate Candidate No. Submission Date Word Count i Table of Content List of Abbreviations
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List of Abbreviations
CSR: Corporate Social Responsibility
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1.0 Introduction
The objective of this report is to provide the reader with a broad understanding of Corporate Social Responsibility as an important management concept, and analyse its impact on
- rganisations and other stakeholders. Accordingly, Schwartz (2011, p.18) suggests that CSR is
the ‘duties and obligations of an organisation to carry out their business operations in a manner which promotes the interest of the society as well as the stakeholders of an organisation.’ The first section of this report will provide a brief introduction on the concept of CSR and the various definitions and frameworks pertaining to it. Secondly the importance of CSR, its advantages and disadvantages will be discussed. In addition, this section also analyses the impact of CSR on
- rganisations and other stakeholders. For example, Urip (2010, p.13) believes that CSR has the
ability to ‘optimise the core features of an economy through sustainable benefit to all’ which further implies the value created by CSR. Finally, the author’s views and analysis on the topic as well as any significant points discovered will be highlighted thus concluding the assignment.
2.0 Analysis 2.1 Interpretations of CSR
European Commission (2012) defines CSR as an organisation acting in a socially responsible manner towards its stakeholders by voluntarily adopting social and environmental concerns in their business operations. Similarly, Sims (2003, p.43) depicts that CSR is ‘the obligations made by organisations to uplift the quality of life of the workforce and their families as well as the community.” In addition, Kotler and Lee (2005, pp.3) illustrate that CSR is where an
- rganisation takes steps to uplift the standard of life of the community by adopting flexible
business practices and through the donation of corporate resources. These authors (Sims, 2003; Kotler and Lee, 2005) emphasise that CSR is about a business giving back to the society. Furthermore, the World Business Council, (2005, cited in Banerjee 2009, pp.16) suggests that CSR is when an organisation takes measures to improve the quality of life of the society and contribute towards sustainable economic development. However, Mullerat and Brennan (2011, pp.545) define CSR as ‘an organisation acting in an ethically or socially responsible manner towards its stakeholders’. Further, they infer that an organisation must take measures to improve the standards of living whilst conserving the profits of the organisation for its stakeholders. In
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addition, CSR is where an organisation exceeds expectations with regards to the obligations towards its stakeholders through regulation and corporate governance (Johnson and Scholes 2002, cited in Banerjee 2009). In contrast Carroll (1979, cited in Banerjee 2009, pp.16) suggests that CSR is the legal, economic, ethical and discretionary expectations of the organisation in the minds of the society. Additionally, she states that an organisation has an obligation to act in the best interests of the society. While a majority of academic researchers (European Commission, 2012; Sims 2003; Kotler and Lee, 2005) share the same opinion pertaining to CSR there are diverging opinions relating to the topic (Mullerat and Brennan, 2011; Johnson and Scholes, 2002). In the meantime, the following section will examine the pros and cons of CSR.
2.2 Pros and cons of CSR
Fernando (2011) states that the organisations in general execute CSR in a manner which aims to create a balance between fulfilling business objectives and satisfying the diverse needs of the
- community. In fact, it is said that an innovative CEO who understands the importance of CSR
will be able to utilise it in a manner which would enable the company to maximize profits and
- btain competitive advantages in the market place (Werther and Chandler 2010).
Keinert (2008) states that CSR aids in the expansion of a business towards new market segments and boost opportunities in forming new strategic alliances. Also, he states that CSR enables a business to benefit internally through enhanced labour relations and employee commitment which in turn generates better financial and strategic outcomes. Additionally, Smith (2005, cited in Okpara and Idowu, 2013) contends that a firm practicing CSR attracts more investors as these firms exhibit a sense of ethical guarantee. Further, he claims that investors prefer to engage in businesses that have excellent employee relations, environmental stewardship and corporate
- governance. Similarly, Mullerat (2010) CSR encourages a company’s innovation as it helps
comprehend the influence of business operations on the society and thus promotes the production
- f innovative and profitable products and services. However, he argues that although companies
who adopt CSR have enjoyed many benefits they have also suffered from drawbacks as well. For example, Mullerat (2010) argues that the main critic with regards to CSR is the time required to monitor and regulate the implementation of such practices. Similarly, Spence and Painter –
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Morland (2010) stress on the fact that organisations who practice CSR found time to be a major drawback when attempting to execute CSR policies efficiently and effectively. Furthermore, they suggest that although businesses portray the impression of ill- using time it was more of a case of them not having sufficient time to apply such policies within the organisation. Carroll and Buchholtz (2014) state that another downside faced by organisations involved in CSR is that they may be placed in a vulnerable position when competing in the global market. They claim that the increased cost of production caused by considering social and ecological factors would compel organisations to increase the prices of their products thus diminishing their competitiveness in the international market. However, they (Carroll and Buchholtz , 2014) argue that this criticism cannot be justified after taking into consideration the fact that CSR has become a worldwide phenomenon rather than only being practiced by a single firm.
