Discuss about the Corporate Social Responsibility for Disentangling Substance.
CSR is not visible in most of the cases, as the benefit from it towards the society is doubtful and invisible in most of the cases. Studies in the past proved that more than 80% of the decision-makers for corporate CSR had positive attitude about implementing a good CSR and providing branding and benefits to their employees. The reason behind this is most of the companies want to progress through connecting themselves with a reason to utilize cheap advertising sources or to face the pressures of claims. CSR alters attention from the original issues and help the corporations to gain legitimacy, avoid regulation and to enter the markets and change the ground from public functions to privatisation (Boehm, Brei and Dabhi 2015).
Although some people see CSR as patronage by various name, it can be broadly explained as the attempt organizations make beyond and above the regulation to meet the requirements of shareholders to earn profit. Rather than running away from the situation, organizations started brandishing CSR as friendly approach of capitalism through the movement of highlighting the issue of corporate power. The unpredicted growth of CSR can results into optimistic power of the market to provide with environmental and social changes. However, the market consistently fails when it comes to supplying goods to public. Thus, it is necessary to implement CSR subject to the restriction of the market (Coombs and Holladay 2015).
Making markets work: After the launch, CSR initiatives aggravate alterations in basic traditions within some organizations. It helps in facing lawsuit problem, solving problems relating to labour standard, management issues with the shareholders and profit related issues. However, no one is sure about the changes those are required to be added up with the implementation of CSR to get better performance (Elving et al. 2015).
Market failure: The major problem with the CSR concept is that it makes the situation more complex rather than simplifying it and not succeeds in acknowledging the offsets between the ethical outcomes and financial health of the company. However, if they are able to do the adjustments the organization will definitely be able to earn profits. Strategies of CSR performs under various conditions but they are always susceptible to the risk of market failures including externalities, imperfect data and free riders (Marques and Mintzberg 2015).
Through using CSR market can offer both long term and short term social benefits and financial returns: One major statement behind the implementation of CSR is that social objectives and business outcomes can be less or more supportive and they did not explained the reason for this purpose. Users are influenced to maximise their interest and are interested in factors as stable societies, wealth and healthy atmosphere. There is very little evidence about the expected behaviour of the market. In reality, it is be not easy to establish that assuring an educated labour force for the future, motivation like preserving natural assets, or making intended assistance to local community really help companies to improve their base line. While there are history of success stories where drivers for business can be associated with social objectives, for example, which are contributed to developing a labour force for the future, they only offer a messy approach to improve the public good (Olsen, Slotegraaf and Chandukala 2014).
No matter placed in any situation, such investments are particularly improbable to give return in the time horizon of two- to four-year window that public companies are generally required through the demands of the stock market. Whenever a company releases a “profits warning,” the markets decrease their share price. On the other hand, investments in social causes or environment or become an extravagance for the company and are often placed for sacrificing the contribution when they going through rough situation. In the meantime, it has been noticed that failure in any objective of companies to contribute in projects that may earn long-term profit, like safety systems and health benefits (Roulet and Touboul 2015).
CSR can barely be expected to supply when the short-term requirements of the stock market offer disincentives for doing so. When interest of shareholders controls the corporate workings, results may become even less associated to the benefits of public.
The ethical consumer drives will change: Although the ethical business are rewarded in few markets but for many consumers ethics is a relative thing and not the primary fact. In reality, most of the reviews reveals that consumers are more anxious about the factors like taste, price, or sell-by date than ethics. In the United Kingdom, data for ethical consumerism reveal that although most of the customers are worried about social or environmental issues, with 83% of customers are intended to act ethically on a standard basis, only 18% of customers occasionally act ethically, while less than 5% of consumers show reliable ethical and green purchasing behaviours. In the United States, environmental attitudes of consumer and intensity to buy environmentally oriented goods, and it segregates consumers into five “shades of green”: Sprouts, True-Blue Greens, Greenback Greens, Grousers, and Basic Browns. True-Blue Greens are known as the “greenest” customers, those “most expected to walk through their environmental talk,” and present about 9% of the population. The least environmentally concerned are the “Basic Browns,” who consider “individual actions such as recycling or buying green products can’t make a difference” and about 33 percent of the population are involved under this (Schneper et al. 2015).
There will be a competitive “race to the top” over ethics amongst businesses: A further legend of CSR is that aggressive pressure between various companies will actually direct more companies competing on ethics, as pointed out by an growing number of awards systems for good organizations, like the Business Ethics Awards, or Fortune’s annual “Best Companies to Work For” competitions. Companies are always eager to be associated with CSR schemes because they offer good relations with public. However, in some instances, organizations are able to exploit on well-intentioned efforts. The U.S.-based Corporate Watch has noticed various instances of “green washing” by companies, and has reported how various organizations utilize the United Nations to the advantages related to public relations (Lewis 2016).
From the above discussions, it is concluded that some strategies of imposing regulatory objectives have altered consumer behaviour than the efforts of CSR. For example, social labelling has been an exceptionally efficient tool for changing behaviour of consumer. Campaigners and legal scholars have started to look at the ethical structure of the corporation. At present, in Western legal systems, companies have a primary responsibility to their stakeholders, and social actions from the company’s part are not prohibited and the profit-maximizing objectives of the organization are the norm. Therefore, companies efficiently choose financial benefit over social benefits. Only few social enterprises, like Fair Trade companies, have used a different path and they are far away from ruling the market. Yet lessons can be learned from their successes and should be adopted to put forward a new institutional model for larger shareholder-owned companies. Therefore, the contention of various authors that CSR is little more than green washing is not true as there are always some chance of failure to achieve the targets of implementation of CSR and no organization can assess the risks to the extent of 100%
Boehm, S., Brei, V. and Dabhi, S., 2015. EDF Energy's green CSR claims examined: the follies of global carbon commodity chains. Global Networks, 15(s1), pp.S87-S107.
Coombs, T. and Holladay, S., 2015. CSR as crisis risk: expanding how we conceptualize the relationship. Corporate Communications: An International Journal, 20(2), pp.144-162.
Elving, W.J., Golob, U., Podnar, K., Ellerup-Nielsen, A. and Thomson, C., 2015. The bad, the ugly and the good: new challenges for CSR communication. Corporate Communications: An International Journal, 20(2), pp.118-127.
Lewis, J.K., 2016. Corporate Social Responsibility/Sustainability Reporting Among the Fortune Global 250: Greenwashing or Green Supply Chain?. In Entrepreneurship, Business and Economics-Vol. 1 (pp. 347-362). Springer International Publishing.
Marques, J.C. and Mintzberg, H., 2015. Why Corporate Social Responsibility Isn't a Piece of Cake. MIT Sloan Management Review, 56(4), p.8.
Olsen, M.C., Slotegraaf, R.J. and Chandukala, S.R., 2014. Green claims and message frames: how green new products change brand attitude. Journal of Marketing, 78(5), pp.119-137.
Roulet, T.J. and Touboul, S., 2015. The intentions with which the road is paved: Attitudes to liberalism as determinants of greenwashing. Journal of Business Ethics, 128(2), pp.305-320.
Schneper, W.D., Meyskens, M., Soleimani, A., Celo, S., He, W. and Leartsurawat, W., 2015. Organizational drivers of corporate social responsibility: disentangling substance from rhetoric. SAM Advanced Management Journal, 80(1), p.20.