...To what extent is CSR beneficial to a company’s performance? The area of corporate social responsibility has been laid great emphasis recent year. Corporate social responsibility means a company concerns its business operations in an environmental-friendly way and interacts with its shareholders and customers voluntarily (Commission of the European Communities, 2001, as cited in Dahlsrud, 2008). Nowadays a large quantity of international companies have issued their CSR report and designed separate websites about their CSR performance in order to run a better business. However, opponents believe the relationship between CSR and company’s performance is neutral (Aupperle, Carroll, & Hatfield, 1985) and CSR’s benefit to a company’s performance is not obvious. As a matter of fact, even CSR performance can’t be measured easily and numerically in most cases, its benefit to a company’s performance is significant. In this paper, the elaboration will cover three most important dimensions: brand value enhancement, employee attraction and consumer relationship nurturance. To begin with, brand value will be enhanced by CSR performance. The study result of Melo and Galan (2011) shows that CSR has a positive impact on brand value. They chose a group of American corporates as target. Meanwhile, they set CSR and brand value as control variables and build a model to set up a connection between them. The numerical result shows the positive correlation of CSR performance...
Words: 1226 - Pages: 5
...To what extent is Corporate Social Responsibility (CSR) beneficial to a company’s performance? CSR—A double-edged sword for company’s performance Starting from the refined corporate social responsibility (CSR) strategies issued by the European Commission in 2011, a stinging debate is being aroused on the influence of CSR to the whole society. The most influential critic is Noble Prize winner Milton Friedman, who regards CSR as a waste of stockholders’ money (1970). However, many other articles claim, opposite Friedman, that CSR actually improves companies’ financial performance in the long run (Bagnoli and Watts, 2003; McWilliams and Siegel, 2001). There are plenty of arguments on CSR’s influence on company’s performance. As far as I am concerned, CSR plays as a double-edged sword in company performance. The definition of CSR is quite easy to understand. According to Business for Social Responsibility (BSR), CSR is defined as “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment.” McWilliams and Siegel (2001:117) describe CSR as “actions that appear to further some social good, beyond the interest of the firm and that which is required by law.” These suggest that a socially responsible corporation should take a step forward and adopt strategies and business practices that go beyond the profit requirements and contribute to some social-friendly activities. However, when companies choose to engage in CSR...
Words: 2667 - Pages: 11
...THROUGH MUTUALLY BENEFICIAL CORPORATE SOCIAL RESPONSIBILITY INITIATIVES C.B. Bhattacharya Daniel Korschun Sankar Sen Forthcoming: Journal of Business Ethics Abstract Corporate social responsibility (CSR) continues to gain attention atop the corporate agenda and is by now an important component of the dialogue between companies and their stakeholders. Nevertheless, there is still little guidance as to how companies can implement CSR activity in order to maximize returns to CSR investment. Theorists have identified many company favoring outcomes of CSR, yet there is a dearth of research on the psychological mechanisms that drive stakeholder responses to CSR activity. Borrowing from the literatures on means-end chains and relationship marketing, we propose a conceptual model that explains how CSR provides individual stakeholders with numerous benefits (functional, psychosocial, and values) and how the type and extent to which a stakeholder derives these benefits from CSR initiatives influences the quality of the relationship between the stakeholder and the company. The paper discusses the implications of these insights and highlights a number of areas for future research. 1 STRENGTHENING STAKEHOLDER-COMPANY RELATIONSHIPS THROUGH MUTUALLY BENEFICIAL CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Corporate social responsibility (CSR), or “a commitment to improve community wellbeing through discretionary business practices and contributions of corporate resources,” (Kotler...
Words: 10255 - Pages: 42
...MGMT314: Lecture 12 / chapter 9 Ethics and Corporate Social Responsibility ETHICS * Ethics concerns principles of right or wrong conduct * The moral principles and values that govern the behaviour of people, firms or Govt. regarding what is right and what is wrong * Being truthful * Demonstrating integrity of character * Not cheating customers * Not harming people and trading with decency BUSINESS ETHICS * Involves the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel * Are not materially different from ethical principles in general because business actions have to be judged in the context of society’s standards of right and wrong * Ethic behaviour in business requires adhering to generally accepted norms Why study ethics in business? * Ethical behaviour is simply the right thing to do. It is often prescribed within law and regulations * Ethical behaviour is demanded by customers, govt. and the news media. Unethical firms risk attracting unwanted attention * Ethical behaviour is good business, leading to enhanced corporate image and selling prospect. Firms with strong reputations have an advantage when hiring and motivating employees, partnering and dealing with foreign governments. * Related issues * Bribery (over US$1 trillion in bribes is paid around the world) * Kickbacks; illicit payment made to someone in return for facilitating...
Words: 2576 - Pages: 11
...To what extent is CSR beneficial to a company’s performance? Corporate social responsibilities (CSR) and its influences on business success has been a controversial topic over the last few decades but it is not until 1988 was CSR officially stated in the Malcolm Baldrige Criteria for Performance Excellence (Foote, Gaffney & Evans, 2010). Proponents point out that socially-responsible company will be more likely to be financially successful, while critics contend that CSR is contradictory to the most innate characteristic of business, which is to strive for profit. In fact, there are numerous approaches to CSR, but the term is generally defined as the sustained commitment to pursue business growth ethically while generating comprehensive improvement on the living standard of society (Holme & Watts, 2000). This paper is going to uncover the impact of CSR on business performance by examining its potential benefits on sustainability, revenue generation and feasibility for corporations in various scales. First of all, implementation of CSR tends to make the company more sustainable. According to the World Business Council for Sustainable Development, “CSR contributes to the long-term prosperity of companies and ultimately its survival” (Holme & Watts, 2000, p.3). For example, Toyota, being one of the world’s leading car producers, has committed to environmental responsibility in many areas. In particular, having anticipated the finite nature of fossil fuels and with the...
Words: 1235 - Pages: 5
...Should CSR be used as a Marketing Tool by Producers in the Cosmetics Industry? ABSTRACT The purpose of this paper is to prove that CSR can be used as a positive approach in the area of marketing and promotion, particularly in the cosmetic industry. The paper substantiates this hypothesis by drawing on theory from scholarly articles and literature and analysing data from annual reports. A portion of the research is dedicated to the Body Shop, based on analysis of their annual reports, as well as the reaction of different stakeholder groups based on several literatures. The paper finds that there are positives and negatives in using CSR and promoting it using marketing depending on the consumers’ perceptions. It also finds that there exists an information asymmetry between producers and consumers in terms of CSR for their products. The paper supports previous ideas that CSR is useful in benefitting the company brand and value and that it can also be used to influence a consumer’s purchase decision of the cosmetics. INTRODUCTION In conceptual theory, CSR is how a company incorporates “social, environmental and economic issues into their values and business operations in a transparent and accountable manner” (FAITC, 2012). In simple terms, CSR is the actions that a company undertakes or doesn’t undertake during their business functions to benefit society and their stakeholders. There are many arguments for and against CSR and also differing views on whether it actually “pays”...
Words: 3361 - Pages: 14
...Why are ‘Corporate Social Responsibility’ strategies important for enterprises? Prof. Dr. Jose M. Magone LV 400591.01 Work, Business & Society Berlin, 2011 Abstract Nowadays, the importance of social responsibility activities is growing awareness for companies.It is directly related to your business and if you want to have long term business success, you have to create value for the society.People are aware of the social and environmental problems of society.In this technology time, it is so easy to reach the information whatever they want They always follow the daily news from the world and care about them.Due to the fact that paying for the strategies of CSR increases attention to the corporation.Companies’ understanding of social responsibility should always be the part of their investment strategy.They should regard the “Corporate Social Responsibility” as a business management philosophy not as a social activity.It definitely provides sustainability to the business.The purpose of this essay is to explain why “Corporate Social Responsibility” strategies are so important for enterprises.Firstly I will explain the theoretical information about criterias and framework of CSR and then I will support the facts by giving examples from the international companies to clarify the reasons of importance well. Index of Abbreviations The abbreviation used throughout on this essay is presented below; CSR – Corporate Social Responsibility ...
Words: 3409 - Pages: 14
...CHAPTER 1 INTRODUCTION 1.1 BACKGROUND INFORMATION Corporate Social Responsibility (CSR) as a concept entails the practice whereby corporate entities voluntarily integrate both social and environment upliftment in their business philosophy and operations. A business enterprise is primarily established to create value by producing goods and services which society demands. The present-day conception of corporate social responsibility (CSR) implies that companies voluntarily integrate social and environmental concerns in their op¬erations and interaction with stakehold¬ers. The notion of CSR is one of ethical and moral issues surrounding corporate decision making and behaviour, thus if a company should undertake cer¬tain activities or refrain from doing so because they are beneficial or harmful to society is a central question. Social issues deserve moral consideration of their own and should lead managers to consider the social impacts of corporate activities in decision making. Regardless of any stake¬holders’ pressures. However, some arguments that the contri¬bution of concepts such as CSR is just a reminder that the search for profit should be constrained by social considerations (Manuel and Lúcia, 2007) and increasingly CSR is analysed as a source of competitive ad¬vantage and not as an end in itself (Bran¬co and Rodrigues, 2006). In effect, the concept of CSR has evolved from being regarded as detrimental to a company’s profitability, to being considered as some¬how benefiting...