2.3 Practical examples of CSR
Examples of organisations that have benefited from CSR include businesses like Brandix who have taken steps to become the most eco – friendly company in Sri Lanka (Brandix, 2009). For example, the establishment of the ‘Brandix eco – center’ in Seeduwa contributed greatly towards achieving these objectives. It helped to reduce Carbon emissions by eighty percent, Sulphur emissions by seventy one percent and reduced portable water usage by sixty three percent. As a result, Brandix was bestowed with the “Energy Globe Award” which is recognized worldwide and they were one of the few contenders to be labeled for the Energy Globe World Award in the ‘Air Category’. This has in turn uplifted the status of Brandix to a global level as well as helped increase their customer base considerably. Similarly, Disney (2010) has conducted its operations successfully whilst acting in a socially responsible manner towards the environment. For example, they have put into operation a number of measures aimed at safeguarding the environment such as providing financial assistance, conserving wildlife and creating awareness among the general public. As a result of Disney’s successful use of resources aimed at conserving the environment their corporate image has improved significantly. For this reason, the net sales of the company increased substantially in 2010, recording a twenty percent increase in net income whilst enjoying a five percent increase in revenue during the period under consideration.
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2.4 Author’s reviews and analysis
From the author’s point of view he feels that CSR is important for the growth and stability of an
- rganisation as well as an economy as suggested by (Urip, 2010). Similarly, Fernando (2011)
emphasises on the fact that organisations adopt CSR within their operations because they feel that is it the best way to survive and promote their company whilst satisfying a majority of their stakeholder objectives Secondly, the author also believes that adopting CSR is beneficial for an organisation. In addition, the arguments against CSR are limited in comparison to the numerous advantages pertaining to it. Accordingly, the advantages of CSR include maximising profits (Werther and Chandler, 2010), enabling companies to move into new market segments and boosting
- pportunities in forming new strategic alliances as emphasised by (Keinert, 2008). However, the
cons of CSR include lack of time (Mullerat, 2010) and vulnerability in the global market although the latter cannot be taken as a valid reason against CSR as highlighted by (Carroll and Buchholtz, 2014) Thirdly, the author from the information gathered above felt that the most successful companies in Sri Lanka as well as around the world are the organisations who have invested a great deal of time and money towards the implementation of CSR activities; for example, Walt Disney and
- Brandix. For example, Walt Disney have conducted their operations successfully whilst taking
measures to conserve the environment (Disney, 2010) Finally, the author believes that CSR with a genuine aim towards uplifting the standard of living
- f the society and not just for the sake of it. Meanwhile, the next and final section of this
assignment will examine and highlight any key points discovered and consequently conclude the assignment.
3.0 Conclusion
To provide a brief summary of the assignment the author spoke about how CSR has been interpreted by different authors and he mentions how different authors share the same opinions pertaining to CSR whilst there are contrasting opinions as well. Most authors (Sims, 2003; Kotler and Lee, 2005) feel that CSR is about giving back to the society whilst others (Mullerat and Brennan, 2011; Johnson and Scholes, 2002) felt that CSR should be carried out with a view on
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conserving profits as well as satisfying stakeholder objectives. In addition, the pros and cons of adopting CSR were compared and contrasted. It was interesting to note that advantages of practicing CSR outweighed the disadvantages relating to it. Furthermore, this assignment illustrated how Brandix and Walt Disney have benefitted significantly through the successful execution of CSR activities. Such organisations have devoted a great deal of resources towards ensuring that the environment is preserved for future generations (Brandix, 2009; Disney, 2010) Finally, the author shared his views and analysis on the information mentioned above. The author realised that CSR is a growing concept and that the adoption of CSR is crucial for the growth and sustainability of an organisation as well as the economy as suggested by (Urip, 2010)
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4.0 List of references
