The Contribution of Corporate Social Responsibility

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Table of Contents

Introduction
Theories
CSR Best Practices
Conclusion
References

Introduction

Corporate social responsibility (CSR) has become a crucial component of modern business practices in many business firms. The definition that is used to describe CSR has been an issue of contention between different scholars. This has been largely influenced by the manner in which the concept is applied by various organisations in different industry environments (Frynas 2005, p. 584).

Corporate social responsibility initiatives are very important to some business firms because they allow them to audit their contributions to various social objectives in different areas. However, different theorists have conflicting views regarding how CSR needs to be defined.

This has become an issue of contention and requires a deep analysis on the nature of CSR and specific objectives it is supposed to perform in different organisations. This section will analyse why different theorists do not have a universal definition on CSR. In general the paper will also analyse the contribution of CSR to business objectives in various firms.

Theories

Business firms that are involved in CSR activities have realised that they need to build strong relationships with all stakeholders. However some organisations have not yet fully appreciated the concept of CSR and the value it can add to their operations. Some theorists have argued that corporate social responsibility requires business firms to perform both social and commercial roles in industries they operate.

Okoye (2009, p. 615) notes that CSR has made some firms to have different attitudes on how they need to relate with members of communities living in locations they operate. As such, these firms have used different criteria to build relationships with community stakeholders which influence how they take part in various CSR activities. This situation has made it difficult for CSR to have a universally accepted definition (Van Marrewijk 2003, p. 97).

The concept of CSR is understood within specific cultural contexts. This varies depending on the way it is applied by different business firms operating in different countries. Sims (2003, p. 78) argues that CSR is presented as an ambiguous concept by its proponents, which makes it difficult for some people to understand its relevance.

Therefore, several organisations that apply the concept do not have clear objectives about what they want to achieve through CSR because it is not part of their mission. However, Frederick (2006, p. 65) takes an opposing view claiming that the absence of a clear definition has not stopped some organisations from taking part in philanthropic activities, which are widely interpreted as CSR.

In many business environments, CSR has a lot of connotations which are complex and understood only by those who propose them. The way CSR is defined and understood is mainly analysed through relationships corporations have with communities living in locations they operate from. Some theorists have argued that CSR is a means through which corporations fulfil their social responsibilities to disadvantaged communities.

The dimension of social contracts which determine relationships corporations have with people living in communities that benefit from CSR initiatives has elicited sharp debates. Shama and Bhal (2004, p. 83) argue that the main objective of any business firm is to make profit and this issue cannot be overlooked regardless of different contexts in which CSR is applied.

They insist that any business firm seeks to build strong relationships with its clients, yet some of them live far from communities that benefit from various CSR activities. Therefore, a firm should not be compelled to contribute its material resources towards improving the wellbeing of people living close to areas they operate from. Lantos (2001, p. 612) insists that some beneficiaries of such projects do not contribute any tangible benefits to organisations that fund them.

The social power equation argues that a corporation that has a lot of power in the industry it operates needs to initiate CSR activities to ensure it stays relevant. The techno- structure power equation argues that corporations with large bureaucratic structures need to use their influence more effectively.

They need to utilise their dominance of economic, social and political spheres in various societies through CSR to ensure they stay relevant to peoples’ interests (Palazzo & Scherer 2007, p. 1107). The interpenetrating power model argues that business firms need to ensure CSR initiatives they take part in are motivated by symbiotic exchanges with members of beneficiary communities.

This ensures mutual interests of both parties are achieved effectively. All these power models show that large business firms have social, economic and political influence in areas they operate from (McWilliams, Siegel & Wright 2006, p. 11). Therefore, they need to exercise this influence legitimately to enable them achieve long term corporate objectives as well as other crucial social goals.

Other theorists have argued that organisations are driven by ethical, selfless and strategic goals when they take part in various CSR activities. They undertake CSR activities to uplift their profile in the industry to help them achieve long term objectives. Therefore, such organisations have clear expectations about what they want to achieve out of CSR and they align them to their long term business objectives (McWilliams & Siegel 2001, p. 122).

Some corporations feel that there business operations are instruments that enable them create more wealth for their shareholders. These business firms perceive any CSR activity they undertake as a means they can use to generate more profits to boost their earnings. Therefore, such business firms focus more on the long term benefits they are likely to get from taking part in different CSR activities in various locations they operate from (Garriga & Mele 2004, p. 57).

Other firms believe that CSR is a means through which they can extend their social power to ensure they have more social responsibilities in industries they are active in. These firms cooperate with members of communities in locations they operate from to increase their influence.

They are more interested in improving their reputations by showing their key stakeholders they are willing to uplift the status of less privileged communities (Waddock 2001, p. 327). Other theorists believe that business organisations need to take note of social needs in areas they operate. This enables them to integrate their CSR activities with long term interests which surrounding communities have.

