Corporate Social Responsibility The Good, Term Paper
Excerpt from Term Paper :
But the shareholders themselves need to be more aware and more involved in their company's business in order for any meaningful change to sustain itself:
Shareholders, the intended beneficiaries of the corporate vehicle, are the ultimate capitalists: avaricious accumulators with little fiscal risk and no legal responsibility for the way in which they pursue their imperative to accumulate. Shareholders, not corporations, show indifference to the needs and values of society. It is their behaviour that is most appropriately characterized as amoral indifference to the plight of others and their environment. Shareholders, not corporations, behave in a pathological manner. And shareholders should be the targets for the cure that we need for our ills. (Glasbeek 2005: 24)
There is also the problem of victimisation of other cultures in a global market. As Strike, Gao and Bansal (2006) point out in their article, 'Being Good While Being Bad: Social Responsibility and the International Diversification of U.S. Firms.' CSR is often used in the primary country to cover up the unethical treatment of a corporation's labour force in another world market. They illustrate the example of Nike who employ's over 23,000 people world-wide, but has created sweat shops in underdeveloped countries, either directly or indirectly, in order to produce greater profits, part of which they market as donations to help with the alleviation of poverty in those very same countries. Again the culture of deception and spin doctoring is in full ugly force in this example.
This type of behaviour not only impacts the citizens of these countries but can also have devastating effects on the natural ecosystem of the region as well. It is important to remember that any CSR initiative must keep a top priority when dealing with other countries.
With respect to the natural environment of host countries, the concept of 'sustainable strategic management' sets the standard high... this refers to strategic manage-merit processes that seek competitive advantages consistent with a core value of environmental sustainability. (Carroll 2005:132)
However, all is not lost, there are many corporations that are following and encouraging good CSR in their development and continued sustainability. One such example is the GAP. In fact they address CSR in their mission statement for the corporation:
At Gap Inc., social responsibility isn't just a catchphrase or a feel-good initiative. it's a reflection of who we are and how we operate as a company. To us, being socially responsible means striving to embed our values and ethics into everything we do -- from how we run our business, to how we treat our employees, to how we impact the communities where we do business. (Wright 2007: 47)
In an interview with Patrick Wright in the journal Human Resource Planning (2007), Eva Sage-Gavin Executive Vice President, Human Resources and Corporate Communications, of Gap Inc. had some very candid and compelling remarks:
We think of corporate social responsibility across Gap Inc. In four strategic ways. The first one is this whole idea of sustainable solutions in our supply chain. This consists of working on a four-part strategy to improve working conditions, monitor factories, integrate labor standards into our business practices, and collaborating with outside partners to drive industry-wide change....The second is with our employees and making Gap Inc. A place where people can flourish and build their careers in a positive work environment. The third is community involvement, including everything from our foundation to our volunteerism. The fourth key area in corporate social responsibility for us is environment, health, and safety. (Wright 2007: 46-47)
Wright has also noted that the GAP was one of the first retailers to release a social responsibility report that not only touted the company's strengths in this area, but its weaknesses as well, a SWOT report on corporate responsibility that allowed for complete transparency into the successes and failures of the company. This transparency is another key tool in the abandonment of the old school regime's hide and seeks policy of deception and malpractice.
Another component that has prompted many corporations to address social responsibility in a proactive fashion is the impact of negative publicity on the company. This can often have quite a detrimental effect on the bottom line of the corporation.
...This is due to its high credibility as well as the negativity effect, a tendency for negative information to be weighted more than positive information in the evaluation of people, objects, and ideas (Mizerski, 1982). Because the media has a preference for reporting bad news (Dennis & Merrill, 1996), companies are more likely to receive bad press rather than positive press. (Dean 2004: 193)
Quite often, with the depth of reporting and the ardour of the media, spin doctoring is no longer enough. It is often incumbent upon the leadership to extol the virtues of social responsibility and implement programs and initiatives that will be transparent to the public and engender a feeling of good will and responsible behaviour (Plummer 2005).
