Discuss about the Corporate Social Responsibility for Environmental Efforts.
The assignment is aimed at understanding the concept of corporate social responsibility and gaining a deep insight into the arguments that are in favour and against the companies that demonstrate corporate social responsibilities. The assignment also discusses some important activities of Google, which the company is carrying out to demonstrate its corporate social responsibilities.
Corporate Social Responsibility
Corporate Social Responsibility, also known as CSR, is a relatively new concept that aims at sustainable development of the society, environment and the economy in which a company carries out its business activities (Responsibility?, 2016). Corporate social responsibility can be achieved through a wide variety of tactics, such as giving away a portion of a company’s proceeds to charity or other social working foundations or by adopting green business practices in the business decisions of the company. Let us discuss some broad categories of corporate social responsibility that some of the top business organisations are practicing:
- Environmental efforts à one of the best ways to work towards sustainable development of the society and the environment is by making the business operations environment friendly.
- Philanthropy à another common way of fulfilling corporate social responsibility is by donating a portion of the proceeds of a company to national or international charity organisations.
- Ethical labour practices à companies are also demonstrating their corporate social responsibility by acting ethically towards their employees and treating them in a better way.
- Volunteering à companies are also attending volunteer events to polish their market image and demonstrate their sincerity. By doing such good deeds without any expectation of returns, companies are actually working towards the upliftment of the society.
The concept of corporate social responsibility has been gaining a lot of importance in the modern day world because the stakeholders now feel that companies that work in an environment and rely upon the stakeholders for their operations should also play an important role in their development and conservation of the environment. As a result, a number of concepts, such as green business, etc. have been coming up, which helps business organisations in demonstrating that they too care for the environment and the society in which they operate.
Arguments in Favour of Companies Practicing Corporate Social Responsibility
Corporate social responsibility is not just a concept in papers or books but is a full-fledged movement that has taken over the business world in the past few years. It might be hard to believe for some people but some of the top companies in the world are spending millions of dollars every year to demonstrate their sincerity towards the society and the environment in which they carry out their business operations. Let us now talk about some arguments that are in favour of companies that demonstrate good corporate social responsibility in the modern day business world:
- Satisfied employees à corporate social responsibility does not only means that business organisations should work for the betterment of the customers but it includes the employees too. Employees too need some extra attention and they feel proud when they are a part of an organisation that is famous for its good deeds. Indulging into corporate social responsibility activities allows a company to keep the employees happy and achieve a good market image. As a result, the employees are happier and they tend to stick to such organisations rather than switching to new business organisations (Csrinpractice.com, 2016).
- Satisfied customers à Researches have concluded that the customer have shown positive attitude towards those companies that have demonstrated their efforts towards saving the environment and making the life of the stakeholders better. As a result, the customers have a higher tendency to buy products from such companies that are demonstrating corporate social responsibilities. A study conducted by IBM, “Attaining Sustainable growth through corporate social responsibilities” shows that majority of the business executives believe that business organisations can achieve market competencies by demonstrating corporate social responsibilities activities.
- Positive Promotion à One of the best reasons because of which corporate social responsibility is considered to be good for business organisations is that it helps in bringing about a positive promotion for companies. Where companies spend millions of dollars every year to promote their business through expensive advertising media, a good corporate social responsibility deed can bring about a lot of fame and appreciation from the media. In other words, corporate social responsibilities help business organisations in generating free and positive publicity in the industry that they operate in (Csrinpractice.com, 2016).
- Cost reductions à another good reason because of which most people support the concept of corporate social responsibility for business organisations is that it helps in reducing operational costs rather than increasing them. If properly executed, good corporate social responsibility deeds can help a company in saving a lot of its expenditure. First of all, it can easily attract a greater pool of talent due to its reputation and can easily retain its existing employees. Secondly, green business activities obviously have an impact on energy savings. Thirdly, it allows companies to manage risks more efficiently and lastly, companies have to make very less investments in traditional advertising sources.
- More business opportunities à corporate social responsibility provides a great way to develop and maintain good relationship with other entities. As corporate social responsibility requires an open, outside oriented approach, business organisations have to stay in constant touch with other parties, such as the customers, suppliers, retailers, wholesalers, etc. and because of their continuous interactions with such people that are related to their industry, they can easily identify and opportunities that could likely be beneficial in the near future (Cube Group, 2015).
