Essay Example on Corporate Social Responsibility: Contending Definitions and Bias Claims

Introduction

The business world encounters the concept of corporate social responsibility (CSR)at all levels and is encouraged to be socially responsible. There is, however, no certain definition of CSR both in the academic and corporate world. There are numerous definitions which Van Marrewijk (2003) says are biased due to certain interests preventing implementation and development of CSR concept. There is, however, no empirical evidence to support the bias claims. The contending definitions with deviating biases hinder productive engagement on CSR as people have different views. Coming up with unbiased definition is, however, challenging due to the lack of a methodology to verify if it is biased or not.

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If unbiased definitions come up, they would still need to be applied by people practicing CSR to solve this confusion. Research carried out to analyze CSR definitions shows that nearly all the definitions include five dimensions, namely environmental, societal, economic, stakeholders, and voluntariness (Dahlsrud, 2008). According to the World business council, CSR is a business's continuous commitment to participate in economic development and portray ethical behavior while enhancing their employees' living standards alongside their families, local community, and the entire society (World Business Council for Sustainable development, 2000). This essay will focus on whether it is necessary for organizations to practice CSR or not.

Definition of Corporations

In the eyes of the law, a corporation is viewed as artificial persons. Shareholders own them, but directors and managers bear the fiduciary responsibility of protecting shareholders' investments. The contentious issue regarding CSR is whether or not a corporation can have social responsibility. Milton Friedman argues against CSR based on three points. Firstly, he says it is only human beings who should be morally responsible for their actions. Secondly, he says that it is only managers who have the sole responsibility to act on behalf of shareholders. Thirdly, Friedman argues that social problems and issues are proper state province and not the corporate managers.

Does this mean that a corporation is not morally accountable for its actions? It is a debate that has been ongoing for a long time, and literature support has revealed the extent of accountability that is accredited to corporations. According to French (1979), each organization bears a corporate an inner decision structure that acts as a guideline to decision-making processes as per the predetermined goals. Further literature reviews that every organization displays a system of beliefs and values which display the actions that the corporation either regards as right or wrong (Moore,1999). It shows that corporations have a moral responsibility.

Reasons Why Corporations Have Social Responsibilities

As seen above, corporations have social responsibilities; this is due to either moral or business reasons. As regarding the business, socially responsible corporations have more satisfied customers. Secondly, such corporations have employees who are more committed as they feel that the corporation has them in mind. The moral reason behind corporations' need for social responsibility is that corporations generally cause social problems; hence they need to use their power responsibly. Another reason is that every corporate activity has a social impact, and lastly, corporations cannot function with only the shareholders but engage a wide range of stakeholders in society.

Models of Corporate Social Responsibility

There are various models of social responsibility. Carroll's model, for instance, is a representation of a pyramid divided into four parts. At the base is economic responsibilities, the foundation on which all others are built. It is a social requirement for every corporation to be profitable. The second part is the legal responsibility as every society has coded rules of rights and wrongs; hence the corporations should adhere to the rules and regulations. The third part is on ethical responsibilities that require the corporations to avoid harm by doing what is just, fair and right. At the apex of the pyramid is philanthropic responsibilities as the society desires that any corporation working within it should give some of its resources towards helping to enhance the value of life of the community (Geva, 2008). Apart from the pyramid model, there are also concentric circles as well as intersecting circles. The first figure below shows the difference between the pyramid, concentric, and intersecting circle models in their explanation of CSR, while the second one shows Carroll's four-part model.

CSR Pyramid Intersecting Circles Concentric Circles

General Description Hierarchy of separate responsibilities Nonhierarchical set of intersecting responsibilities Integration of responsibilities; all sharing a central core.

Theoretical Assumptions

Nature of CSR Normative restraints of responsiveness Classification framework; no normative guidance Incurred obligation to work for social betterment.

Scope of Responsibilities Narrow split Wide

Total CSR Conjunction Disjunction Integration

Order of importance Hierarchy; Economic responsibility first No prima facie order Inclusion system; economic circle at the core

Role of Philanthropy "Icing on the cake." Subsumed under economic/ethical responsibilities An integral part of CSR

Research Implications

Operationalization Constantsum method CSR portraits A representative range of measures

CSR-CFP relationship Positive Positive, Negative, or Neutral Nonlinear

International Practice Of CSR

CSR is famous in the United States, and there has been a spread of its influence across the world. Explicit vs. Implicit CSR best explains why and how CSR changes and differs among nations (Kumar et al., 2019). For instance, a comparative study between the United States and Europe revealed remarkable differences in the companies. Regional differences, therefore, exist concerning the four CSR levels. For instance, at the economic responsibility level, the United States focuses on shareholders. India, on the other hand, invests in the local community while France has wide responsibility towards employees.