These theorists believe that firms that integrate CSR into their mainstream operations are likely to experience positive growth in revenues and market share (Prahalad &Hammond 2002, p. 52). Many theories that define CSR focus on motives that drive many business firms to take part in CSR activities.

Other theories have focused on models of relationships which business firms build with communities that are likely to benefit from different CSR initiatives. As such, these firms have come up with innovative systems that enable them build mutually beneficial relationships with communities that live in areas they operate. McBarnet, Voiculescu and Campbell (2007, p. 76) argue that CSR should be made a key part of organisational culture in various firms.

They insist that business firms should shoulder more social responsibilities in areas they operate to satisfy the needs of people living there. Other theorists insist that business firms represent their owners’ interests in an industry. Thus, managers should not engage in CSR activities that are likely to jeopardise owners’ financial interests in industries their firms are involved in.

They also argue that CSR is not a core business objective that binds business firms to execute various functions as expected by their shareholders (Cooper 2004, p. 78). Managers have to follow rules that outline how different operations in their firms need to be conducted. Some theorists claim that business firms have an element of public trust and as such, they should not shy away from their communal responsibilities in various industries they operate (Matten, Crane & Chapple 2003, p.111).

They argue that by participating in CSR activities, business firms show they care about people living in societies where they operate. Business organisations that engage with community members sustain strong linkages in areas they operate and this makes them build valuable relationships. Many corporations are formed through public legal acts which are built on democratic foundations of liberty and freedom.

These theorists argue that corporations need to recognise they operate in legal environments founded on the collective spirit of citizens living in a particular area. Decisions made by managers of such firms affect many people in the society and as such, they cannot claim to be separate entities whose sole motivation is to make profits (Matten & Moon, 2004, p. 87).

Some theorists argue that CSR is influenced by cultural phenomena practiced in different places across the world. Donaldson and Dunfee (1999, p. 131) insist that a universal definition cannot explain the concept of CSR because various cultural factors determine how business firms take part in such initiatives.

Some corporations choose to take part in CSR initiatives that improve the welfare of other people in areas they operate due to moralistic reasons. Such firms choose to participate in development issues in areas they are operating from because they feel they have a moral obligation to use their power to bring about positive changes.

Carroll (1999, p. 289) reveals that some corporations have realised sustainable development helps them conform to modern business practices. They constantly audit their practices to ensure they do not violate crucial labour and environmental standards. They have also implemented policies that encourage them to engage in philanthropic activities.

This section will discuss how Procter and Gamble can implement good CSR policies to improve its operations. The firm needs to have a long term approach to ensure its CSR programs are integrated with other operations that have an impact on its long term success in the industry. The firm needs to set goals that go beyond making profits to ensure its involvement in CSR strengthens its brand globally (O’Brien 2005, p. 98).

P&G needs to use part of its profits to improve the social welfare of people living in different communities where its industrial operations are based. This approach will enable the firm conduct itself responsibly in its dealings with various stakeholders in the industry. P&G needs to make CSR part of its mission to ensure all employees and other key stakeholders understand results that need to be achieved out of various CSR initiatives.

CSR Best Practices

P&G needs to audit its business practices to ensure they conform to various CSR activities it participates in (Beauchamp & Bowie 1988, p. 145). It also needs to analyse how its involvement in CSR will affect the way it relates with various government departments in countries where its operations are based. Some multinational corporations have been accused of using CSR to exploit weak government laws for their own benefit.

Therefore, P&G should not use its involvement in CSR as an excuse to engage in business malpractices that do not conform to good business ethics. This devalues the good work CSR does and may harm the firm’s image in the long term (Tricker 2011, p. 123). P&G needs to allow external watchdog firms to audit its CSR practices to ensure they conform to high integrity standards.

P&G needs to liaise with other stakeholders to determine how CSR campaigns will be carried out. It needs to consult community leaders in areas that need CSR projects to ensure people living in such communities are involved in bringing positive changes. P &R’s management needs to come up with clear terms that are easily understood by all stakeholders involved in various CSR projects it undertakes (Leipziger 2003, p. 74).

P&G’s CSR activities have not been successful in the past because its managers failed to consult community stakeholders targeted by CSR projects the firm undertook. The firm needs to make its employees and other community stakeholders see benefits they are likely to obtain from various CSR projects the firm initiates (Whitehouse 2003, p. 57). This will enable all stakeholders to coordinate various CSR projects to ensure they attain good results.

Dahlsrud (2008, p. 8) argues that P&G needs to make its workers understand their social responsibilities by participating in CSR campaigns. It also needs to set collective goals with communities that are beneficiaries of various CSR projects. The firm needs to make CSR a part of its long term mission to ensure it is combined with crucial organisational processes.

