Corporate Social Responsibility (CSR) is a responsibility that any organization has to impact its society, environment and other stakeholders through its decisions and ethical behavior. By meeting this responsibility, the organization takes cares about:
- Sustainability regarding health and welfare of the society
- Takes into account the expectations of the society, as every stakeholder of organization has some expectations from the organization
- Comply with the national, international laws, rules, regulations, norms and behavior.
Corporate social responsibility is being discussed since the early twentieth century, but there is little agreement on its definition due to the diversity of working environment, cultural diversity, the legal framework of each country and other environmental changes. Therefore corporate social responsibility is related to but not identified with, business ethics. However, corporate social responsibility is concerned with the legal, ethical, economic and social responsibilities of the business that it has to fulfill along with its earning on investment responsibilities.
Meeting its corporate social responsibility, the organization has to fulfill the demands and expectations of its stakeholders i.e. owners, shareholders, employees, suppliers, customers, and community, etc. and at the same time, it has to satisfy and fulfill the business requirements of the organization. The organization has to serve in a way that is acceptable and guardian of interests of both sides.
There are different types of stakeholders of each organization, and they all have their expectations from the organization. Every stakeholder expects that the organization will meet his requirements and expectations. Different stakeholders and their expectations from the organization are briefly elaborated below:
Employees in every organization are concerned with traditional human resource management issues such as personnel management, policies, procedure, recruitment, selection, salary, wages, and benefits, etc. However, new HR issues required more responsiveness and vigilance for the organizations. These issues are the work-life balance, care of dependents relative, diversity in workplace and harassment, etc. The employees are concerned with their expectations mentioned above, and they expect that to meet their expectations is the obligation of the organization.
Regarding corporate social responsibility, supply chain issues include human rights for the workforce, especially for outsourced labor and timely payments against deliveries, etc. Suppliers of any organization expect that the organization will make timely and prompt payments as they have supplied goods, parts, and services, whatever the deal in. Many big companies in the world have faced huge crises due to outsourced labor e.g. Nike and Gap. After facing financial and business loss, these companies increased their monitoring in human resources rights and labor relation practices, especially in outsourced labor cases.
It is observed through many studies that customers are more linked and concerned with the firms those are more socially responsible. The customers most likely purchase the products and services from the organizations that are more socially responsible and less purchase from socially irresponsible firms. And consumers prefer the products that are good and acceptable for the environment, not tested on the animals and are well documented. Corporate social responsibility issues for consumers include the product manufacturing, either the human rights of workers and safety measures were taken into account while manufacturing process, labeling, and packaging, marketing, and selling practices.
Consumers are more concerned about all these things, and consumers want to know that either the organization is giving the suitable and economics salary and wages to employees during the manufacturing process or not? They are more concerned and take care about all points mentioned above.
Communities can include local peoples in the societies, the local bodies, peoples living in the surrounding areas of the organization. It is the basic and core responsibility of the organization to take care of the necessities of all the peoples living around. The organization has to take care of the living standards of the peoples, food requirements, and health sustainability of the peoples and communities in around the organization. The community in which the organization works expects that the organization will provide some help and basic guidance in maintaining and improving their living standard. They are expecting that the organization will help to provide the basic and early education to their children. The community expects that the organization will create job opportunities for them and it will improve their living standard.
The investors are more concerned while making investments in any organization or business that either their investment will be beneficial for the community or not. They are more careful while investing that their investment should not be a social risk for the community and peoples living in any society. They take pre-action assessment tests and surveys and judge all issues of this type.
Theoretical Concepts and approaches:
The main and basic thing in corporate social responsibility is to deal with and provide the basic facilities and help to the stakeholders of the organization by using its resources. There are different theoretical concepts and approaches that define the corporate social responsibility, which is briefly elaborated below:
The Triple Bottom Line:
The form of corporate social responsibility that dictates that the corporate leaders to formulate the bottom-line results of corporate social investment not only in economic perspective i.e. cost versus investment but also in the context of company effects in the social empire, is called the triple bottom line theory (Bookboon, 2008). Sustainability factor is very important factor in corporate social responsibility, and this sustainability may be economic, social and environmental sustainability.
Edward Freeman and others describe stakeholder theory. This theory lists and describes those groups and individuals who will be affected by the company’s actions and asks, “What are their legitimate claims on business?” “What rights do they have to the company’s actions?”
A simple example is that if any company is producing industrial waste, it is the responsibility of its owner to dispose of the waste safely.
To understand the Corporate Social Responsibility (CSR) is a win-win situation. By complying with its social responsibility, the organization will not only appeal to socially conscious consumers and employees, but the organization will make a real difference in the world. Keep in mind that in corporate social responsibility, transparency, and honesty about what you are doing are principal to earning interest of the public. The corporate world has more power than many realize, and using that power, peoples from all backgrounds, ages, and interest may bring together to improve the world.