Assignment 83

Delp10

Ch14notdonepptx2.pptx

Home >Nursing homework help >Assignment 83

13: Corporate Social Responsibility and Human Resource Management

Dr. Mirna Safi

iStock.com/Liuser

Introduction

Society expects business to adhere to certain social and ethical standards – that is, to meet its corporate social responsibility (CSR).

The duty of a business to go beyond profit maximization and act responsibly and contribute positively to society.

Companies are hiring CSR managers, participating in CSR performance indices such as the FTSE4Good, joining CSR membership organizations like Business in the Community and engaging with international initiatives such as the Sustainable Development Goals (SDGs), which aim to eradicate poverty, reduce inequality and injustice, and address climate change.

Introduction

The importance of CSR is also reflected in the fact that responsibility for it increasingly lies with a member of the board of directors and that a web link to corporate responsibility is generally found on the home page of most large publicly listed companies.

There is often a gap between the rhetoric of CSR and the reality of the practices firms engage in.

Some argue that CSR is ineffective and regulation would be a better way of getting firms to meet the standards that society expects of them.

What is corporate social responsibility?

The Confederation of Business Industry (CBI) describes CSR as ‘the acknowledgement by companies that they should be accountable not only for their financial performance, but for the impact of their activities on society and/or the environment’.

This suggests that a business is responsible for its own impact on society.

The European Commission (2001) defines CSR as ‘a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment’.

This implies that businesses generally need to have a positive impact on societal progress.

What is corporate social responsibility?

CSR is about voluntary action and self-regulation by firms to go beyond what the law requires of them.

Many firms who engage with CSR no longer use the word ‘social’, preferring instead to use ‘corporate responsibility’, ‘responsible business’ or ‘corporate citizenship’.

The CSR agenda has widened beyond social issues to include:

Environmental degradation

Global warming

Sustainable production

Other ‘green’ topics have become major issues of concern.

What is corporate social responsibility?

Which CSR issues should firms address?

The range of potential CSP issues is endless and includes:

Protection of the environment

Sustainability

Fair trade

Poverty

Human rights

Labour standards

Equality and diversity

Employee engagement

Health and safety

Animal welfare

Safe products

Ethical marketing

Supporting charities.

Which CSR issues should firms address?

The suggestion is not that all firms should address all of these issues, but that firms should address those that are of relevance to the nature of their business and in proportion to its size and locality.

A small local business, for example, might sponsor a local charity or sports team, purchase materials from other local businesses in order to support the community and treat its employees fairly and with respect.

The expectations of society of a large multinational business would be far greater.

The controversy of CSR

While CSR has only become a mainstream business issue over the last decade, some companies have sought to act responsibly for as long as business has existed.

Cadbury, Rowntree and Fry were all Quaker-owned and known for their enlightened employee welfare.

However, some of these exemplars of social responsibility have not been immune from criticism.

Cadbury was accused in 1909 of gaining financially from slavery on cocoa plantations (Blowfield and Murray, 2011), even though the campaign against slavery had been Quaker-led (Sachdev, 2006).

The controversy of CSR

The Body Shop was widely seen as being a model example of socially responsible business and has had a significant impact on embedding CSR in contemporary corporate culture (Hausman, 2007).

However, the Body Shop was accused by Entine (1994) of hypocrisy in trading on an ethical image when much of this image was no more than public relations spin.

Jon Entine, who is a former producer with ABC, the US television network.

For some, CSR is a distraction from the core concern of business, which is making a profit. This is known as the shareholder view of the firm.

The real debate over CSR occurs between those who think that business should voluntarily make a contribution to the public good and those who feel that government regulation is the best way to ensure that corporations adhere to the standards society expects of them.

Plagiarism - It says it has previously disproved suggestions that Ms Roddick in effect stole the name from a company in California. The owners, Peggy Short and Jane Saunders, have testified that they never made such allegations.

Natural products - It says it cannot guarantee 100 per cent of its ingredients are 'natural', but that it makes no attempt to conceal that some are synthetic.

Animal testing - It rejects claims that it has used lack of animal testing as a marketing ploy and that it has resisted attempts to seek a complete ban on animal testing for cosmetics and pressured the British Union for the Abolition of Vivisection to alter its campaigns to suit its marketing interests. It says its reputation on testing was vindicated when it won damages from Channel 4 and an independent production company in a libel action.

Environmental practices - It says discharges from its New Jersey plant were limited to two 'minor' spillages of shampoo, both during 1992. The company reported both.

The shareholder view of the firm

At the heart of the shareholder view of the firm is the belief that the sole aim of business is profit maximization.

This has been the dominant view of business for much of the 20th century.

Through competition, resources such as capital and labour are allocated efficiently and prices are driven down.

Business makes a significant contribution to society by creating jobs, contributing to taxation revenues, delivering economic growth and providing new products and services that society wants and needs.

Getting involved in solving complex social and environmental issues is a distraction best left to government.

The stakeholder view of the firm: the ‘social contract’ arguments

From an ethical perspective, businesses exist in a society and although society benefits from the wealth creation, taxation revenue and job creation of successful companies, firms also benefit from the communities they operate within.

A symbiotic relationship exists between business and society, and as a result there is a ‘social contract’ (Steiner and Steiner, 2012).

An implicit agreement between business and society that sets out the broad standards that business should adhere to and duties they should fulfil in order to maintain the support and legitimacy of society.

The stakeholder view of the firm: the ‘social contract’ arguments

Some social problems can only be solved with the help of business, such as unemployment or discrimination in the workplace and therefore society needs business to assist in finding solutions.

Some of the problems society faces have at least in part been caused by business, such as environmental degradation and pollution.

Confidence in business has plummeted further in the wake of the recent financial meltdown, the state bailout of privately owned banks, the ensuing deep recession, soaring unemployment levels and ongoing austerity budgets.

The stakeholder view of the firm: the ‘business case’ arguments

From a self-interest perspective, the argument for CSR is that it can improve a firm’s financial performance.

The actions of firms can thus generate positive benefits and reduce reputational risk.

According to advocates of CSR three groups in particular will reward businesses for acting responsibly:

Employees

Customers

Investors.

The case against CSR

When what is good for the firm and what is good for society coincide, why call it corporate social responsibility?

Reducing costs, improving the bottom line, increasing long-term value, and so on, are what managers get paid to do.

Karnani (2010) stated, fast food chains have not introduced healthy salads into their menus because of public health concerns, but because they realised it could increase sales.

To credit these corporations with being ‘socially responsible' is to stretch the term to mean anything a company might do to increase profits if, in doing so, it also happens to have some beneficent impact on the rest of society (Reich, 2007: 171).

The case against CSR

Nike came under intense public scrutiny by labour rights NGOs and trade unions throughout the 1990s for manufacturing its shoes in ‘sweatshops’.

When the negative publicity did not abate and consumers began boycotting the company it began to seriously address the issues and is sometimes held up as an example of how CSR can be effective.

Thank you for listening!