Arguments Against Companies Practicing Corporate Social Responsibility
Corporate social responsibility is not all good in some cases. There have been many instances where some companies following corporate social responsibilities have failed themselves and the stakeholders in the industry. Let us now study some of the arguments that are against the companies which have been practicing corporate social responsibilities:
- Green washing à it has been observed in a number of cases that some companies claim to be working towards the betterment of the society and the environment whereas they do not do anything in reality. One of the biggest reasons behind such an act is that the managers are asked to maximise the profits for the shareholders but they stand the risk of losing their jobs if they pay attention to the welfare of the society more than maximising the wealth of the stakeholders. Thus, they face extreme criticism in the market when their false claims are discovered. This process is known as green washing (Smallbusiness.chron.com, 2016). Companies that try to fool their customers by making false claims of being into corporate social responsibility programs end up losing more than what they could have had possibly gained from being into good corporate social responsibility deeds.
- Costs à another argument against the companies that follow corporate social responsibility is that the costs fall disproportionally in case of small business organisations that try to go for corporate social responsibility. Where the top most companies can spare millions of dollars every year to demonstrate their corporate social responsibility or good deeds, medium or small business organisations cannot afford such expenses. Thus, a corporate social responsibility sometimes involves costs that might be unbearable by small or medium business organisations (Yourbusiness.azcentral.com, 2016).
- Stakeholder expectation à Another argument that stands against the companies that follow corporate social responsibility is that there is a negative perception that might originate about the stakeholders. The traditional focus of companies had been to maximise the share values of the stakeholders but the trend has completely changed now. Some customers or clients tend to invest in companies that are already trying their best towards the betterment of the society and to improve the life of the people (Post, 2016).
- Losses to the companies à a number of times it has been found that due to demonstration of corporate social responsibilities, some companies have to disclose the shortcomings of their products themselves in case they are found guilty of violating the corporate social responsibility program. There have been some cases where care manufacturers had to call all their stock back in the warehouse even though they had already sold a large number of vehicles to the public (Assignment Help, 2014).
- Shift from profit making objective à it has been said a number of times that the sole objective of any business organisation is to make profit. Milton Friedman, an economist and one of the biggest critics of CSR claims that indulging into corporate social responsibility activities can shift the focus of the company from profit making and they end up using a lot of their important resources in community welfare rather than focusing upon the maximisation of shareholder’s wealth, which is their main aim.
A Company Leading in Corporate Social Responsibility Activities
It might be shocking to know that most of the leading companies in the world have already proved their interest in corporate social responsibility activities by either donating a part of their proceeds to charity or by implementing green business practices at the workplace.
Google, the leading information technology company in the world is also leading the industry when it comes to corporate social responsibility. The company has been making a lot of efforts on multiple fronts. One such initiative that the company took is known as Google Green. Google Green is an effort by the company that aims at better utilization of energy resources and support those sources of energy that are renewable in nature. Google has been observing that the prices of renewable source of energy have been on the lower side as compared to the prices of fossils and non-renewable resources of energy (Forbes.com, 2016). The company is into recycling and believes that turning off extra lights or recycling wastage would not only reduce the operational costs but will help the company in achieving much more in the market (Moreno, 2015). By investing in renewable energy resources, the company has been able to reduce its power consumption exponentially. The data centres of the company now require 50% less power than what they required before. Google has also been working a lot to minimise its carbon footprint on the environment. Google has taken off 3,000 cars from the roads by starting its own shuttle fleet that can be used by the employees to commute from one place to another. It also comes equipped with Wi-Fi so that the employees can work while they are on the move. This single activity of Google has helped the company in reducing the annual carbon emission by 16,000 tons. Therefore, it can be easily seen from this example that even the biggest of the biggest companies are now trying their best to prove their sincerity towards the society and the environment, which is crucial for the existence of the stakeholders as well as for the business.
Even though Corporate Social Responsibility is relatively a new concept but the entire world has found this concept to be useful. The stakeholders and the business organisations have realized that business too should do something for the welfare of the society and the environment, which makes the businesses run. As a result, business organisations are spending billions of dollars every year to polish their image in the market and to prove that they too believe in the principles of sustainability and want to do something for the environment, the stakeholders and the generations to come.
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