Category: Social Responsibility

Introduction

In the application of conceptual framework, standard setters have come up to many standards. The despite its importance, conceptual framework has received relatively little attention in the setting standards of financial reporting standard-setters. Thus, in making measurement decisions, standard-setters focus on applying the definitions of financial statement elements and the qualitative characteristics of accounting information in the context of the objective of financial reporting. Application of those concepts has resulted in a variety of measurement bases being used to measure financial statement amounts. These include historical cost, amortized historical cost, fair value, and value in use, among others.

The basis of preparing the generally accepted accounting standards emanates from financial accounting standards board concepts and statements that are known to create conceptual framework. This conceptual framework that is used in preparing financial accounting reporting standard as come under criticism from various academician and professionals. Concepts and statements that are used in coming up with financial statements include concepts of prudence, consistence, matching and accrues basis. Before we explore the critic point of view lets look at how this accounting concepts are framed.

The accounting concept are highlighted as follows objectives of financial reporting by business enterprises this explain the goals and aim preparation of financial statement or accounting report going to describe main uses as creditors and shareholders. It does not define other stakeholders who are most crucial. They go a head to classify users into present and potential with assumptions that these users have reasonable knowledge of accounting and they understand business and economic situations prevailing at the country and at time of reporting.

For the analyst, the conceptual framework is an important building block in understanding information provided by financial statements. The conceptual framework delineates the characteristics accounting information must possess to be useful in investment and other economic decisions.

It further defines objectives of financial reporting as to be used in making in decisions about investments giving of credit and when to sell the share. It also assumes that it will help them as assess the timing and uncertainty of cash flow in an organization.

A hierarchy of accounting qualities source figure 1 of FASB concepts statement no 2. Qualitative characteristics of Accounting information.(adapted from White G. I, Sondhi A. C. and Fried D.)

Statement of financial Accounting Concepts (SFAC) 1, sets forth the objectives of financial reporting. While statement of Financial Accounting Concepts (SFAC) is concerned with the Qualitative characteristics of Accounting Information.

Qualitative characteristics of Accounting Information. Analysts concern with the qualitative characteristics of accounting information derives from the need for information that facilitates comparison of firms using alternative reporting methods and is useful for decision-making. Although some of these characteristics are self-evident, others require some explanation. We start with relevance and reliability, key characteristics from the analyst point of view.

Relevance is defined as the capacity of information to make a difference in a decision. In practice, of course, the relevance of information depends on the decision maker. To a technical analyst, all financial data are relevant. For fundamental analysts, the relevance of information varies with the method of analysis.

Timeliness is an important aspect of relevance. Information loses value rapidly in the financial world. Market prices are predicated on estimates of the future; data on the past are helpful in making projections. But as time passes and the future becomes the present, past, past data become increasingly irrelevant.

Reliability is encompasses verifiability, representational faithfulness, and neutrality. The first two elements are concerned with whether financial data have been measured accurately and whether they are what they purpo0rt to be. Data without these characteristics cannot be relied on in making investment decisions.

Neutrality is concerned with whether financial statement data are biased. FASB proposals are frequently the object of complaints that companies will be adversely affected by the new standard. The principle of neutrality states that the board should consider only the relevance and reliability of the data, not any possible economic impact.

Unfortunately, relevance and reliability tend to be opposing qualities. For example, the audit process improves the reliability of data, but at the cost of timeliness. For that reason, financial statement users have generally not supported the auditing of quarterly data, believing that the time delay does not compensate for any improved data quality.

Relevance and reliability also clash strongly in a number of accounting areas. Market value data investments may be highly relevant but may be accurate only to a limited extent. Yet historical cost, although highly reliable, may have little relevance. It is old argument as to whether it is better to be precisely wrong or approximately right.

Analysts have generally opted for approximately right. They have supported the disclosure of supplementary data in such areas as natural resources off balance sheet financing and segment data. Auditors and prepares, more concerned with reliability, have often opposed the inclusion of less reliable data in the financial statements.

Consistency and comparability are also key characteristics of accounting information from the analyst perspective. Consistency refers to use of the same accounting principles over time. A broader term, comparability, refers to comparisons among companies. Consistency is affected by new account standards and voluntary changes in accounting principles and estimates. Accounting changes hinder the comparison of operating results between periods when the accounting principles used to measure those results differ. As the transition provisions of new accounting standards vary, it for such changes. For voluntary changes the effect of the change is generally disclosed only for the year of the change.

Comparability is a pervasive problem in financial analysis. Companies are free to choose among different accounting methods and estimates in a variety of areas, making comparisons of different enterprises difficult or impossible. Although the FASB has narrowed these differences somewhat in recent years, new types of transactions create new sources of non-comparability. Even when accounting differences do not exist, however, comparability may be missing because of real differences between the firms.

Worldwide accounting standards setting decisions relate to conceptual framework especially that of measurement. Therefore, conceptual framework helps standard setters to set standards this is based on the measurement concept. The accounting framework lack rules on the measurements. As accounting, concepts that are used assist in decision making to accounting setters. With the emergence of international accounting reporting convergence due to internal expansion of business , International Accounting Standards Board and Financial Accounting Standards Board are working together to improve conceptual frameworks for accounting setting.

Accounting for Managers

Accounting for managers entails corporate social responsibility. Corporate social responsibility is the duty and moral obligation of corporate to other stakeholders. Corporate social responsibility refers to moral rights and wrongs of any business transaction or decisions. The moral responsibility of corporate depends on the nature of business and the individuals involved. Business organizations have adopted various ethical policies because they believe in showing the neighborhood their moral responsibility and in the process they have increased their sales.

Corporate social responsibility like any other concept is to be discussed broad terms. The concept of corporate social responsibility has been in existence since 1953 when it was introduced in American corporations. Its basic premises of ethical obligation have made managers and shareholders to own self interest in business transactions. Any manager who incurs business transactions will consider and address the needs of the society. Corporate social responsibility revolves around four basic theories which include social contract theory, social justice theory, rights theory and deontological theory.

Social contract theory: There exists a series of explicit and implicit contracts between individuals, organizations, and institutions forming central tenet of social contract theory. Tenet of social contract theory assumes social contracts evolve around an environment of trust and harmony. Corporations enter contracts with the society to receive resources and societal acceptance to operate in exchange for harmony.

Social Justice Theory: Social justice theory, examines the fairness in distribution of societal goods and services. Social justice theory argues that a fair society are considered, by of distribution of social goods. Corporate managers, have a responsibility in ensuring these goods have been appropriately being distributed in society.

Rights theory: Rights theory deals with the rights of various members of the society, including basic human rights and property rights. Corporate managers should not interfere with property rights and human rights of members of the society. Shareholders of a corporation who have certain property rights should not affect human rights of employees, local community members, and other stakeholders.

Deontological theory: Deontological theory assumes that everybody has a moral duty to treat everyone else with respect, including listening and considering their needs. This belief is for everyone, including corporate managers, shareholders and other stakeholder. Corporate social responsibility gives reasons why managers should work towards sustainable development.

Importance of social responsibility

Social responsibility is important as it takes care of accounting part of social activities to other stakeholders. Traditional accounting standard only caters for accounting for one or two stakeholders. The inclusion of social responsibility accounting setting will help in reducing the companies costs of trying to make decisions on how to account for them.

References

Barth, M. E. 2004. Fair Values and Financial Statement Volatility, in The Market Discipline Across Countries and Industries, Edited by Claudio Borio, William Curt Hunter, George G. Kaufman, and Kostas Tsatsaronis. Cambridge, MA: MIT Press.

Barth M.E. (2006); Standard-Setters, Measurement Issues and the Relevance of Research Graduate School of Business Stanford University and International Accounting Standards Board.

Landsman, W. R. 2005. Fair Value Accounting for Financial Instruments: Some Implications for Bank Regulation. Working paper. University of North Carolina, Chapel Hill.

Storey, R. K., and S. Storey. 1998. The Framework of Financial Accounting Concepts and standards. FASB: Norwalk, CT.

International Accounting standards Board. 2006. Preliminary Views on an Improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and the Qualitative Characteristics of Decision-Useful Financial Reporting Information. London, UK.

Financial Accounting standards Board. 2006. Statement of Financial Accounting standards No. 157: Fair Value Measurements. Norwalk, CT.

Introduction

To begin with, it is important to establish that the communitys main economic activity is hunting. People from the Zulu community are mainly hunters and gatherers. The main avenue where the community interacts is during social actives which are highly valued. The Zulus conduct festivals throughout the year and have a culture of brewing beer.

Every individual, business entity, or organization has a responsibility to act or have activities that benefit society as a whole. Social responsibility includes the activities that are carried out for the benefit of the community. Such activities include garbage control, measures to control environmental and noise pollution, to mention but a few. This research is done to evaluate the Zulu community in South Africa and establish how social responsibilities affect this community.

Type of people in the community

The communitys population is mainly of local unemployed members who are financially unstable and also academically un-empowered (South African History Online, 2012). Setting up a business entity around the communitys territory requires the management to uphold a sense of social responsibility. First of all, owing to the financial challenges that the community faces, the most reasonable social responsibility that a company has is to have the members of the Zulu community secure jobs in the company.

