The Universal Concept Of Corporate Social Responsibility Business Essay Example

quickly damage hard-earned reputations. Cultivating an ethical corporate culture can help mitigate risks in the market. Companies strive to differentiate themselves through unique branding strategies, where CSR plays a crucial role in fostering consumer satisfaction based on ethical values. Brands such as The Body Shop and American Apparel serve as examples of this practice's effectiveness. Service providers can also benefit from developing a reputation for integrity and best practices.

It is crucial for all entities to acknowledge their impact on the environment and take responsibility. Corporate social responsibility (CSR) or business citizenship refers to the practice of companies behaving in a socially responsible manner and collaborating with other socially responsible businesses. For both the public sector and businesses, considering CSR when planning for the future is increasingly important in order to act responsibly. Failure to do so can lead to negative consequences, including receiving feedback that can harm the company's reputation. When companies portray themselves as socially responsible by highlighting their environmental or sustainability efforts but engage in immoral, illegal, or socially irresponsible activities, it sends a damaging message to stakeholders, consumers, and investors. This behavior negatively affects the company's credibility and image in the market. Enron serves as an example of this detrimental effect; a Texas-based energy company that collapsed in 2001 due to substantial debt despite its reputation for exceptional corporate social responsibility work and significant donations to charitable organizations. The collapse was caused by excessive debt, leading Jeffrey Skilling -the main individual responsible- to receive a 24-year jail sentence.

Enron's actions were highlighted in articles, emphasizing the negative consequences faced by the company (Adam Lashinsky, New York Times, November 2001). The article titled "Legal

Troubles Arising from Poor Corporate Social Responsibility" discusses how companies that engage in irresponsible societal activities also suffer significant consequences. A prime example of this is the Exxon Valdez oiler incident which occurred on March 24, 1989 in Prince William Sound, Alaska. This incident resulted in immense damage to the environment and fishing industry when approximately 11 million gallons of crude oil spilled. To address the aftermath of this scandalous event, Exxon Valdez had to pay $4.84 billion (National Oceanic and Atmospheric Administration (NOAA), March 24, 1989). The repercussions of flawed CSR strategies on a company's brand and reputation are clearly evident as it takes years to build a brand but just one mistake in corporate societal responsibility can permanently tarnish its perception among consumers. Reversing the harm caused by poor CSR practices is not an easy task; according to a study conducted by Tsinghua University, 68% of consumers within the Fast Moving Consumer Goods (FMCG) industry would refuse to purchase products from companies known for their inadequate corporate societal responsibility.The automotive industry has also seen a similar trend, as reported by Tsinghua University, where 62.9% of customers are unwilling to buy cars from companies with weak CSR performance. It is crucial for companies to incorporate Corporate Social Responsibility into their public image in order to greatly influence brand strength. However, poor decisions in this area can harm an already-established reputation. Managing risk is essential in corporate strategies because incidents like corruption scandals or environmental issues can quickly damage a company's reputation and attract attention from regulators, governments, and courts. To mitigate these risks, companies must promote an authentic culture of integrity and ethical practices.

From a business standpoint, the planning processes of many multinational organizations now heavily rely on Corporate Social Responsibility. The motivations behind organizations' responsibilities towards society and the environment remain uncertain, whether they arise from genuine interest or hidden agendas (Kytle Beth and Paramveer Singh, 2005). In 1959, Prof Malloy argued that organizations produce goods to generate profits for their shareholders; however, Milton Friedman disagrees with social responsibility being viewed as a business function. Within businesses exist individuals who hold both humanistic and realistic perspectives. The humanistic perspective emphasizes that preserving the environment is not only important for business purposes but also for sustaining human life.On the other hand, a realistic perspective recognizes the importance of balancing natural resource exploitation and biodiversity conservation to ensure both profitability and sustainability (Grace and Cohen, 2005). Intermediaries play a role in evaluating and establishing an ideal scenario referred to as "pretor efficient." Factors such as population growth, government policies, and competition have the potential to destabilize an organization if its motivations or unethical practices are exposed. Legal structures are in place to protect international boundaries from being exploited by self-interested multimillion-dollar organizations. International bodies like the International Court of Justice (ICJ, 2007) have the authority to penalize organizations that fail to comply with regulations. The concept of corporate social responsibility (CSR) has sparked a debate. Some argue that it selectively favors certain activities while neglecting others, leading companies to focus solely on positive aspects and potentially "greenwash" their socially and environmentally responsible image. Moreover, there are those who claim that CSR impedes free markets. One aspect of this debate revolves around the notion of a borderline organization motive where