Regarding legal responsibility, the state is seen as the law enforcer in Europe, while in the other regions, the government does the same. Ethical responsibility is even more variant as ethical values, expectations, and preferences vary. About philanthropic responsibilities, Europe gives through legal framework while companies in China, USA, and India share their wealth.

Advantages of CSR Strategy

Strategic CSR involves companies taking an approach that determines the activities that they have enough resources to commit towards social responsibility; they have the freedom to choose activities that enhance their competitive advantage. Incorporating CSR in the company's plans helps the organization in ensuring that the rise in shareholder value and profits does not overshadow ethical responsibility towards the stakeholders. Other benefits of adopting CSR strategies include enhancing companies' ability to balance societal value with economic creation, management of stakeholders relationships particularly the ones with competitive values, identification and response of opportunities and threats that faces their stakeholders development of sustainable business practices as well as right decision making on Company's capability of philanthropic activities (Voors, 2020). CSR strategy can, therefore, be developed using various ways, as explained below.

Firstly, a company can build its strategy around its core competencies. There are various areas that a company can support, but if it is not in line with its core competencies, then the CSR is less effective. CSR is more effective if a company supports an area that is established in terms of knowledge, research and strengths because it is an advantage to community partners as well as a company due to new revenue streams and customer visibility. CSR can, therefore, be an opportunity-seeking avenue as well as a risk mitigation strategy; hence organizations should look out for the intersection between social and economic returns.

The second strategy is recognizing the issues that are crucial to your customers as most clients want to deal with companies that are CSR complaints (Gurlek, Duzgun, and Meydan Uygur, 2017). For instance, a CSR study carried out by Cone Communications revealed that 87% of the customers preferred purchasing products from companies that support environmental or social issues. Consumers are therefore rewarding socially responsible organizations via brand loyalty, contributing towards the company's charity programs, and buy products designed with social benefits (Komornicki and Komornicki, 2020). Besides, consumers do not fear to punish harmful companies and irresponsibility via negative campaigns all over social media and boycotts.

The third strategy is developing CSR initiatives that make employees proud as they are the company's biggest asset. Nearly eighty percent of millennials contemplate the company's environmental and social responsibilities while deciding about the workplace, and 64% of the declines the job offer if they realize the potential employer lacks strong CSR practices. Good employers have an advantage in terms of retention and recruitment of employees. Besides, engaged employees have a higher probability of staying longer, reducing company' attrition fees.88% of the millennials weigh job fulfillment in terms of the opportunities that job presents them with to positively impact environmental and social issues (Komornicki and Komornicki, 2020). It may include volunteering paid time-off or even Company's service to virtual micro-volunteering opportunities based on employees' skills.

The fourth strategy is measuring the Return on Investment of CSR efforts for both investors and the C-suite. It is overwhelming to measure CSR programs, especially when the initiative involves numerous departments like marketing, human resource, sustainability, and compliance. The easier way to inform investors and C-suite that CSR efforts are affecting the performance of the company is by inventing an organized reporting framework that is linked to strategic business priorities. Socially conscious efforts that have a direct impact on the company should be quantified (Morrissey et al., 2020). An example of these efforts includes new customer acquisition, brand awareness, and cost savings.

The fifth technique is the expansion of a corporation's definition of CSR. The definition can touch on various areas such as involvement in creation of products and services that promote individual wellbeing, becoming a good employer, operating in ways that beneficial and protective of the environment as well as the society, standing up for social justice as well as investing in local and global causes (Team et al., 2020). A definition that touches more areas is more appealing; hence adapting it is a plus to the company.

Connection Amid CSR And Financial Performance

Just like the explanation of CSR, the association between CSR and financial performance has been a contentious issue over some time. Those who argue against CSR state that companies incur costs from CSR actions and end up economically disadvantaged as opposed to their competitors who are less responsible (Carroll et al., 1985). Those of a contrasting opinion argues that there are minimal explicit costs incurred through CSR, and the companies are likely to have more advantages due to socially responsible actions. These advantages include high employee rete...