Customers in different industries are attracted to firms that demonstrate their willingness to pursue sustainable development agendas. An effective CSR policy will make more consumers recognise P&G’s corporate values and this will raise the profile of its brands in different markets (Amaeshi & Adi 2007, p.12). P&G needs to set objectives it intends to achieve out of CSR by using tools that measure results achieved out of different projects it is involved in.

Benn and Bolton (2011, p. 87) reveal that P&G needs to put in place effective systems that explore how various CSR initiatives the firm is involved in relate to its long term business strategies. This will help the firm take note of any new issues that may arise which have an impact on the way it does various CSR campaigns.

If necessary, P&G needs to build synergies with other firms that have done successful CSR campaigns in the past to learn new ideas from them. The firm also needs to consult other stakeholders before making any CSR decisions that require a lot of planning. This approach will ensure decisions made conform to all stakeholders’ expectations. The firm needs to ensure all decisions are made through consensus before undertaking any project.

This will help to avoid disputes that may have a negative effect on its CSR activities (Bendell 2004, p. 89). P&G should conduct needs assessments for proposed CSR projects it seeks to undertake. This will help the firm choose specific CSR projects that need to be prioritised to ensure resources are allocated properly. P&G needs to have effective policies that evaluate the impacts of various CSR programs in different communities they are implemented (Tullberg 2004, p. 327).

The firm needs to ensure that specific CSR projects that are initiated solve problems faced by different communities. Therefore, P&G needs to put in place measures to assess how such projects impact positively on beneficiary communities (Blowfield & Murray 2011, p. 78). P&G needs to have agreements with different community stakeholders on how various CSR projects that are initiated will be run.

This will help the firm to monitor all CSR projects it has funded to ensure they satisfy communal objectives they were intended for during their inception (Fisher & Lovell 2003, p. 65). P&G should also conduct an environmental impact assessment before any project is undertaken to ensure it does not pollute the surrounding natural environment. The firm also needs to take note of other impacts that may have a big effect on people’s lifestyles (Spector 2008, p. 319).

P&G should take time to understand any legal implications that are likely to arise out of its involvement in different CSR activities. This will ensure that all projects it embarks on comply with all government regulations to avoid unnecessary conflicts. CSR helps a firm extend its social relationships to other areas which have long term benefits to its operation.

A firm needs to engage with various stakeholders to determine how various CSR projects that are implemented are going to be maintained (Megone 2002, p. 79). For instance, a water pump erected in an irrigation scheme needs to be constantly maintained. This requires monetary allocations to be made to ensure it functions properly at all times.

A firm that commits to construct such a project needs to agree with people living in that area on how it is going to be maintained to ensure it continues to function properly. The firm also needs to assess the long term viability of the project to ensure it does not become a white elephant project (Spence 2007, p. 539). P&G needs to conduct assessments to determine whether CSR projects it embarks on are viable and sustainable in the long term.

The firm needs to carry out a cost benefit analysis for all CSR projects it undertakes. P&G needs to understand that by taking part in CSR, it is building valuable social relationships that will bring long term benefits to its operations. The firm needs to make all stakeholders understand that CSR activities help to improve various social conditions in different communities.

P&G needs to encourage them to develop solutions that address various social, environmental and economic conditions that have a large impact on people’s lives. P&G needs to agree with people that are beneficiaries of various CSR projects undertaken on how they are going to be maintained to ensure they stay useful. The firm needs to share responsibilities of maintaining CSR projects with communities living in places where these projects have been initiated (Spence 2007, p. 547).

Some people living in communities where such projects are located can be given full time responsibility to look after them. P&G needs to look at the impact of other external factors that have an impact on the way it performs various CSR activities. The firm needs to look at all government regulations in different locations it operates from to determine how they are likely to affect its involvement in CSR.

Crane and Matten (2010, p.79) reveal that the firm needs to assess licence costs, taxes and other standards it needs to comply with before it undertakes various CSR activities in different communities. This will help the firm take note of all external factors that may affect how it does various CSR projects in different locations. The firm also needs to make its operations more transparent to ensure it satisfies different integrity parameters that may affect its involvement in CSR.

Some governments also waive taxes on various CSR projects that uplift the welfare of people. P&G needs to create partnerships with such governments to ensure CSR projects that are undertaken bring about social and economic transformations in people’s lives.

Conclusion

In conclusion, corporate social responsibility enables a firm put in place sustainable development initiatives that have long term benefits to people living in various communities. P&G needs to focus on economic, social and ethical goals in different locations across the world where its business operations are based.

The firm’s involvement in different CSR activities will help it uplift the social welfare of many people living in needy communities. P&G needs to ensure that its involvement in CSR does not affect its overall performance in the long term. This gives it an opportunity to establish strong links with people living in communities that have benefited from various CSR projects.

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