CSR attributes alternative motives to companies which they would deny having. For example, some believe that companies implement CSR programs as a means to divert public attention from ethical concerns associated with their primary operations.The behavior of British American Tobacco (BAT) and oil giant BP, known for their CSR reports and environmental awareness campaigns respectively, has been accused of being contradictory to their operations. Critics argue that companies engage in social projects primarily for commercial benefit, aiming to improve their reputation with the public or government. They present various reasons why profit-oriented corporations cannot effectively promote society's overall interests. McDonald's Corporation has faced ethical criticism in the McLibel case while Shell, despite its well-known CSR policy, was involved in an oil reserves misreporting scandal. Both companies have sought to restore their reputation through partnerships with other organizations. However, some argue that stronger regulations are necessary to ensure corporate social responsibility as profits often take precedence over worker and environmental welfare. This is evident through production outsourcing to countries with less stringent regulations, resulting in corporations not fully bearing the costs associated with their societal impact such as pollution cleanup expenses that ultimately burden society as a whole.Consequently, increased profits for corporations come at the expense of societal and ecological welfare. Corporate social responsibility (CSR) goes beyond legal requirements and involves businesses engaging in actions that benefit society. The concept of "corporate citizenship" emphasizes businesses' moral obligations towards society. Just like individuals, businesses have a significant role in society and should adhere to societal norms when making decisions. Business operations have wide-ranging effects that impact not just owners but also unrelated individuals. Integrating CSR into a

business plan yields advantages by directly influencing various aspects of economics, such as customers, public relations, shareholders, and employees. Possessing sound business strategies is not mandatory to practice social responsibility. In industries with environmental concerns like mining, obtaining stakeholder approval and the right to operate is critical. This endorsement must be acquired from specific governments and affected communities since their operations can impact nearby communities. Failing to meet this requirement can lead to consequences for the industry. Maintaining strong business values related to social, ethical, and environmental performance is crucial for a company's brand value and reputation.

Benefits of Corporate Social Responsibility:

In today's competitive global market, the significance of upholding a positive reputation becomes even more crucial as it aids companies in their development and competition against rivals. The increasing importance of brand names further highlights the importance of maintaining a positive image.

Enhanced Efficiency in Operations:
Corporate Social Responsibility (CSR) is essential for improving operational efficiency within businesses. It has a significant impact on various aspects, such as energy and natural resource utilization and waste management practices. By focusing on specific areas, companies can enhance their overall efficiency.

One way CSR contributes to efficiency is through the recruitment process. Improving this process leads to better employee well-being and lifestyle, resulting in fewer absences from work and improved performance. As a result, these benefits reduce costs for the company.

Creating a relaxing and stress-free work environment is another strategy to boost employee performance and productivity. Research conducted by Medstat Group and American Productivity and Quality Center in 2009 confirms that providing healthcare services to employees positively impacts productivity, efficiency, and reduces absenteeism.

Furthermore, customer satisfaction plays a vital role in sales

success. According to a study conducted by Millennium Poll in December 1999 on corporate social responsibility, businesses prioritizing societal contributions over profits must understand and effectively meet customers' needs.The passage emphasizes the significance of an employer's reputation and position in attracting and retaining quality employees. A study conducted by UK consulting house Stanton Marris reveals that about 6% of employees prioritize a company's commitment when searching for employment. Collaboration with local communities allows customization of products and services to cater to local markets, as exemplified by IBM Corporation partnering with the community to develop six new products in 2000, resulting in around 15 patent applications. Within Corporate Social Responsibility (CSR), there are two types of shareholders - insiders and non-affiliated proprietors. Insiders heavily rely on the firm's conditions, while non-affiliated proprietors hold shares but do not affect the portfolio or company ownership. Insiders benefit from high CSR but also bear the cost of being associated with perceived irresponsibility. The insider group is further divided into directors and non-directors. The impact of corporate social responsibility (CSR) evaluation on different subgroups is uncertain, but it is believed that both groups value company performance.To illustrate this concept, we can examine three individuals who have ties to their respective companies: Steven Jobs, CEO of Apple Computer; Warren Buffet, a large blockholder and director at The Coca-Cola Company; and Roy Disney, a director at The Walt Disney Company. All three individuals would likely benefit more from a favorable evaluation in corporate social responsibility (CSR) compared to Fidelity, which is a diversified stockholder. This struggle takes into consideration factors such as ownership, capital structure, free cash flow, and management issues.

Furthermore, examples

of CSR are provided for BG INDIA LTD in relation to the growing demand for natural gas in India due to concerns about energy consumption's environmental impact. With its expertise in the natural gas industry, BG India has the potential to make significant contributions towards meeting India's future energy needs. Notable events involving BG India include:

- Formation of Mahanagar Gas Ltd as a joint venture with the Gas Authority of India Ltd (GAIL) in 1995.
- Acquisition of majority stake in Gujarat Gas Company Limited by BG Group in 1997.
- Commissioning of a 73 km Hazira-Ankleshwar transmission pipeline by GGCL in 2000.
- Acquisition of a 30% stake in the Panna Mukta and Tapti Fields by BG Group in 2002.

As an active subsidiary of BG Group involved in various aspects of the natural gas industry, BG India holds a 30% stake in the Taptigas field and the Panna/Mukta oil and gas fields. They also have plans for substantial investments to further develop these areas.BG India has majority control over Gujarat Gas Company Limited, which supplies natural gas to Ankleshwar, Bharuch, and Surat in south Gujarat. They also have an interest in Mahanagar Gas Limited, a company establishing a natural gas distribution system in Mumbai. Both Gujarat Gas Company Limited and Mahanagar Gas Limited provide piped natural gas for domestic, commercial, and industrial clients as well as compressed natural gas for vehicles.

In terms of corporate responsibility (CR), BG India considers it a top priority to be responsible towards employees and the wider community. As part of their CR efforts, they contribute to society by supplying gas to markets, supporting development through energy and infrastructure projects, creating jobs

in local economies, and fulfilling tax obligations. In addition to their business ventures,BG India supports St Teresa's Special School by providing funds for training materials.However,it has been two years since they last heard from the school administration regarding this support.Typically,BG India takes several months to respond when it comes to company policies on contributions or other forms of assistance.

Tata Tea's corporate responsibility strategy focuses on responsible behavior and contributing positively to community development.As part of this strategy,the company has recently launched a campaign aimed at encouraging Indians to vote in elections.Tata Tea has created a website specifically for facilitating voter registration. In 1996, Dr. K Anji Reddy founded Dr.A Reddy's Foundation to promote Public-Private Partnership (PPP) models that address poverty causes. The foundation empowers individuals through lifelong learning opportunities and support, enabling them to improve their livelihoods and respond to societal needs. Originally a social initiative, Dr.Reddy's has evolved into a pharmaceutical company committed to corporate social responsibility as evaluated by CSR agency Karmayoga.
Lupin Laboratories is another pharmaceutical company actively benefiting society by developing advanced medicines that enhance health and lifespan based on societal expectations.
To ensure comprehensive policy development, implementation, and communication related to corporate social responsibility, a cross-functional team was established in 2002. This team includes representatives from key business areas who establish policies and mechanisms for implementation and monitoring. They also contribute progress reports through presentations, updates on the company's website, prioritizing customer satisfaction and meeting product demand when making decisions.Corporate responsibility is crucial in achieving business objectives, particularly in larger corporations. It enhances compliance, reputation, and relationships, ultimately boosting shareholder value and profitability. Private companies may be prompted to adopt ethical practices

due to supply chain expectations from multinational corporations. Moreover, integrating corporate responsibility into a company's core strategy can enhance its appeal as an employer.