It would be so insensitive for an organization to set up in the Zulu community and yet import labor from elsewhere. Other ways of showing goodwill and to gain the confidence of the surrounding community would be offering financial support for infrastructural developments and projects. Developing infrastructure in the area would be a perfect investment that will benefit the entire community, including the company itself.

Communitys responsibility

The community, on the other hand, has a responsibility to loyally abide by the spirit of working together for the greater good of both parties. The community should respect the companys policies and support it by promoting and consuming its products. Security is a threat to every business, and the community is responsible for the surrounding organization by showing goodwill and protecting the company against robberies and other perils.

With the support of the community, the organization will be able to thrive due to the mutual benefits achieved by the two parties. The essence of being socially responsible is protecting both the interests of the community as well as that of the organization.

Organizations social responsibility

Being a hunting community, the organization is responsible to ensure that they protect the wild life. (South African History Online, 2012) Any activity that compromises the well being of the wild life would most probably be met with an overwhelming opposition from the community. Tree planting and conserving the natural habitation is a responsibility the organization has to take. Keeping the environment clean is also the organizations social responsibility. Most companies will always have waste products from their activities.

The best way to show responsibility is to ensure the company effects an effective dumping policy to get rid of the waste in ways that will not compromise the communitys health. Carbon emissions are a long-term pollution but also have more severe repercussions.

Conclusion

The Zulu community is an illiterate population (South African History Online, 2012). There are no schools and the members of the community are uninformed. The organization should invest on supporting locals to secure an education and sponsor them. This would raise the locals probability to secure better jobs in the company and improve locals confidence with the organization.

References

South African History Online. (2012) Zulu Community. Web.

Levermore (2011) presented an empirical study depicting the association between CSR and sports as aspects fueling economic and social development. The research was conducted to address the paucity and dilemma apparent in relation to the evaluation of CSR. The results had the capability to avail vital information on how development was realized from CSR and sports as well as to fill the gap of knowledge in this respect. Essentially, the researcher indicated that there was insufficient evidence demonstrating such literature. In this regard, the article assessed how the level in which CSR aiming at development via sporting activities had been performed in the FIFA 2010. This process involved the review of literature and collection of secondary data that was used to complement the discussion. Mainstream evaluation was handled using experimental designs on comparison between the recipient benefactors and non-recipients. These aspects were followed by deep analysis of the development on the lowest class. The final examination involved literal analysis of reports and empirical studies as well as the backgrounds relating CSR to sports while striving towards development. The research excluded most self-sponsored sports activities since they were not proper samples for CSR. After conducting an assessment on the present strategies of the mainstream development, the researcher identified that they were oriented on management tactics. Therefore, the common manner in which development aroused from unequal state of power was not represented. The research found scarcity of studies addressing this concern whether related to the sports or not. Furthermore, he noted that such areas of study as development and management sciences had a lot to offer within the sports field.

This research considers adequate literature and embarks on its evidence to affirm the validity of claims. Apart from using 68 reliable sources to retrieve the literatures and backgrounds, the researcher uses tables to evaluate the data and information from them. The delivery of information has been organized professionally to meet the demand of the reader. For instance, the titles and subtitles are short and direct to relay a direct implication to the target readers. However, the article avails no standard formation of empirical study. For instance, it is hard to trace the number of empirical studies evaluated to provide a set of answers to a problem. Furthermore, the relationships between the literatures and the prevailing studies have no clear connections where the relevant finding should be used. The information is scattered and fails to meet the standards of formal and integrated analysis. This aspect implies that the researcher did not manage to present the interconnectedness of CSR and sports in the developments.

The research study may play a basic role for my future research topic. The area of CSR has not been studied properly especially in regard to sports. Therefore, it can be an area where new research ideas may arise. Furthermore, the research presents literature and arguments that may be used on the basis of my study review. It offers rare information on corporate social responsibility and how it relates to sports in facilitating development. In fact, it is an article that creates distinction between social and economic development. In this regard, it is a viable and reliable source of enlightenment about sporting. It lays a baseline of benefits attributed to world cup major events and results of hosting the events in a nation. Finally, it shows how sports participate in the social and economic prowess of a nation as a result of foreign income from tourists.

Reference

Levermore, R. (2011). The Paucity of, and Dilemma in, Evaluating Corporate Social Responsibility for Development through Sport. Third World Quarterly, 32(3), 551-569.

Introduction

This dissertation aims to measure the level of consumers awareness about CSR (corporate social responsibility) in such countries as the United Kingdom and Qatar. On the whole, this concept is relatively new; it came into existence at the end of the twentieth century, particularly, in the late eighties. According to it, any company or organization must pursue not only its own financial interests but consider the welfare of the community as well (Idowu & Filho, 2008). It is quite possible to argue that in advanced economies the role of customers and their attention towards the ethical side of the business have become immense mostly because their markets have passed through many stages of evolution, while in developing states the principles of CRS have not been popularized (Belal, 2008). Yet, this is just a hypothesis that may be either substantiated or refuted.

Literature Review

At first, it is critical to review the literature available on this topic. At this stage, the key task is to compare the definitions and interpretations of corporate social responsibility, trace its evolvement from the historic perspective (Besser, 2002; Harrison et al 2005). Secondly, we need to describe international practices: namely, how the tenets of CRS are implemented in different regions of the world. Finally, we will need to examine current CSR policies in the UK and Qatar (or other Arabian Gulf countries) as well as peoples interests and attitudes toward them. The study of scholarly works will give us a better understanding of this issue and also set the stage for further research. It can help during the construction of the survey and analysis of the findings.

Research methodology

Statistical Survey In the course of this investigation, the statistical survey will be the main method of collecting information. The sample population will be approximately one hundred people both in the UK and Qatar. In this research, we intend to apply the method of stratified sampling, which means that the subjects will be selected according to certain criteria; namely, educational background (the minimum requirement is college degree) and income level. Undoubtedly, such an approach can lead to bias but it is the only possible way to carry out this research. The thing is that we need to interview people, who can understand the concept of CSR as well as its constituent parts. Furthermore, they need to be sufficiently well-to-do in order to qualify as consumers of goods and services. The data collection will be done either face-to-face or via the Internet.

The participants will be asked questions on a wide range of topics, for instance, their opinion about civil liabilities of private companies and the ethical side of their business. Secondly, it is necessary to inquire whether consumers pay attention to the firms operation standards such as environment protection, the safety of labor, hiring policies, charity, participation in the life of the community, and so forth. We will also examine their views on ethical consumption. The questionnaire should also investigate media coverage of CSR issues in the UK and Qatar (For more detailed information please refers to the Appendix).

The survey would rely on the use of closed questions, which require only a short answer. We intend to employ a five-item Likert scale in order to better capture and describe clients awareness about CRS. It should be borne in mind that the survey must not contain too many questions; fifteen or twenty will suffice. A larger number would significantly slow down the process of research and most importantly it would be more difficult to engage the participants.

Findings and analysis

At this stage, our major task is to identify whether there are any similarities and distinctions in the level of consumer awareness and concern for corporate social responsibility in the UK and Qatar. We shall need to score and describe Likert items and identity the response average. It is necessary to analyze items separately because each of them reflects a particular aspect of this problem such as attitude towards the policies of the business, level of awareness, media coverage of CSR, and so forth.

Case Study

It may be helpful to describe a particular situation that illustrates the relationship between customers awareness of CSR and the policies of private businesses. For this purpose, we will select an international company that operates both in the UK and Qatar (or other Gulf countries) and describe its participation in public life in these countries. Namely, we will compare its production and labor standards, concern with environmental protection, charity, and so forth. Additionally, it will be necessary to uncover the reasons why this firm has adopted such policies. Our primary goal is to determine whether its practices depend on the specific region or these variables are not connected with one another.

Conclusion

Provided that this investigation is carried out effectively, it will measure the level of consumers awareness about CSR in two countries that differ from each other in terms of economic development, political system, and cultural tradition. This study can also identify the similarities and distinctions existing in public opinion. The research can be further continued. For instance, we can focus on those factors which shape peoples opinions of corporate social responsibility. The results of this study can be employed for practical purposes such as attracting peoples attention to the practices of the companies.

References

Babbie, E. R (2009). The Practice of Social Research. Wadsworth. Cengage Learning.

Bethelehem, J. G (2009). Applied Survey Methods: A Statistical Perspective. New York: John Wiley and Sons.

Belal, A. R. (2008). Corporate Social Responsibility Reporting in Developing Countries: The Case of Bangladesh. Burlington: Ashgate Publishing, Ltd.

Besser, T. L. (2002). The Conscience of Capitalism: Business Social Responsibility to Communities. Westport: Praeger.

Corbetta P. (2003). Social research: theory, methods and techniques. New York SAGE.

Evers, H. Schrader H (1994). The Moral economy of trade: ethnicity and developing markets. New York: Routledge.

Idowu S. O. Filho W. L (2008). Global Practices of Corporate Social Responsibility. New York, Springer.

Harrison, R. Newholm T. Shaw D (2005). The ethical consumer. London: SAGE

May, T. (2001). Social Research: Issues, Methods and Process. Philadelphia: Open University Press.

Tully, S. (2007). Research Handbook on Corporate Legal Responsibility. Edward Elgar Publishing.