Words: 15594 - Pages: 63
...Preliminary Draft - Comments Welcome CORPORATE SOCIAL RESPONSIBILITY: DOING WELL BY DOING GOOD?* RAY FISMAN GEOFFREY HEAL VINAY B. NAIR# Abstract We provide a framework for analyzing corporate social responsibility (CSR). Our model of CSR in this paper has two important ingredients – CSR is at least in part a profit motivated decision; and different CSR activities are aimed at different audiences. We examine the implications of our framework using a ‘visible’ CSR index that captures consumeroriented CSR. We find that CSR is more prevalent in advertisingintensive (consumer-oriented) industries, and CSR is more positively related to profitability in these industries. Further, the effect of CSR on profits is stronger in competitive industries, especially when few other firms undertake such actions, suggesting that CSR may be used as a means of differentiation in otherwise competitive environments. We also find tentative evidence that the profit effects of CSR are more positive when large external shareholders are on the board. Finally, we document that different types of CSR activities targeted toward different audiences appear to be unrelated. The authors thank Franklin Allen, Randall Morck, Michael Roberts and Jeremy Stein for discussions. # Fisman and Heal are at the Graduate School of Business, Columbia University and Nair is at The Wharton School, University of Pennsylvania. 1 * In the business community, Corporate Social Responsibility (CSR) has emerged as a significant...
Words: 7214 - Pages: 29
...Samsung – Stages of Corporate Citizenship Corporate Social Responsibility (CSR) as part of business strategy has shown increased prominence in contemporary business world. On a daily basis the roles corporations play in society are scrutinized by the media who constantly lookout to report on scandals, corporate misbehavior or, the positive contributions businesses have on society (Crane, 2008). Induced by this, corporations are facing increasing pressure to legitimate their practices and take account of the impact they have on society, which has led to the emergence of what Crane (2008) refers to as a ‘CSR Movement’. The concept of CSR emerged in the 1960/70’s as an American Doctrine that has popularized in recent decades due to the emergence of factors including globalization and the rise of global/transnational corporations (Jenkins, 2005). Attitudes around this concept have also altered from viewing CSR as a philanthropic exercise to a concept/practice necessary for corporate survival. The latter point can be supported by a numerous examples of organizations that have not complied with ethical/socially responsible standards, such as Nike, who faced numerous allegations of unethical conditions at its overseas suppliers in the 1990’s (Zadek, 2004). It is virtually impossible to define CSR due to the every-evolving nature of the concept. Various sources including academics, articles, and websites tackle, and all produce unique definitions of the concept. Crane, Matten...
Words: 4538 - Pages: 19
...Strategic Corporate Social Responsibility Geoffrey P. Lantos Professor of Business Administration Box D-55 Stonehill College North Easton, MA 02357 June 2001 Phone: 508.565.1205 Fax: 508.565.1444 E-mail: glantos@stonehill.edu 1 The Boundaries of Strategic Corporate Social Responsibility Keywords Corporate social responsibility (CSR), Roles of business, Stakeholder theory, Ethical CSR, Responsibilities and duties, Altruistic CSR, Strategic CSR, Abstract Reviews the development of the corporate social responsibility (CSR) concept and its four components: economic, legal, ethical, and altruistic duties. Discusses different perspectives on the proper role of business in society, from profit making to community service provider. Suggests that much of the confusion and controversy over CSR stem from a failure to distinguish its ethical, altruistic, and strategic forms of CSR. On the basis of a thorough examination of the arguments for and against altruistic CSR, concurs with Milton Friedman that altruistic CSR is not a legitimate role of business. Proposes that ethical CSR, grounded in the concept of ethical duties and responsibilities, is mandatory. Concludes that strategic CSR is good for business and society. Advises that marketing take a lead role in strategic CSR activities. Notes difficulties in CSR practice and offers suggestions for marketers in planning for strategic CSR and academic researchers in further clarifying the boundaries of strategic CSR. Introduction...