Amaeshi, K., Nnodin , P., and Osuji O. (2013) Corporate Social Responsibility, Entrepreneurship and Innovation. New York: Routledge Google books [Online]. Available at: https://books.google.lk/books?id=gOlt9WkR2_oC&printsec=frontcover&dq=corporate+social+r esponsibility&hl=en&sa=X&ei=v-AoVcC3HZCjugSPsIH4BA&redir_esc=y#v=onepage&q= corporate%20social%20responsibility&f=false (Accessed:13th April. 2015 ). Banerjee, S. (2009) Corporate Social Responsibility: The Good, The Bad and the Ugly: Cheltenham: Edward Elgar Publishing Google books [Online]. Available at: https://books.google.lk/books?id=nEupMc47JB8C&pg=PA16&dq=definitions+of+corporate+so cial+responsibility&hl=en&sa=X&ei=9wAqVZW_BIihugT-0oH4Cg&redir_esc=y#v=onepage &q=definitions%20of%20corporate%20social%20responsibility&f=false (Accessed: 13th Apr. 2015) Brandix..(2011) ‘Brandix Green Factory honoured with Energy Globe Award, Reach, 1 [Online]. Available at: http://www.brandix.lk/books/reach1101/2011_issue1.pdf (Accessed: 5th June 2015) Disney, W..(2010) ‘Nature Conservation’, 2010 Corporate Citizenship Report, [Online]. Available at: http://thewaltdisneycompany.com/sites/default/files/reports/Disney_2010_CC _Report.pdf (Accessed: 5th June 2015) Fernando, A. (2011). Business Environment: Pearson Education India Google books [Online]. Available at: https://books.google.lk/books?id=xaHonZv5dfIC&pg=PA376&dq=advantages+of+csr&hl=en&s a=X&ei=Kp1yVZSGJ86WuATtnauIAw&ved=0CFEQ6AEwCA#v=onepage&q=advantages%2 0of%20csr&f=false (Accessed: 25th May 2015) Keinert, C. (2008). Corporate social responsibility as an international strategy. Heidelberg: Physica-Verlag. Springer Science & Business Media Google books [Online]. Available at: https://books.google.lk/books?id=de0o4XkPIYYC&pg=PA89&dq=advantages+of+csr&hl=en& sa=X&ei=tZVVVc-dKMipuwTU3oHACw&redir_esc=y#v=onepage&q=advantages%20of% 20csr&f=false (Accessed 14th Apr. 2015) Mullerat, R. (2010) International Corporate Social Responsibility: The role of Corporations in the Economic Order of the 21st Century: Kluwer LawGoogle books [Online]. Available at:
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Internationalhttps://books.google.lk/books?id=POKTUI3GyZoC&pg=PA14&dq=definition+CS R&hl=en&sa=X&ei=e0MSVYHyD4zIuATvkIHwCg&ved=0CCEQ6AEwAQ#v=onepage&q=d efinition%20CSR&f=false(Accessed: 13th March 2015) Mullerat, R. and Brennan D. (2011) Corporate Social Responsibility: The Corporate Governance of the 21st Century. Revised edition: Kluwer Law International Google books [Online]. Available at: https://books.google.lk/books?id=xvqvrYMTUg0C&pg=PA520&dq=advantages+of+csr&hl =en&sa=X&ei=jhRsVaftJdCRuQTI7IGAAw&ved=0CCAQ6AEwATgK#v=onepage&q=advant ages%20of%20csr&f=false (Accessed: 1st June 2015) Okpara, J.and Idowu, S. (2013) Corporate Social Responsibility: Challenges, Opportunities and Strategies for 21st Century Leaders: Springer Science & Business Media Google books [Online]. Available at: https://books.google.lk/books?id=AgEifBoKFPEC&dq=whats+CSR&source=gbs_navlinks_s (Accessed: 5th April 2015) Schwartz, M. (2011) Corporate Social Responsibility: An Ethical Approach: Broadview Press Google books [Online]. Available at: https://books.google.lk/books?id=guf4qEFG6O0C&dq=Corporate+ Soc ial+Responsibility:+An+Ethical+Approach&source=gbs_navlinks_s (Accessed: 29th March 2015) Sims, R. (2003) Ethics and Corporate Social Responsibility: Why Giants Fall: Greenwood Publishing Group Google books [Online]. Available at: https://books.google.lk/books?id=qUNK dqMC2 cC&pg=PA43&dq=definition+of+CSR&hl=en&sa=X&ei=PwEnVfXZEcKzuASC2IGQDQ&ve d=0CBwQ6AEwAA#v=onepage&q=definition%20of%20CSR&f=false(Accessed: 29th March 2015) Singh, S. (2010) Handbook Of Business Practices And Growth In Emerging Markets. Hackensack, NJ: World Scientific, 2010. Print Google books [Online]. Available at: https://books.google.lk/books?id=J8cOIdCGStEC&pg=PA122&dq=disadvantages+of+csr&hl=e
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n&sa=X&ei=XGxoVbaKEYu2uQS8uYOwAw&ved=0CEMQ6AEwBw#v=onepage&q=disadva ntages%20of%20csr&f=false (Accessed: 29th May, 2015) Spence, L. & Painter- Morland, M. (2010) Ethics In Small And Medium Sized Enterprises. Dordrecht: Springer Science and Business Media, 2010. Print Google books [Online]. Available at: https://books.google.lk/books?id=sQWw6TQMiJAC&pg=PA202&dq=disadvantages+of+csr&hl =en&sa=X&ei=33JoVYfJHdCSuAT_wYOQCQ&ved=0CB0Q6AEwAA#v=onepage&q=disadv antages%20of%20csr&f=false (Accessed: 15th June 2015) Urip, S. (2010) CSR Strategies: Corporate Social Responsibility for a Competitive Edge in Emerging Markets: John Wiley and Sons Google books [Online]. Available at: https://books.google.lk/book s?id= 54 0rR T4AFQC&dq=)+CSR+Strategies:+Corporate+Social+Responsibility+for+a+C
- mpetitive+Edge+in+Emerging+Markets:&source=gbs_navlinks_s (Accessed: 28th March 2015)