Appendix: Questionnaire

1. Do you think that private companies must bear civil responsibilities?

   1. Strongly Agree;
   2. Agree;
   3. Neither Agree nor Disagree;
   4. Disagree;
   5. Strongly Disagree
2. Do you think that companies should primarily follow ethical principles rather than commercial ones?

   1. Strongly Agree;
   2. Agree;
   3. Neither Agree nor Disagree;
   4. Disagree;
   5. Strongly Disagree.
3. Do you agree that consumers must consider the policies of a particular business while buying a certain product?

   1. Strongly Agree;
   2. Agree;
   3. Neither Agree nor Disagree;
   4. Disagree;
   5. Strongly Disagree.
4. While choosing a product or service do you pay attention to the organizations labor standards and workers rights?

   1. Always;
   2. Frequently;
   3. Occasionally;
   4. Seldom;
   5. Never.
5. Do you think it is necessary to reject the companys goods or services if it pursues unethical marketing strategies, and violates of environment protection laws?

   1. Strongly Agree;
   2. Agree;
   3. Neither Agree nor Disagree;
   4. Disagree;
   5. Strongly Disagree.
6. Do you agree that corporate social responsibility is essential for the welfare of the community and effectiveness of the enterprise?

   1. Strongly Agree;
   2. Agree;
   3. Do not know;
   4. Disagree;
   5. Strongly Disagree.
7. How often do hear about corporate social responsibility in mass media?

   1. Always;
   2. Frequently;
   3. Occasionally;
   4. Seldom;
   5. Never.
8. Do you believe that consumers should be more aware of companys social responsibilities?

   1. Strongly Agree;
   2. Agree;
   3. Neither Agree nor Disagree;
   4. Disagree;
   5. Strongly Disagree.
9. Should the government enhance social responsibilities of the private business?

   1. Strongly Agree;
   2. Agree;
   3. Neither Agree nor Disagree;
   4. Disagree;
   5. Strongly Disagree.
10. Do you take interest in the social activities of the companies, operating in your country?

    1. Always;
    2. Frequently;
    3. Occasionally;
    4. Seldom;
    5. Never.

Introduction

Sustainability in business is increasingly becoming a necessity in the corporate world with the UN and affiliated organizations emphasizing on the need for organizations to adopt policies and systems which promote the same. The goals of sustainability such as ending poverty, pollution prevention, waste reduction, quality education, gender equality, reuse and recycling, clean energy, and community development have become the mirror in which business performance and necessity is measured. Corporate social responsibility which is one of the means of achieving the UN sustainable development goals is taking shape and becoming an important aspect in business practices. In promoting Sustainable development objectives such as community development, quality education, environmental conservation and gender equality, organizations must adopt policies and systems which can help them incorporate the CSR in their day to day activities. With strategic decisions in respect to leadership and positioning, companies must oversee their present and future objectives aligning to global CSR and being in convenient position for promoting the same. The report therefore analyzes the policies and systems adopted by Cold Chain Federation in promoting CSR and the sustainable development goals in general.

In establishing the global corporate social responsibility as practiced in Cold Chain Federation Company, the report analyzes the aspects of the business organizational structure such as the leadership style and management structure and how they assist the company in contributing to CSR practice. Additionally, policies and systems such as operational, knowledge management, performance management and control are analyzed to see how they help in strategic decisions which are critical for the same. The companys strategic resources and positioning which form additional factors are assessed. Cold Chain Federation by successfully practicing corporate social responsibility has proved to have made strategic decisions laced with favorable policies and well positioning to achieve the fete.

The report is made of two parts: the first part forms the empirical framework which outlines the methodology used in the data collection and analysis. The second part makes up the theoretical framework which consists of the findings from the research including the strategic decisions, policies and systems, organizational positioning, ethical approaches, strategic resources, and any other fact that assist in the companys realization of CSR and contributing to sustainable development goals in general and provides recommendations which outline the future global strategic and ethical road-map for the companys growth and development for the next five years.

Methodology

Since the purpose of the paper serves to answer the question of how businesses factors such as policy, strategic decisions, positioning and strategic resources are contributing to CSR and sustainable development goal at large using Cold Chain Federation as an example, case study method is the best methodology to use. The problem demands an in-depth analysis of the chosen business setup by analyzing the various aspects of organizations such as the structure, positioning, resources, performance, and inspirations towards the strategic decisions. This makes the report to consider the case study method as the most appropriate for the Cold Chain Federation. The report will look at the Cold Chain Federation Companys resource from raw materials, through to the manufacturing, storage, distribution, and retail and assess how each stage plays a role in CRS and sustainable development goal in general. In addition, it will look at the various energy sources used by the company and how the sources promote CRS goal. Besides, the report looks at the contribution of the business towards community development through its various activities, events, actions and by cooperating with the government through compliance.

To get more information about the companys development and strategic decisions in response to corporate social responsibility, an interview was done with the one of the departmental managers to give a comprehensive explanation on how Cold Chain Federation is getting right in its journey towards CRS and what policies, and strategic decisions the company has made and making to ensure they take part sufficiently in corporate social responsibility and achievement of sustainable development goals. To have detailed information, it was appropriate to engage an insider in the management level who takes part in some decision making processes and who understands the objectives and culture of the business. The research questions were developed in a manner which targeted a broad and detailed response to enhance better understanding of the companys policies and how they work for the objective. Since the interview was unstructured, four open questions were laid down:

1. What is the companys chosen global strategic CSR and ethical approach and initiatives towards achieving it.
2. What is the business policy, system, and process in response in enhancing the chosen CRS
3. How does the companys positioning help it to integrate CRS
4. What is the companys sustainable goal in the next five years

To obtain more information concerning Cold Chain Federation, a content analysis was carried out on different journals. In addition, additional information about the company was obtained from the organizations social media accounts and webpages which highlighted the business leadership structure, employees, activities, policies, performance, economic contributions and the vision.

The below case study analysis of Cold Chain Federation cover some of the aspects which contributes to practice of CRS in the company: the chosen global strategic CRS, the strategic resources, policies, systems and processes, positioning, and ethical road-map for future sustainability and growth.

Sustainable Development Goals of Cold Chain Federation Company

Cold Chain Federation is a business in the supply chain which deals in the transport and delivery of processed products. Dealing in specifically in pharmaceuticals and food products, Cold Chain Federation transports the product from their initial source of extraction or growth, delivers to the manufacturing and processing points and then finally to the retail shops where they meet the consumers. Understanding supply chain is a critical stage, the company is using technology to ensure the transported products are kept in safe and proper state during their delivery. The organization provides an efficient, unique, unmatched space with temperature-controlled storage systems. To enhance the distribution process, the company provides advisory and regulate their business partners in the supply chain. Operating in UK where the quantity of frozen and chilled food from the food industry translates to huge billions, accumulating to 8 and 11 billion euros respectively, Cold Chain Federation has a massive task of keeping the food safe and in edible state.

Cold Chain Federation is one of the major employers, employing thousands of people across UK and the neighboring regions. With several warehouses spread across the country, the business is absorbing many individuals as warehouse operators. In addition, the company is absorbing more individuals as drivers and assistants in their numerous delivery devices. The organization is contributing to environmental conservation by reducing food waste dumping. With the global community wasting a significant amount food, waste related to food products constitute a third of all the environmental waste, making food waste a global environmental catastrophe. Determine to conserve the environment, the Cold Chain Federation ensures the wastes are well taken care of to prevent their adverse impact on climate. The company has develop a robust, profitable and sustainable temperature-controlled logistic services to reduce food spoilage.

Besides reducing food wastage as measure for environmental conservation, the company is coming up with new refrigeration systems characterized by low ammonium discharge to reduce dangerous emission in the environment. In addition, clean energy sources have been developed by the company in the effort to mitigate carbon concentration and climate change. The clean energy sources developed by the company are promoting the lean alternative energy campaign. The company is partnering with the government to reduce the fuel energy consumption which has heavily contributed to climate change. In cooperation with government agencies, the organization organizes economic events to inspire talents by sponsoring sporting activities.

Selected CRS in Cold Chain Federation

Food Waste Management and Clean Energy

Cold Chain Federation is committed to corporate social responsibility through environmental conservation by reducing food waste. Food waste contributes to climate change globally considering a third of environmental waste comprises of food-related products. Due to factors such as poor storage, bad weather, and overproduction, global community has failed in managing food with a significant quantity ending up as waste. This has contributed to climate change in most parts of the world. Cold Chain Federation through its role in the supply chain is tackling the problem in an effort to conserve the environment. By an efficient, unique, robust and temperature-controlled delivery service, the company is dealing with the massive food waste. In addition, the company is using the available technology to develop environment-friendly refrigeration systems to assist in delivery and keeping food products fresh. The new technologically-motivated refrigeration systems discharge very low amount of ammonium thereby reducing environmental pollution.

Besides food waste reduction, the Cold Chain Federation is contributing to environmental conservation through the use of clean energy campaign. As a role model, the company is shifting to alternative clean energy sources. Being a logistic company, the Cold Chain understands the delivery devices significantly contribute to environmental pollution and the consequent climate change, the organization partnered with like-minded businesses to develop clean energy sources. The firm is partnering with the UK government to advance the clean energy campaign while playing the role model. As one of the ethical approaches, Cold Chain Federation is providing advisory and regulating business partners in the line supply chain such as the producers, manufacturers, retailers and consumers to avoid food wastage and proposing alternatives including the ammonia-less refrigeration systems and establishing various warehouse operatives in strategic points.