Words: 20025 - Pages: 81
...CHAPTER 1 WHAT IS CSR? eople create organizations to leverage their collective resources in pursuit of common goals. As organizations pursue these goals, they interact with others inside a larger context called society. Based on their purpose, organizations can be classified as for-profits, governments, or nonprofits. At a minimum, for-profits seek gain for their owners; governments exist to define the rules and structures of society within which all organizations must operate; and nonprofits (sometimes called NGOs—nongovernmental organizations) emerge to do social good when the political will or the profit motive is insufficient to address society’s needs. Aggregated across society, each of these different organizations represents a powerful mobilization of resources. In the United States, for example, more than 595,000 social workers are employed largely outside the public sector—many in the nonprofit community and medical organizations—filling needs not met by either government or the private sector.1 Society exists, therefore, as a mix of these different organizational forms. Each performs different roles, but each also depends on the others to provide the complete patchwork of exchange interactions (products and services, financial and social capital, etc.) that constitute a well-functioning society. Whether called corporations, companies, businesses, proprietorships, or firms, for example, for-profit organizations also interact with government, trade unions, suppliers,...
Words: 12285 - Pages: 50
...Positive Impact of Business Ethics & Corporate Social Responsibility On an Organization Abstract Corporate social responsibility and business ethics have become the focus of an increasing amount of attention from the business sector and academicians following the scandal-ridden era of Enron and others during the 1990s. Although the findings from the research to date are mixed, there is a growing body of research in this area that has lent support to the notion that ethical business practices and corporate social responsibility initiatives have a positive impact on companies in terms of profitability as well as other less quantifiable areas. This review of literature examines these issues systematically to identify current trends and to describe the positive impacts that ethical business practices and corporate social responsibility programs can have for companies of all sizes and types. The Positive Impact of Business Ethics and Corporate Social Responsibility on an Organization To act in a socially responsible way requires organizational leaders to consider the effect of their decisions on the well-being of society; thus, managers must ask themselves what their actions do to society and what their actions do for society. – Ronald Sims, Ethics and Corporate Social Responsibility: Why Giants Fall 2003, p. 66 Chapter Two: Review of Literature The epigraph above makes it clear that today, there is a growing recognition among the business community that they...
Words: 4724 - Pages: 19
...[1]. What are the challenges regarding corporate social responsibility that companies in the apparel industry face in its supply chains around the world? Since the apparel industry is a labor intensive industry, it is one the most susceptible industries to the issues faced with regards to corporate social responsibility (CSR). The apparel industry is basically focused on providing timely efficient production and overlooks the corporate social responsibility it is entitle to serve. Unfortunately these industries tend to be labor intensive while operating on a low wage system. These industries are inclined to look at establishing their production units in countries where the wages are low, Hence there is very less contact between the workers and the company’s higher authority. This is basically where the problem arises when there is a middle person / manufacturing unit head that is getting the work out of the labors. These mid level employees are seen to be harassing the workers to work all seven days of the week, punish them for no reasons, pay below average wage scale and go to extreme extents as to not providing basic amenities such as even toilets or drinking water. [2]. Discuss the meaning and implications of the statement by a Nike representative that “consumers are not rewarding us for investment in improved social performance in supply chains”. In the eyes of the consumer, the high price for products would be the outcome of high quality raw materials, brand name and also...
Words: 758 - Pages: 4
...Responsibility Management 2015 PGPM 2015-17 Section D Group 9 1. Arijit Nayak (15P189) 2. Gaurav Gupta (15P199) 3. Mounica Chilla (15P209) 4. Puneeth Putcha (15P219) 5. Sarin Babu (15P229) 6. Vishal Garga (15P239) Introduction In today’s world of cut throat competition, business thrives on customer satisfaction. Satisfaction of the customer is based on its perception and interpretation of the product and the brand. With world of uber-fast informational age; it has become imperative for all corporate to not only manage quality but to look at collective responsibilities while doing business. This is achieved with Total Responsibility management. Total responsibility management refers to systems and procedures to ensure responsible business practices and management. It is used to describe the codes of practice and systems that organizations are developing to manage their social, environmental, and ethical responsibilities in response to pressures from stakeholders, emerging global standards, general social trends, and institutional expectations. Need of Responsibility Management Companies know that product or service quality affects their customer relationships and the trust customers have in the company’s products and services. So too a company’s management of its responsibilities to other constituencies affects its relationships with those other stakeholders and the natural environment. Never has it been easier for employees, reporters, activists...
Words: 12789 - Pages: 52
