Is corporate social responsibility a way to cover exorbitant charges?
There are different definitions that have been provided to for Corporate Social Responsibility (CSR). Most writers refer to CSR as an organization’s sense of commitment to the environment and community both socially and ecologically whereby they ensure a reduction of waste products, institute different social programs that are geared towards ensuring the overall wellbeing of the society. It can also be said to be an initiative by a corporation to take charge of their social and environmental wellbeing. The initiatives of CRS often go beyond those that are desired by different environment protection groups and regulators in the company in question. The ideal standing of CSR is that they often spend an amount of money towards other activities that do not proof to be beneficial to the company immediately. It is an ethical undertaken which ensure a positive outlook of the company towards its surroundings. CSR is used as a way to cover high charges by corporations, and assists in improving the companies’ image and also improve the community where the companies are situated. To make arguments on whether companies use CSR as a way to make coverage of their exorbitant prices, it is, however, vital to understanding the motivations behind it and the reasons why most people are against its use.
Motivation of CSR
Most organizations make use of CSR as an ethical tool, which helps them to contribute effectively towards the development of the regions’ they are situated. They perform various activities to the community while taking care of their employees, their families, and their stakeholders. When operating under the premise of CSR, businesses often tune their operations to have a positive impact on the society. The concept of CSR lies in the concept of operating under the ethical standards and legal constraints of the company and society at large. There are two important motivations that are used by most companies when instituting CSR in their organizations. Ethical reasons and self-interest are the most motivations behind CSR in most companies as they aid their desire of working with the program.
Under self-interest, most organizations often enter into different activities that are important to their stakeholders because they can benefit in the long run. Companies under this conceptual thought often begin by introducing new operations or activities that benefit the society and also become beneficial to them while they are operating in their normal operations. For example, a company can decide to provide clean energy when there is a high demand for such a provision, after a sensitization or campaign program towards clean energy. From this scenario, it is possible for the company to benefit in a similar way to their stakeholders.
Under the ethical nature of businesses, most of them know that it is important to do well while in their societies because it is their ethical responsibility. Such businesses often provide various products, funding, and services to the community, employees and stakeholders with minimal considerations to their profits at the end of their operating periods. Such a provision portrays the business entity just like other normal individuals who might want to be ethically right and do well to others while in the society without expecting any returns.
While it is true that organizations often engage in the provisions of CSR due to self-interest, it is also unlikely that they will be involved due to their ethical backgrounds. This is because most of them will be going against the business standards and principles that stand for profit maximization. For companies that are traded publicly, it is vital to note that if they content to operate under the premise of ethics when doing their CSR activities, they might create conflicts with their shareholders, who perceive such activities as reducing their dividends.
The social responsibility of a business has always been known as to increase profits and never to have a positive outlook in the community though various activities. Privately owned corporations often undertake CSR because they have limited constraints from other members in the organization. Most of them have different reasons for undertaking CSR, but the majority of them do it to ensure a positive outlook that will help them benefit in the long run.
Arguments for CSR
Through innovations, corporations often provide new ways of doing things and an overall improvement to the living standards of individuals in the society. Such innovations might be the instituting different ways of reducing environmental degradation, and this is in a position of helping the society and the company at large both in the short run and long run periods. Businesses often pursue the idea of innovations through research and development, and this is a fact that actively improves their overall wellbeing in the society.
The idea of cost saving often arises when companies endeavor to undertake CSR when different practices are undertaken in a company; they often make use of new technology, which are efficient, hence minimal costs. Such provisions have been seen by critics as helping both the society to achieve their desire in a low price and increased profits for the companies involved. Most companies also make use of CSR to make sure that they are heard or known to be in existence by the community and other individuals who might want to have their products and services in the long run.
Such brand differentiation methods can be used by the company to make their provisions unique compared to those of their competitors leading to increased sustainability and increased profits in the long run. Such provisions make critics deny the use of CSR and only allow companies to work towards achieving their normal goal of increasing profits without making them look better in the eyes of their customers.
Further, it is also important to note that most companies often engage in different activities in the name of CSR to ensure long-term interest of becoming popular in the future. They often enter into different operations to make sure that their brands are recognized and stay in the market and minds of people for longer periods. CSR can also be used by companies to communicate to their clients with the aim of informing them of some important things for them. The companies can use such forums and inform the clients about their provisions and how they are viable, an idea that will help them campaign for their products and services. Through the CSR provision, employees can also communicate with their customers better and inform them of the company’s provision and also identify with their company’s policies hence improving productivity.
Arguments against CSR
Most critics are against CSR and often provide different conflicting information that pertains to the operations of CSR in organizations. Most of them contend that the irrelevancy of CSR can be seen when companies decide to align their profits and interests in the long run. When companies start operating in a particular sector, they often desire to make profits and increase their clientele base, and not provide free services to them as a way of being ethically right. If business operations are inclined towards making profits, they can never engage in other activities that will make them loose or reduce their profits in the long run.
Other writers have contended that most business operations make use of CSR to misdirect and distract the public from various activities that they perform, and most of which are illegal or not ethical. Businesses that are monopolies might decide to charge exorbitant prices, but cover such provisions through the provisions of different CSR activities that will make them look better. Other companies might also enter into the provision of different CSR activities while producing goods and services that are harmful to their clients. Companies that produce cigarettes and alcohol often have harmful products, but engage in CSR and through this make themselves popular in their regions of operation.
It is clear that most organizations enter into the provisions of CSR practices for the interest of the society and their operations as a whole. Most of them not only desire to help the community but want to benefit themselves through misdirecting the public in the case of harmful products or by reducing their costs of operation. This can not apply to all companies as most privately owned companies enter into CSR activities to benefit the society; they often have an ethical background towards their practice of CSR. It is, therefore, clear that CSR is a way to cover exorbitant charges by different corporations, and can only be used for such a role at the end of the day.