Policy, systems and Process related to Global Strategic CSR

Appropriate Organization structure

Cold Chain Federation is a delivery company in the supply chain. To ease operation and promote efficiency, the business is divided in various departments which distinct functions, and each sector a playing a role in ensuring corporate social responsibility. The warehouse operative is one of the departments which collect and accumulates food products and ready them for delivery (Tatum et al., 2007). Stationed in strategic positions, the warehouses receive food products from the production level and keep it fresh to prevent spoilage which leads to wastage. Fitted with suitable refrigeration systems with low ammonia discharge, the warehouses stores the food properly, preventing wastage which contributes to climate change.

The Delivery Department

The delivery department comprises of the drivers and personnel operating the transport devices. This department contributes to corporate social responsibility by providing a robust and efficient delivery services under a controlled-temperature to ensure the transported food products are not spoiled during transportation which may lead to climate change. The transport devices are properly fitted with temperature regulating devices to keep food fresh thereby avoiding wastage.

The Technological Department

The department is contributing to environmental conservation through various innovations. The department has done well in innovating environmental-friendly developments to assist in environmental conservation by reducing food wastage. For instance, Cold Chain Federation is playing a leading role in reducing food wastage through the temperature-controlled transport devices and the ammonia-free refrigeration systems. Besides, the company is one of the leading players in clean energy campaign. With the help technology, the organization is developing lean alternative sources of energy which aim to reduce climate change.

Organizational Control Systems

Besides the organizational structure, the company is using organizational control systems to monitor its performance in relation to corporate social responsibility of waste management. Using the various control systems such as output control, behavioral and clan control, the business is able to track its performance by identifying areas of concerns and strength, and then address the concerns. Using output control system, the company is monitoring its performance in respect to the level of food waste reduced and identifying the challenges faced in the course. Behavioral control system on the other hand has been used by Cold Chain Federation to monitor, dictate, and influence the behavior of its employees and business partners, reminding them on the duty of food waste reduction (Jansen et al., 2011). The behavior control system is used by the company to advise and regulate the behavior of the business partners and ensure they contribute positively to reducing food waste. Partners such as producers, retailers, consumers, and manufacturers are regulated and advised accordingly. Clan control system is used for creating a culture of proper food management to reduce food waste which contributes to climate change.

Knowledge Management

Cold Chain Federation in its commitment to reducing food waste by providing logistics, the organization has become a market leader in food supply chain. To ensure it continues in the right path, the business is organizing events such as business forums and innovation conferences to nurture talent and promote knowledge sharing (Galbreath, 2006). The events are open to participation by any interested organization intending to contribute to sustainable development goals.

Organizational Positioning

Cold Chain Federation is strategically positioned in the market in the supply chain department which enables it to reduce food waste. By providing logistics, the company is in a better position to reduce food waste by coming up with measures that ensure food products are properly preserved. The positioning of the business has enabled it to develop robust storage facilities which have significantly helped in reducing food waste. Temperature-controlled storage facilities and ammonia-refrigeration logistic systems are examples of developments which have been developed by the company in an effort to reduce food waste (Hendry, 200). Besides, the positioning of the organization is also making it position for advising and regulating players along food products. With the positioning, the company will find it easier to influence proper food management by playing the role model. In the era where the global community is moving towards sustainable development goals, Cold Chain Federation will highly benefit.

Conclusion and Recommendations

Corporate social responsibility is an important aspect in business. With the global community shifting towards sustainable development goals, every business should be looking towards the same. Cold Chain Federation in the supply chain has done wonderfully in corporate social responsibility through robust logistic services by reducing food waste which is a significant contributor in climate change. Going forward, firms in the supply chain should emulate the company and development mechanisms which promote food management such as the ammonia refrigeration systems. In addition, reducing food waste should not be left for the delivery firms alone, but extended to domestic consumers. The proper storage facilities such as the ammonia-free refrigeration systems should be adopted in various home setups.

References

Galbreath, J. (2006). Corporate social responsibility strategy: Strategic options, global considerations, Corporate Governance: The international journal of business in society, 6(2) pp. 175-87. Web.

Hendry, J. (2000). Strategic decision making, discourse, and strategy as social practice. Journal of Management Studies, 37(7).

Jansen, RJ, CurÅxeu, PL, Vermeulen, PA, Geurts, JL & Gibcus, P. (2011). Social capital as a decision aid in strategic decision-making in service organizations. Management Decision, 49(5) pp. 734-47. Web.

Tatum, BC & Eberlin, RJ. (2007). Leadership, ethics, and justice in strategic decision making. Business Strategy Series, 8(4), pp. 303-10. Web.

Appendix

Future Global Strategic and Ethical Road-Map

As stated in the ISO 26000 guidelines, when enterprises act in an ethical and fair way, they contribute to the development of social welfare. Ethical conduct implies fair recruitment and HR activities, implementation of green technologies, charity, consideration of needs and interests of diverse stakeholders. By following the principles of corporate social responsibility (CSR), not only organizations can improve their performance, but also generate multiple benefits for consumers and the society as a whole. When speaking of Host Europe, one of the largest German web hosting enterprises, throughout the time of its existence, it demonstrated the understanding of ethics and CSR and continually tried to enhance its performance in the given areas. However, there is still room to grow. The major CSR issues identified by the management of Host Europe include underrepresentation of female employees, insufficient staff awareness of green practices, inefficient energy consumption, and inadequate supply chain management.

The statistical data indicates that along with the expansion of business operations and profitability growth, there was a significant increase in the level of energy consumption in Host Europe. Throughout the period from 2005 to 2009, the consumption of electric power increased sevenfold. The numbers emphasize the importance of energy efficiency endeavors in the company. Until the current moment, the measures to improve energy efficiency undertaken by Host Europe included the construction of energy-efficient facilities, implementation of certified technologies, and virtualization which fostered a more efficient use of hardware. Overall, these strategies allowed the management to attain greater ecological sustainability, e.g., save over 9.000 tons of carbon dioxide per year. However, to achieve even better results, the company should also address the issues of employees awareness of energy efficiency practices. For this reason, the management should improve knowledge management practices; design training and education programs; create databases where all staff members will be able to locate information on ecological sustainability; enforce policies, and emphasize the significance of energy efficiency through the integration of new values into the corporate culture.

Host Europes orientation towards fair recruiting and HR practices points that the management acknowledges the importance of the companys employees and tries to encourage their commitment. The fact that women are currently underrepresented in the organization may indicate that the enterprise applies some discriminatory HR management practices or it may reveal the overall social discriminatory and stereotyping tendencies. Host Europe may improve the situation through the implementation of advocacy programs aimed to promote the employment and payment equality and motivate women to engage in the field of information technology. In this way, the company could also resolve the issue of limited social commitment. As it is mentioned in the case study, the participation in different awareness-raising events is one of the ways for Europe Host to embrace its CSR.

The core principles of CSR are accountability, transparency, ethical conduct, respect for law, human rights, and ecological regulations. It is possible to say that Host Europe largely succeeded in implementing those principles. If the organization continues to integrate CSR values throughout the organizational units and processes, e.g., enforce voluntary initiatives, increase supply chain sustainability, build awareness in all employees, etc., it will become able to generate extra benefits such as positive reputation, competitive advantages, employee retention, increased productivity and employee morale. It this way, the companys financial performance will be improved and, additionally, Host Europe will make a significant contribution to the promotion of social well-being.

Introduction

The role of corporate social responsibility (CSR) has been increasing continuously in the business concept within the last years. According to Bueble (1), the prominence of CSR in recent years is shown by the fact that 90% of the fortune 500 companies have explicit CSR initiatives today and an increasing number of companies that that report and communicate on corporate social responsibility (1).

The concept of corporate social responsibility (CSR) has lately become common within regional businesses in the kingdom of Saudi Arabia and also the media circles. According to Tamkeen, the economy of Saudi Arabia has business leaders who embrace values of good generosity on social engagement which provides an environment that is conducive for advancement of Corporate Social Responsibility. This also encourages the businesses in Saudi Arabia to play an effective role in developing the local society and economy.

Saudi companies do not face much adversarial tensions as compared economies of developed countries and this make them to get along well with the society. The supply-chain pressures that emerging economies like China face also does not affect Saudi Arabian companies. This makes it easier to engage in CSR initiatives (Boeger 92). The efforts put to CSR initiatives by the Saudi companies are initiated by the desire to address the urgent challenges facing the country, chief among them creating employment opportunities for s growing young population and addressing the skills gaps needed for a diversified economy (Tamkeen 1).

The challenges have created competitiveness among the Saudi companies responding to the entry or World Trade Organization that opened up the country for Foreign Direct Investment. This is a great opportunity for companies within the Kingdom of Saudi Arabia to come up with CSR strategies which will help the local communities and at the same time meet corporate goals. Despite having this golden opportunity, Saudi companies have some weaknesses on their CSR approaches. One of the challenges is the lack of systematic and organized strategies within the most companies to address the social issue in the right manner.