One such initiative, the Global Health Fellows program developed by the Pfizer Corporation in 2002, is an excellent example that combines a program of international corporate volunteering which at once attempts to integrate the pairing international partnerships in capacity building with the concept of employee volunteering and enrichment:
The Global Health Fellows Program was created in 2002 as a corporate philanthropy initiative to develop the capacity of local health organizations in developing countries. Pfizer managers also believed that employees would gain opportunities for professional growth through the challenge of working in multicultural and low-resource settings. (Vian, Mccoy, Richards, Connelly and Feeley 2007: 31)
Not only does this project aid in a world-wide program to improve healthcare, but also benefits the personal and professional lives of the employees who volunteer for the program.
CSR also depends on the correct perceptions of who the stakeholders are as regards the company's social responsibility. These involve persons or organisations that are both inside and outside the company. Internally, stockholders require appropriate returns on their investments; employees seek a wide range of job satisfactions; unions seek benefit for their members and so on. Externally, customers want value for their money; suppliers search for trustworthy buyers; governments demand adherence to legislation; competitors want a fair playing field; local communities need corporations to be responsible citizen; and the general public has the overall optimistic expectation that the business must improve their quality of life, just to name a few. (Sims 2003)
In order to accomplish this task of addressing concerns for the involved parties Ronald Sims, the author of the book, Ethics and Corporate Social Responsibility: Why Giants Fall
Gives companies a checklist to start their search for a socially responsible corporate ethic:
1. Identification of the stakeholders
2. Understanding the stakeholders' specific claims vis-a-vis the company
3. Reconciliation of these claims and assignments of priorities to them 4. Coordination of the claims with other elements of the company (2003:40)
It also must be remembered that corporate responsibility is not a new idea, but began life as the need for ethical owners of businesses to give charitably to those in need and create the aura of stewardship rather than ownership as regards a corporation. Most recently the concept of CSR was nurtured by criticism and an increased distress over the social environment as well as the changing social contract between the corporation and the world. (Sims 2003) Now, several of these organisations have responded with a renewed commitment to social responsibility that has led to an increased corporate empathy toward stakeholders and improved internal and external ethically responsible performance.
There are certainly different perceptions by companies as to the importance of a CSR initiative. These are often conflicting and diametrically opposed views ranging from CSR as being of vital importance in order to achieve the corporation's financial objectives as well as the previously discussed advantages of risk management. Still other companies see CSR as strategic in and of itself as a moral responsibility and not simply a financial outcome. Yet, still others do not place any importance at all on CSR inside the framework of the overall mission of the business. (Husted and Allen 2006) Different cultures also have different takes on CSR, for instance:
U.K. And U.S. firms mentioned ethics codes more often than their Dutch and French counterparts. With regard to the U.S., this observation may reflect the strong U.S. Protestant background (Vogel, 1992) and of the American tendency to codify social relations with rules (Weaver, 2001). Given that Europeans have long been skeptical of the moral role of businesses, it is understandable that European firms are not eager to highlight the moral standards by which they should live (Maignan and Ralston 2002: 498-99)
It is important to address each situation as unique, even though there is always the tendency to impose one's ethical views on another country or culture.
Sources Used in Documents:
Berkhout, Tom. 2005. 'Corporate Gains: Corporate Social Responsibility Can Be the Strategic Engine for Long-Term Corporate Profits and Responsible Social Development.' Alternatives Journal, January/February, pp. 15-22.
Carroll, B.A. 2004 'Managing ethically with global stakeholders: Annual Editions' Business Ethics 06-07: Contemporary Learning Series 30, pp. 114-120.
Dean, Dwane Hal. 2004. 'Consumer Reaction to Negative Publicity: Effects of Corporate Reputation, Response, and Responsibility for a Crisis Event.' The Journal of Business Communication 41:192-201.
Dickens, Charles. 1912. A Christmas Carol. Chicago: Rand McNally.
Cite This Term Paper: