Corporate Social Responsibility Essay Example

Introduction

Corporate social responsibility is one of the tools that aid in gauging the attitudes of a company towards stakeholders (Jenkins &Yakovleva, 2005). It is for this reason that its understanding aids in understanding the involved companies' willingness to incorporate the society's needs into decision-making involving social and environmental concerns. CSR expands this notion not only to the community but also towards other stakeholders including customers, employees, affected the population, and the general public. As discussed above, most companies take liberty with the scope of CSR they are willing to undertake.

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Corporate social responsibility is one of the tools that aid in gauging the attitudes of a company towards stakeholders (Jenkins &Yakovleva, 2005). It is for this reason that its understanding aids in understanding the involved companies' willingness to incorporate the society's needs into decision-making involving social and environmental concerns. CSR expands this notion not only to the community but also towards other stakeholders including customers, employees, affected the population, and the general public. As discussed above, most companies take liberty with the scope of CSR they are willing to undertake.Businesses undertake two approaches to adopting CSR in their policies. The first approach involves a neo-classical outlook whereby the company takes only those social responsibilities that aid their businesses by providing more resources and reduction or payment of taxes (Moir, 2001). Arguably, this mindset views CSR as a tool to make more money for the stakeholders. The second approach is one that follows a behavioral pattern theory; companies that support this outlook examines the non-economic and political influences on the managerial behavior in regards to which strategy gets adopted (Moir, 2001). Additionally, it is a realization by the business that there are factors that are beyond their control, and internal regulations and decisions are made to fulfill the requirements while adopting their business model around a CSR theory that best suits those external factors. The justification for why businesses should engage in corporate social responsibilities is twofold. Firstly, some people hold the view that since a company is a personified entity that lives, interact, and share resources with the societies, there is an ethical or moral imperative for it to share the resources in aiding in solving the societal problems whether or not it participated in creating them in the first place (Moir, 2001). Additionally, proponents of CSR also point out the fact that such activities are beneficial to the business itself in the form of reputation, investment into more efficient system meaning more savings, and employee retention and loyalty (Morsing & Schultz, 2006; Jenkins & Yakovleva, 2006). It is therefore imperative for companies to engage in CSR as a means to strengthen their social responsibilities and presence while addressing the sustainability concerns for a viable co-existence and integration into the society.

In the discussion below, an examination into how businesses adopt CSR into their reports, and an explanation given on the underlying theories; moreover, an exploration into how most companies respond corporate social responsibilities regarding external influences will occur.

CSR Relationship with Stakeholder's and Environmental Disclosure in the Service Industry

The embodiment of a businesses' role in the society in regards to the legal, economic, philanthropic, and ethical responsibilities in environmental disclosure and especially regarding the internal and external stakeholders has in recent years experienced tremendous growth (Kolk, 2008). Arguably, this has taken the form of how the companies take into account the CSR and the effect that disclosure has on the stakeholder. In this discussion, the extent to which reporting and auditing impact the notion of transparency and accountability will receive attention, and the impact this has on the stakeholder's concern.

A study by Yeonsoo Kim (2013) found out that stakeholders generally valued transparency in corporations geared towards ethics, philanthropist activities, and economic responsibility; however, the main attraction towards the stakeholders lay not in communicating the successes but the underlying intentions that spurred the various CSR actions.

One of the factors that affect the outcome of disclosure towards the investors involves the correlation between adverts and CSR activities. As stated earlier, when a company invests a significant amount of capital towards CSR, there is a substantial payback regarding the improvement of the overall image of the company especially when it exceeds the amount used to advertise in the media. However, if the amount announced used for adverts is more than that used for CSR activities, the company received negative evaluation (Gurhan-Canli & Schwarz, 2006). Additionally, the reputation of a company also affected the reception of environmentally based reporting towards the society. For poorly reputed businesses, transparent communicating efforts undertaken to curb and improve ecological issues will enhance the stakeholder's confidence (Kim, 2013). Additionally, such companies should engage in not only society-serving motives but also self-serving motives, in that way such a business increases the shareholder's confidence. Consequently, stakeholders view environmental reporting and CSR in a favorable light especially when done in a transparent manner, and with no obvious deception on the part of the company.

Another significant influence toward environmental reporting by a company hinged on the stakeholder's need for information. The higher the perceived concern raised by the stakeholders and the community at large, the better the level of environmental reporting experienced. Additionally, the competitor's response to environmental issues and also the consumer's concern played the most significant role in determining the depth of conservational-based reporting that a company felt that they owed the stakeholders (Wilmshurst & Frost, 2000).

It is then now left to examine if the stakeholder - company relationship brings benefits to the latter. There is much prove that when a business engages in corporate social responsibilities receive great returns across abundant stakeholder's realms spanning from investment, customers and internal stakeholders (Bhattacharya et al., 2009).

Corporate social responsibility interrelationship between the stakeholders and environmental reporting has been shown to be beneficial to the advancement of a company's finances as well as reputation. In response to this, most companies have started striving to increase accountability and transparency with the expansion attributed to the benefits accrued (Kolk, 2008). However, the relationship is not defined and the intensity it is carried out with depends on the stakeholder's needs, a perceived threat towards the company's goals, and the impact it has on the businesses finances. Therefore, when the stakeholder's increases expectations for environmental reporting, it results in improved CSR quality.

Summary of the Study

The ecological disclosure requirement expects companies to have excellent transparency in reporting data. This expectation is brought about by the hopes that the society places on any business in ensuring a peaceful and viable coexistence; this is known as corporate social responsibility. Companies are expected to adopt a favorable policy that benefits the community especially when such a venture becomes affiliated with the company's actions. In section above, it became evident that the higher the stakeholder's expectations on environmental reporting, the higher a company will set aside its resources to accomplish it. The report has shown this to be right in mining and manufacturing, which produce the environmental hazards, showing much reporting. This trend occurs in the bar graph figure 8 depicting the greenhouse emissions and environmental performance improvement in the last three years. This trend indicates that the companies involved engaged in better and more efficient systems that aided in addressing environmental concerns.

One other area that experienced a spike in performance was the education sector. It is in the learning institutions that much environmental-based issues becomes raised with research being carried out to find solutions to impending ecological problems. It is this heightened level of concern that spurred the education institutions to address the issue by concentrating on stakeholder's interest. The study shows that the greenhouse gases emissions were low, and they significantly reduced within the three years, while its performance on environmental issues was leading and at par with the mining industry. The study has consistently shown that corporate social responsibility plays a significant role in determining the level of reporting; consequently, CSR profoundly affects the stakeholder's level of concern, need for information, and accountability.

References

Bhattacharya, C. B., Korschun, D., & Sen, S. (2009). Strengthening stakeholder-company relationships through mutually beneficial corporate social responsibility initiatives Journal of Business ethics, 85(2), 257-272.

Dahlsrud, A. (2008). How corporate social responsibility is defined: an analysis of 37 definitions. Corporate social responsibility and environmental management, 15(1), 1-13.

Kolk, A. (2008). Sustainability, accountability and corporate governance: exploring multinationals' reporting practices. Business strategy and the environment, 17(1), 1-15.

Kim, Y. (2014). Strategic communication of corporate social responsibility (CSR): Effects of stated motives and corporate reputation on stakeholder responses. Public Relations Review, 40(5), 838-840.

Moir, L. (2001). What do we mean by corporate social responsibility?. Corporate Governance: The international journal of business in society, 1(2), 16-22.

Morsing, M., & Schultz, M. (2006). Corporate social responsibility communication: stakeholder information, response, and involvement strategies. Business ethics: a European review, 15(4), 323-338.