There are also no policies and organized structures for CSR that will make it easier to carry out, manage and communicate. The adverse effects of business activities on environment and health are largely neglected and unrecognized. These issues are also not completely brought to the attention of the media, regulators, consumer groups or researchers who are the right people to address the issue. The objective of this paper is to present a literature review on the application of CSR in the kingdom of Saudi Arabia.

Literature review

Application of CSR in the kingdom of Saudi Arabia

Saudi Arabia is a region that is highly reliant on oil as the main source of revenue. However, the private sector is currently playing a significant role in the diversification of the economy. Recent studies reveal that the private sector contributes to about 73% of non oil GDP. Saudi also has the largest domestic market in Arab region. Saudi has a relatively large GDP per capita and this gives it an opportunity to emerge as the regional power house.

The kingdom has corporations that can internationally be ranked among the largest. Most of these large corporations are owned by government and families (Alajlan 165). It is challenging that only about 50 of the large corporations in Saudi Arabia are listed in the stock market. There is also weak of corporate public reporting and this together with other challenges poses a challenge to studying and executing corporate practices (Naser and Nuseibeh 46). This also becomes an issue in the carrying out of corporate social responsibilities.

According to Emtairah, Al-Ashaikh, and Al-Badr (8), there is little academic literature written about the corporate social responsibility in Saudi Arabia. While compared to other emerging economies like China, Malaysia, South Africa and Brazil, Saudi Arabia is not fully explored in terms of involvement in CSR activities (Visser 476). The Arabic literature is scanty in the area of CSR since it s even difficult to get companies involved in CSR activities to family ownership of most companies.

Most studies that have been done have indicated that there is low priority given to social and environmental aspect of business enterprises and business leaders. According to Carroll (3), concurs with previous studies and concludes that most managers do not do not view CSR as their responsibilities and they argue that social objectives are less important than economic objectives. They take social objectives as a burden that should be shouldered by the government.

In recent years however, At-Twaijri, Al-Ghamdi and Luqmani (261) found out that following the Gulf War and the weakening of the Saudi economy, the corporate social responsibility has become prominent and has been ranked high among the goals of the corporations in Saudi Arabia. The states in the Gulf region gave social services to their people ad also provided to them education and health care services.

The oil revenues were used to finance these programs and therefore the business community was not encouraged to pursue social objectives. The Post-first Gulf War was characterized by the deterioration of economies and oil prices making the quality of social services that governments were providing slump in quality. Saudi Arabia was among the states adversely affected. This created the need to involve the private sector in developing the agenda of provision of social services.

Mallin (1), Corporate Social Responsibility (CSR) has gained an increasing high profile in recent years. The tern CSR could be defined as the ways in which a business seeks to align its values and behaviors with those of its various stakeholders. These stakeholders may include the employees, customers, suppliers, government, interest groups and wider societal interests on whom the operations of the business may have an impact.

In the contemporary world, Corporate Social Responsibility is the language under which the role of business in society in business is discussed and debated (Emtairah, Al-Badr, and Al-Ashaikh, 1). Though the term might seem unfamiliar to people in Saudi Arabia, there is much business- society interdependence taking place. It is believed that the Saudi business can play a significant role in developing Saudi Arabia through the social responsibility programmes. The kingdom has faced many development challenges.

The issue of giving back to the society is not a new thing among the Saudi businesses. The CSR language is used in the Kingdom to address the proactive nature on the part of the businesses to address the social consequences of the business activities and also put in insight to development needs. The study by Emtairah, Al-Badr, and Al-Ashaikh (1) indicates that the companies in Saudi Arabia are more engaged in social issues than what is usually published.

This lack of complete dissemination of CSR activities in Saudi Arabia has underrepresented Saudi CSR in international benchmark. The measures used have therefore shown that the companies in Saudi Arabia are doing too little in the field of Corporate Social Responsibility. This challenge however has not deteriorated the business leaders stance on the importance of CSR to the success of the society and the businesses. This shows that the rationale of Saudi companies for their CSR activities is still upheld.

According to Emtairah, Al-Badr, and Al-Ashaikh, The use of the term CSR may be new in the Saudi Arabian context, but the underlying connections and interdependence between business and society are indisputable in a market economy (1). It is recognized that businesses need a healthy society for them to succeed and vice versa. According to Porter and Kramer (78), the responsibility of ensuring a healthy business and society are intertwined and that it is a complex role.

According to The National Commercial Bank (1), many organizations in the Kingdom of Saudi Arabia have been carrying out CSR activities which have created consumer trust, community development, sourcing and retention of employees, and improved the financial performance of the companies. The study by The National Commercial Bank, in conjunction with YouGov Siraj revealed that there is currently widespread awareness about the corporate social responsibility in the kingdom of Saudi Arabia.

The report further found out that the priority given to CSR in Saudi Arabia is largely dependent on the geographical area and the specific community needs. The stakeholders interviewed during the study revealed that there is positive impact of CSR in the region. Mostly, the companies concentrate on charitable giving that is meant to improve the standard of living of the needy people in the region. Other CSR activities carried out in the region include initiatives that positively impact unemployment and encourage entrepreneurship in the region.

The main challenge in this case is to communicate the value of the CSR strategy and activities to the relevant group of people so that they can understand the value of the activities. The CSR activities are regarded as being paramount in serving the people that are more unfortunate in the society and also create religious fulfillment in the region. It has also been found that the organizations that are involved in CSR in the Kingdom of Saudi Arabia have developed a positive image in the society and also created loyalty with their customers and workers.

CSR Activities in Saudi Arabia and the Impact of Their Application

There has been a lot of effort put to enhance awareness of CSR throughout the kingdom of Saudi Arabia. Company that have been participating in CSR initiatives have majorly concentrated on the area of health, safety and environment which are of major concern in the region. There has also been focus on other areas like ethics and corporate governance, giving back to the communities in which these companies operate and commitment to their workers. The approach given to all these activities depends on the respective organization the norms of the industry in which the organization operate and also what the industry stakeholders expect.

The study carried out by the National Commercial Bank (6) has revealed some major CSR activities that are carried out in the kingdom of Saudi Arabia. The first activity identified is creating job opportunities for the unemployed in the kingdom. There has also been encouragement on entrepreneurship and attempt to conduct anti-smoking campaigns to end the smoking habit in the regions. The companies also conduct other activities like medical support, providing training to the physically challenged, providing computer literacy to the people among others. Despite this effort, there are still some areas that have been neglected and where CSR awareness is significantly low. For example, womens programs, anti obesity campaigns and career counseling are the areas not satisfactorily addressed in the CSR initiatives.

Most studies have revealed that CSR activities have positive impacts on the reputation, image and creating royalty by a company. It promotes good corporate reputation and also enables the company to attract more customers and increase market share. It has also created commitment on the side of employees working for the companies involved in CSR initiatives. The recruitment, retention, motivation, innovation and productivity have also improved in businesses engaging in CSR activities.

Drivers to the application of CSR in the Kingdom of Saudi Arabia

There are a number of factors that have contributed to the allocation of CSR activities in the Kingdom of Saudi Arabia. According to the National Commercial Bank (6), the main drivers of CSR in Saudi Arabia are need for societal improvement or reformation. This is an objective of every CSR initiative and is also embraced by Saudi companies. Also, since Saudi Arabia is Islam dominated society with people with strong faith in Islam, CSR is taken as a way of fulfilling ones religious duties of helping and serving the less privileged and impoverished in the society. This is a strong driver to the application of CSR.

These drivers are those created out of the need to serve the community (Solomon 281). These drivers are also of great benefits to the businesses. These benefits are also drivers on the side of the management of the businesses. These benefits include enhancing corporate reputation, gaining community trust, strengthening the product brands that lead to creating business opportunities, and also gaining approval of government agencies. The government also has a favorable opinion of organizations that engage in CSR activities. According to the National Commercial Bank, Government and charitable organizations appear to positively respond to organizations engaged in CSR (6). Since the government cannot fulfill all the social and societal needs, it tends to support the organizations that help in fulfilling this objective of society betterment.

Conclusion

The issue of corporate social responsibility has recently gained prominence in the kingdom of Saudi Arabia. This has mostly taken place within regional business and media circles. The reporting about the CSR in the news papers has also increased tremendously especially between 2005 and 2006. However, there are some groups of business leaders who still regard CSR as a foreign concept. Though the language of CSR may seem fresh to some people, the connection between businesses and he community has taken roots in the kingdom. The society and the businesses both need each other in their success.

Although there is little literature written about corporate social responsibility, the few researches carried out by proponents like The National Commercial Bank, Tamkeen, Mallin, Emtairah et al among others have revealed that CSR is no longer a mystery among the businesses and the society in the kingdom of Saudi Arabia. However, the initiative has faced many challenges in its development. These challenges include the lack of systematic and organized strategies within the most companies to address the social issue in the right manner.

There are also no well set policies and organized structures for CSR that will make it easier to carry out, manage and communicate. Also, the adverse effects of business activities on environment and health are largely neglected and unrecognized. These concerns are also not completely brought to the attention of the media, regulators, consumer groups or researchers who are the right people to address the issue.

Based on the literature gathered in his paper, it is clear that CSR in Saudi Arabia is taken as a strategy to serve the less unfortunate in the society. It is also taken as a way of fulfilling religious obligations of individuals. The organizations that engage in CSR activities are believed to have a positive image in the community and also have high profile in customer loyalty and employee commitment (Carroll 3).

Another view is that people believe that the CSR is undertaken by companies that are financially profitable and can allocate some money to the initiative. This may raise the creditworthiness of the business (Swanson, 46). The companies that are committed to CSR also attract talented people who also seek to be employed in such organizations. The companys enjoyment of the full benefits of CSR is only restricted by limited awareness about it. Initially the role of CSR was taken as a burden of the government but the private sector has now embraced it.

Works Cited

Alajlan, AlBandari. Ownership structures and Saudi companies: a fact finding Study. Corporate Governance Advances in Financial Economics, 2004; Vol. 9, pp.161186.

At-Twaijri, Mohammad I., Al-Ghamdi, Salem, and Luqmani, Mushtaq. Prioritization of Corporate goals in Saudi Arabia: an exploratory investigation. Int. J. Value based management, 1996; Vol. 9, pp.259270.

Boeger, Nina. Perspectives on Corporate Social Responsibility. Cheltenham: Edward Elgar Publishing, 2008. Print.

Bueble, Elena. Corporate Social Responsibility: CSR Communication as an Instrument To Consumer-Relationship Marketing. Germany: GRIN Verlag, 2009. Print.

Carroll, Archie B. Corporate Social Responsibility: Evolution of a Definitional Construct. Business Society, Vol. 38 No. 3, September, 1999; 38; 268-295.

Emtairah, Tareq., Al-Ashaikh, Asya, and Al-Badr, Abdulmohsen. Contexts and Corporate social responsibility: the case of Saudi Arabia. Int. J. Sustainable Society, 2009; Vol. 1, No. 4,

Emtairah, Tareq., Al-Ashaikh, Asya, and Al-Badr, Abdulmohsen. Saudi companies and social responsibility: challenges and way forward. US: Tamkeen Development And Management Consulting, 2007. Print.

Mallin, Chris A. Corporate social responsibility: A case study approach. London: Edward Elgar Publishing, June 30, 2010. Print.

Naser, Hakki and Nuseibeh, Rishmawi. Quality of financial reporting: evidence from the Listed Saudi non-financial companies. Int. J. Accounting, 2003; Vol. 38, pp.4169.

Porter, Michael, and Kramer, Mark. Strategy and society: the link between competitive Advantage and corporate social responsibility. Harvard Business Review, 2006; Vol. 84, pp.7892.

Solomon, Jill. Corporate governance and accountability. New York: John Wiley and Sons, 2007. Print

Swanson, David. Addressing a theoretical problem by reorienting the corporate Social performance model. Academy of Management Review, 1995: 20, 43-64.

Tamkeen, Asya. CSR Press Release: First Study on Corporate Saudi Arabia and CSR, 2011.

The National Commercial Bank. Corporate Social Responsibility in the Kingdom of Saudi Arabia 2009: National Commercial Bank Surveys Perceptions on Corporate Social Responsibility across the Kingdom of Saudi Arabia. Saudi Arabia: The National Commercial Bank, Corporate Social Responsibility Department, 2009. Print.

Visser, Willem. Corporate social responsibility in developing countries, in A. Crane, A. McWilliams, D. Matten, J. Moon and D. Siegel (Eds), the Oxford Handbook of Corporate Social Responsibility. Oxford: Oxford University Press, 2008. Print.

Definition

Corporate social responsibility is defined as a form of corporate self-regulation integrated into a business model; it is aimed at motivating business entities to voluntarily involve themselves in corporate initiatives, as an alternative to additional or existing mandatory initiatives. It is a form of corporate social regulation integrated into a business model which would function as a built-in, self-regulating mechanism whereby a business would monitor and ensure its adherence to the law, ethical standards, and international norms (Wood, 1991).

Business entities are expected by their immediate society and the government to be responsible for the impact of their activities, as they go about producing their goods and services, on the environment which includes consumers, employees, neighboring communities, stakeholders, and the entire public; by so doing they influence the consumption patterns of their products and services which boost sales and ultimately impact on profit turn over for the organization. Corporate social responsibility promotes the public interest by taking part in development-oriented activities in their communities and live up to ethical standards and expectations; this promotes a sense of responsibility amongst the business entities to an extend they voluntarily eliminate practices that harm their neighbors and the entire public regardless of their legality hence seen as a built-in self-regulating mechanism whereby businesses can monitor and ensure their adherence to law and international norms.

Corporate social responsibility concerns itself with what companies do with their profits as well as how they make these profits, it could be seen as a philanthropic gesture but it goes beyond compliance and addresses how companies manage their economic, social, and environmental impacts as well as their relationships in all key spheres of influence; the workplace, the market place, the supply chain, the community, and the public policy realm (Hess & et. al, 2002).

Abstract

There has been an increasing concern on how organizations can use corporate social responsibility to their advantage in creating a competitive edge in modern marketplaces. The initiative is being viewed as an effective means of establishing and appreciating the fact that, a business entity needs an environment that includes all players in its spheres of influence to achieve economic objectives. The study seeks to explore whether there is a need for an organization to establish a working relationship with the immediate society, peoples attitudes towards the initiative, benefits of engaging in the initiative, and criticisms which would be viewed as loopholes of the initiative.

Introduction

Corporate social responsibility is an initiative aimed at ensuring that business entities do not exclusively engage on fundamental economic gains at the expense of moral and ethical obligations, this implies that, for organizations to thrive in the modern competitive market, it has to establish a state of balance between economic and moral or ethical obligations. There have been cases in which organizations focused on either, but the contentious issue is, to what degree should a company engage in CSR related activities and still remain focused on its main economic pursuit. A good example of CSR at the expense of economic gains is Malden mills decision to continue paying its workers even after the tragic fire incident which had gutted down three buildings out of their eight in Lawrence, Massachusetts in 1995; this eventually contributed to the bankruptcy of the corporation while on the other hand the new management focused on economic gains and catapulted the organization into an international mega-corporation that today is a leader in several industries (Balko, 2004). The question is who deserved the most credit? Is it the management that focused on moral obligations and compensated the workers accordingly despite financial challenges or is it the latter management that focused on the success and eventual expansion of the corporation? Companies are increasingly accepting corporate social responsibility and recognizing the benefits accrued as a result of engaging in related activities to an extend that, there is a paradigm shift on whether to engage like it used to be in the past to how and also how to effectively use CSR to protect organizations reputation and to develop and implement corporate strategy (Smith, 2003).

Reactions on CSR

There have been arguments in support for CSR which can be classified into two broad categories:

• Moral,
• Economic.

Moral Argument for CSR

For any business to exist it has to make profits, but this does not imply a total disregard to the business environment, it is the duty of each business entity to strive in view of adding value and make life better for all the groups in its spheres of influence. Each and every business entity should establish a working relationship with its surrounding environment due to the fact that a business cannot operate in isolation and would need the societal infrastructure, employees and consumers to achieve its objectives. the purpose of a business should go beyond the maximization of efficiency and profits, CSR is a recognition of that interdependence and a means of delivering on that obligation, to the mutual benefit of businesses and the societies within which they are based (Handy, 2002).

Economic Argument for CSR

There are very many economic benefits to a business pursuing a CSR strategy, the economic front is used to persuade those business owners who are not convinced by the moral front to partake in CSR projects. Proponents of this front see the organizations involvement in CSR projects as a key selling point that guarantees a competitive edge on the marketing of products and services. Business entities that engage in strong CSR involvements mostly benefit from increased sales considering the fact that the projects constitute a marketing strategy and in this brand-driven markets it could help or could be used as a means of matching corporate operations with stakeholder values and demands, at a time when these parameters can change rapidly (Handy, 2002).

Economic argument varies from moral or ethical cases in the fact that business case for CSR does not in any way claim it is the right thing to do, but rather it is to the companys benefit if adopted and would provide a competitive advantage if well designed.

Examples of Corporate Social Responsibility

The meaning of corporate social responsibility has remained contentious over the years but there are types of corporate activities that have been singled out as major forms of social responsibility, they include:

• Choosing to operate on an ethical level that is higher than what law requires, indicates that a business entity is not tied by the law to offer certain standards but rather sees it as a responsibility to adhere to its own set quality standards and ethics. This reduces the level of government involvement in regulation to an observer and ultimately guarantees the quality provision of products to the consumers and reduces tensions and mistrust between the government and private organizations.
• Making contributions to civil and charitable organizations and non-profit institutions, most organizations in America and on a bigger scale all over the world contribute immensely to worthy causes in the society to improve reputations and also to be seen to contribute to the well being of the society; this is majorly a philanthropic gesture which could compound to a marketing strategy.
• Providing benefits for the employees and improving the quality of life in the workplace beyond economic and legal requirements, some organizations like Timberland are known to offer family-friendly programs like child care, flexible work programs, and even time off for volunteer work, this clearly indicates a shift from belief in the past when organizations would only offer this services simply because it is lawful to the modern-day belief in which it is out of responsibility and the fact that they feel owed by the society.
• Taking advantage of an economic opportunity that is judged to be less profitable but more socially desirable than some alternatives, this includes organizations shunning from some products simply because they are from endangered species like Home depot on wood and also paying more above-market rates to benefit and groom the sectors in poor countries like it is the case with Starbucks on coffee.
• Using corporate resources to operate a program that addresses some major social problems like improving working standards of employees, suppliers, and the immediate society; and giving donations of drugs, food, or any other product to the less developed countries, which may not bring in economic benefits to the corporations and may even involve sacrificing some profits but would contribute immensely to the betterment of the society.

Benefits

Corporate social responsibility has a lot of benefits to both the organization and the spheres of influence, the following are some of the benefits:

Human Resources

Good programs could be the main sources of recruitment and retention, with the current competition in the job market, favorable CSR program could contribute to successful recruitment and retention through improving the perception of a company among the staff mostly by involving them in the programs; this boosts the sense of ownership amongst the existing employees and provokes interest among potential or prospective employees.

Risk Management

Risk management constitutes a very vital component in development of any business entity, and could be used to build reputations which need to be guarded and protected from all forms of corruption and environmental accidents. A favorable CSR program could build up public confidence within and outside the corporations ultimately offsetting these risks. An example is Johnson and Johnsons transparent handling of the crisis facing its Tylenol brand in 1982, the company went way above the expected recall capacity following a suspected poisoning incident; acting this way the company saved the brand and it has since remained to be a strong revenue earner for the company; a good CSR program or policy would be an effective means of protecting investments and maximizing its impact (Caroll, 1979).

Brand Differentiation

Market places are currently crowded by suppliers of the same or even closely related products, implying that each supplier must have a marketing edge in order to maintain or improve on sales; a good and favorable CSR policy can play a very vital role in strengthening if not building consumer loyalty based on distinctive ethical values. CSR makes consumers feel appreciated and cared for and in most cases they are compelled to reciprocate by being loyal to the organizational products and activities. The modern marketplaces have been defined to be mature, efficient and highly selective, only the top most brands survive the longest in these markets; this implies that a brand differentiation is important in creating a competitive advantage. It could be argued that competitive advantage can be derived from numerous sources but a strategy that incorporates social responsibility is one of the surest ways especially in the modern global economy where differentiation of the companies along with its product from competitors is key. A good example is NIKE international which has established itself to be one of the most progressive global corporations in terms of CSR with a fully pledged secretariat and annual reports; through this it has achieved a lot in mitigating public opinion and established its brand as a representative of a much more committed corporate citizen (McComb, 2002).

License to operate

Issues to do with taxation and meeting some certain laid down regulations can be challenging to organizations and if not well handled could pose a great interference in the running of organizations. It is with this in mind that most organizations would strive to take voluntary steps in view that this would persuade the governments and the entire public that they are taking issues such as health and safety, diversity or the environment seriously as good corporate citizens with respect to labour standards and impacts on the environment, ultimately being granted a clean bill of operation and good will from various spheres of influence (McComb, 2002).

Business Strategy

A good corporate social responsibility could be used as a business strategy in the sense that it builds customers confidence with the organization, and from most experiences, mostly, consumers would prefer to buy products from companies they trust; suppliers wish to only form business partnerships with companies they can rely on; employees want to work for companies they are proud of and respect; and even NGOs want to work together with companies seeking feasible solutions and innovations in areas of common concern; all this could easily be achieved by designing a favorable CSR policy which would incorporate all the major players either within the organization or amongst the spheres of influence and also which would aim at appealing to the environment on transparency and dedication towards serving their interests. Organizations strive to achieve all these in view that they are part of the market as well as in social and political environment in which the corporations operate in, this would ultimately build a strong working relationship between the organization and key players thus improving organizational capacity to make profits.

Leads to reduction in cost through recycling

A good implemented CSR policy would be in a position to help the business unit in tracing worth recycling products after consumption by the immediate society and an organization can easily craft means of collecting these wastes and recycling at a reduced cost other than buying the materials afresh.

Justification of CSR

Business entities do not have an unquestioned right to operate in the society, they have a duty to ensure they make living in their localities better but not to condemn them to the worst living conditions through shrewd means of operation.

Organizations need the society to progress and it is the duty of the top management to recognize this fact; they rely on the society for employees and consumers which are by the far the most important ingredients for successful operation of a business, implying engaging in CSR initiative is a big plus for organizations appeal to their localities.

There is a social contract between business and the society involving mutual obligations that society and business recognize that they each have to the other; for effective operation business needs their immediate society and society stands to also benefit from the operation of these organizations in their localities, probably through improved infrastructure or even ready market for their produce in terms of raw materials.

Business rely on inputs from the society and socially created institutions, it is the duty of the business entities to recognize the importance of this mutual relationship and seek to cement it through giving back to their localities by embracing CSR initiative.

Criticisms

Corporate social responsibility is seen to distract businesses from the fundamental economic role of businesses, which is always aimed at solving fundamental economic problem; setting up rules for allocating resources and/or consumption among individuals who cant satisfy their wants, given limited resources; as businesses strive to comply to this responsibility they tend to invest on this calling ultimately reducing their concentration on key fundamental economic problem. When setting up businesses or any organization, the sole motivation is maximization of returns to either the owner or shareholders in partnerships; this indicates that the business or the organization will only be responsible to the shareholders or the owner and not to the society as a whole.

It is seen to be nothing more than mere superficial window dressing such that businesses use it to blind their environment while in reality they are covering a lot of flaws within the organization. There have been critics who argue that CSR is mostly practiced by organizations such as British American Tobacco (BAT), the petroleum giant BP and McDonalds to sway the public from ethical questions posed by their core operations (Mckibben, 2006), in their view, they claim that organizations purely motivated by maximization of profits are unable to involve themselves in societal responsibilities which would increase their operational costs and ultimately cut on their profit margins.

It is also seen to be an attempt by business entities to pre-empt the role of governments as a watchdog over powerful multinational corporations, laggard firms and governments can sometimes use the existence of corporate social responsibility program to shirk their roles; it is the duty of the government to level the playing field and ensure public welfare through putting the right mechanisms in place aimed at ensuring organizations operate within a laid down framework of policies and uphold laid down ethical standards. For the program to effectively impact a positive contribution to the economy the government and the private sector should strive to put in place an understanding aimed at striking a balance of public and private responsibility and develop new governance and business models for creating social value (Friedman, 1970).

Some critics also see corporate social responsibility as a public relations ploy designed to legitimize or other divert attention from destructive social consequences of corporate activity; when an institution is seen to be involved in taking responsibility over its social challenges like for example ensuring its their obligation not to pollute the environment and to clean up any pollution they cause, governments and policy regulators assume a lot of things with the institution and some destructive social engagements may go unnoticed.

Disadvantages

Corporate social responsibility involves giving money away which would be like a self imposed tax, most organizations aim at maximizing profits at a minimum cost, engaging in CSR activities would result to reducing profit margins thus imposing costs on ones business.

Managers are employed not to generate wealth for the shareholders, not to give it away, it is the duty of the managers to strive and ensure they put mechanisms into place aimed at maximizing profits at minimum costs in order to increase share holders stake in the entities.

To attract quality workers is necessary to offer better pay and conditions and this leads to a rise in standards of living and wealth creation; this would not be possible when organizations are involved in a lot of CSR related activities which involve spending because in most organizations pay packages are based on the profitability of the organization which has everything to do with reduced operational costs.

The only recognized motive of establishing a business or any enterprise is to create wealth by providing goods and services, most organizations may see CSR compliance as an added cost and a deviation from intended direction or objectives of the organization and may be tempted to shun altogether.

Conclusion

There has been a gradual recognition of CSR by most organizations over the last fifty years, its meaning, arguments for and attitudes towards the initiative have been changing and the question on whether to engage has shifted to how and most organizations and business entities are working hard to strategically fit CSR in corporation policies in order to effectively develop programs that maximize on the benefits of the initiative both to the organization and the immediate environment if not the entire society as a whole. Involvement in corporate social responsibility is a fundamental approach to establishing a competitive advantage in the modern market in the sense that markets are mostly favorable to organizations which are responsible in their operations. A favorable and well designed CSR policy guarantees support from the business environment and involves top management or strategic decision makers of the organization for effective policy development and implementation.

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Introduction

Ethics is not something novel for people in business. Nevertheless, until recently, accountability for setting standards for the manner of business and certifying that economic wealth was impartially shared was assumed by governments acting individually or collectively through international institutions. This distribution of responsibilities, however, is speedily changing under the influences of globalization.

This paper scrutinizes these developments. It looks at altering definitions of corporate social responsibility and the emergence of codes of ethics and their function in defining and delivering those responsibilities. It identifies a number of factors that are driving these changes. With the advance of globalization, the outlook that the solitary responsibility of corporations is to earn profits for their shareholders is increasingly hard to uphold. The eradication of corruption, respect for human rights, tolerable working conditions for labour, and healthy local communities are all stimulants to economic growth and development.

Definition of Corporate Social Responsibility

A good working definition can be found in a Conference Board of Canada document entitled Corporate Social Responsibility: Turning Words into Action (1999): Corporate social responsibility is the overall relationship of the corporation with all of its stakeholders. These include customers, employees, communities, owners/investors, government, suppliers and competitors. Elements of social responsibility include investment in community outreach, employee relations, creation and maintenance of employment, environmental responsibility, human rights and financial performance.

The suggestion that business should be conducted ethically is not a new one. Nor is the idea that business should be performed in socially responsible ways. For most of the last century, however, conscientiousness for setting values for the conduct of business and ensuring that economic wealth was shared in some manner across all segments of society was supposed by governments acting individually or cooperatively. In the industrialized countries of Western Europe and North America, democratically elected governments have protected human rights in law.

Welfare safety nets have been put in place to shelter people from the worst effects of unemployment, and measures to defend standards of public health have been instituted. Acting collectively through international institutions like the United Nations and the International Labour Organization, governments around the world have set international human and labour rights standards declared as having worldwide applicability.

By assuming primary accountability for social concerns and environmental standards, governments left businesses free to focus concentration on the generation of goods and services and the maximization of returns. Not surprisingly, this allotment of responsibilities has had noteworthy implications for the apparent role of business ethics and corporate social responsibility. It has tended to hearten corporations to define their social and ethical responsibilities scarcely.

Where ethics is concerned, the business has tended to focus on values important to the conduct of business, namely integrity in financial transactions, value for company property, prevention of conflicts of interest, the honouring of contractual obligations, and respect for the law basic rules of courtesy. For the most part, companies that have gone beyond these rather constricted limits have done so for clearly defined public relations purposes. This slender focus has resulted in corporate codes of ethics fashioned with a vision primarily to protect the firm from the unethical behaviour of its employees.

In the industrialized democracies of the West, this approach to ethics has, until quite lately, not produced grave concerns. People in other parts of the world have fared less well. In developing countries, the proposal that the primary purpose of business was to enrich owners and shareholders has provided companies and their managers with a rationalization for not getting drawn in broader social issues touching on human rights or working conditions, or the quality of life of people in the communities in which they generated their profits.

Ethics in Business

Progressively, top companies are defining their social responsibilities by orientation to their shareholders, but also to their other stakeholders. This, in turn, has pressed companies moving in this direction to define their values and put them into action. To accomplish this task, many corporations have bowed to value statements and codes of ethics. A code of ethics for a corporation is a complex statement that does four things for its directors, managers and employees to govern themselves:

• Firstly it identifies as clearly and concisely as possible the mission or guiding purpose of the organization.
• Secondly, it sets out the core values essential to achieving its mission.
• Thirdly it sets out the principles that are to be respected in all interactions with stakeholders, that is to say, its shareholders, clients or customers, employees and pensioners, suppliers, the local communities in which it does business and others affected by what it does.
• Finally, it sets out rules that are designed to ensure that the principles and values are put into action.

While codes of ethics that have some or all of these characteristics are now quite common, research and experience indicate that they are not enough. What else is then necessary?

Creating a code and failing to take steps compulsory to ensure that the code is treasured can actually encourage unethical and irresponsible conduct. Successful implementation requires a company-wide implementation strategy planned to guarantee that ethical commitments are met all through a companys operations. This means:

1. Effective communication: People cannot respond to an ethics code they do not know or understand. Neither are they likely to take seriously a code that is not publicly and frequently endorsed by senior management, particularly the CEO or a code created without their participation and involvement.
2. Education and training: Education and training sessions give employees at all levels an opportunity to examine typical applications of the code in their particular areas of responsibility and explore the application of the code where the right answer is less than obvious and straightforward.
3. Penalties for non-compliance and rewards for exemplary conduct: If the code is not enforced, it is unlikely to be respected. Penalties that respond to the seriousness of a breach of the code signal commitment to code implementation. Rewarding those who respect the code is also an effective way to communicate a companys commitment to building an ethical corporate culture.
4. Confidential counselling and reporting: Surveys of employees show that one of the most difficult challenges in building an ethical corporate culture is persuading employees that reporting problems or seeking advice on ethical issues will not result in criticism, censure or punishment. A system that allows employees to communicate concerns with a view either to reporting unethical conduct or seeking out advice in a difficult situation is, therefore, an important component of any ethics program. Equally important is feedback from the company detailing how it has dealt with concerns communicated confidentially.
5. Internal monitoring: Like every aspect of effective management, systematically monitoring the success in implementing the ethics code is important. Consistent, effective monitoring can provide valuable quality control information and alert a company to problems before they become serious.
6. Independent ethics and social audits: A final and emerging component of ethics programs, independent ethics audits will be used increasingly to assist management in determining how effectively their ethics code is being implemented and to give credibility to the claims that a company is committed to being a good corporate citizen. In the absence of independent, third-party audits, claims that a corporation is taking its social responsibilities seriously may well be greeted with public scepticism.

Ethics programs with these components can have a significant positive impact on the way companies are viewed both internally by their employees and externally by the public at large. Ethical management impacts employee morale positively. It attracts highly qualified and well-motivated recruits at all levels of operations. It strengthens relations with stakeholders by opening doors to cooperation and dialogue. It can also have a positive impact on share values. Conversely, companies are gradually coming to the realization that unethical behaviour can be financially very costly. It generates stress at all levels of management. It is an open invitation for government regulation. It can damage a companys reputation overnight, and it undermines internal control.

Two examples of major multinational corporations that are actively engaged in building effective ethics programs are General Electric and Shell.

Why CSR is important

Advantages of CSR

Benefits to companies

1. More productive workers.
2. Greater employee loyalty.
3. Higher customer satisfaction.
4. Improved companys image and reputation, conducive to higher sales.
5. Fewer litigation costs.
6. Less volatile stocks.

Benefits to the communities

1. Reinforcement of fundamental rights (health, education, labour rights, etc.).
2. Contribution to the development.
3. Improvement of the environment.

Summary

This private sector/civil society corporate social responsibility and partnership model is now being explored by corporations in manufacturing, resource extraction and retailing around the world. It may well be of value in building capacity on the part of the voluntary sector to monitor corporate conduct and raise public awareness and the public profile of efforts aimed at raising standards of business conduct. These positive trends are new and emerging and thus need to be encouraged. It is unrealistic to assume that all countries and businesses in Latin America and the

The Caribbean will embrace corporate social responsibility rapidly. There will be exceptions, and there will be setbacks. But the political signals that leaders can send to foster good corporate governance are vital, and many look to the Summit of the Americas to set the hemisphere on the long-overdue path of socially and environmentally responsible corporate behaviour.

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Introduction

Nintendo financial statements are lacking corporate social responsibility, which is important in the modern corporate world. This information is vital for the current corporate world Social responsibility. Take two interactive software as a section of social responsibility. Corporate social responsibility is described below.

Social responsibility concerning the management of corporate is defined as duties and moral obligations of corporate to other stakeholders. Corporate social responsibility is moral rights, wrongs, and obligations for business managers for any business transaction or decision. The moral responsibility of corporate depends on the nature of business and the individuals involved

Business organizations have adopted various ethical policies because they believe in showing the neighborhood their moral responsibility and in the process they have increased their sales.

Corporate social responsibility like any other concept is to be discussed in broad terms. The idea of corporate social responsibility was introduced in 1973 when it was introduced in American corporations. Its basic premises of ethical obligation have made managers and shareholders own self-interest in business transactions. Every business manager who incurs business transactions will put society goals and aspirations in the front.

Basic theories

Corporate social responsibility revolves around four basic theories which will include social contract theory (contractual relation), social justice theory (equitable distribution of resources), rights theory rights of community where the company is operating) and deontological theory.

• Social contract theory: This theory assumes that there are many contracts both explicit and implicit between individuals, organizations, and institutions. Social contracts evolve around whims of trust and are made in harmony. Corporations are assumed to the business world by entering into contracts with the society in exchange for resources and acceptance to operate without interruption.
• Social Justice Theory: This examines the fairness in the distribution of societal goods and services. The theory puts forward arguments that societies are considered, by way of distributing social goods. Corporate managers have a responsibility in ensuring these goods have been appropriately being shared in society.
• Rights theory: This theory deals concentrate on the rights of various members of the society like human rights and other rights. Corporate managers should not interfere with the property rights and human rights of members of society. The corporation will have property rights that should not be used to affect the rights of employees and the local community.
• Deontological theory: This theory assumes that everybody is equal and should be treated with respect and everybody has a moral duty to that effect. This belief is for everyone, including corporate managers, shareholders, and other stakeholders. Corporate social responsibility gives reasons why managers

This is shown from statements of taking two interactive software about the employee section Directors and Executive Officers of the Registrant, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. however, this information is lacking Nintendo financial statement

In analyzing the financial statement, the following ratios have been calculated for comparison purposes

Table 1. Financial Performance

From the table above analyzing the performance of the two companies, we realize that Nintendo was performing poorly in terms of working capital management. As they have huge working reserves in hand without investing them. They also have a better credit ratio as they can pay their creditors, and meet short-term obligations. This shows that they are not exploiting credit facilities well.

On the other hand, Take two interactive software to have good ratios in terms of working capital management. When it comes to solvency, they are doing excellent because the ratio stands at 0.4 times, which is not too much. it shows that the company is utilizing credit facilities well unlike the other one.

Conclusion

Based on the debt ratio, and if Nintendo is to finance the venture through external borrowings (debt), then it would be advisable to do so. This is because they have not utilized debt capital well which not a good debt management policy is. However, the management of the company is not efficiently utilizing the current equity as shown by a decline in the return to equity over two years. The management seems not to be aware of the excess funds lying idle. The directors should think of injecting new blood into the company.

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