Understanding of Corporate Social Responsibility (CSR)

Corporate Social Responsibility is defines as how companies manage the business processes to produce an overall positive impact on society. Companies need to answer to two aspects of their operations. 1. The quality of their management - both in terms of people and processes (the inner circle). 2. The nature of, and quantity of their impact on society in the various areas. Outside stakeholders are taking an increasing interest in the activity of the company. Most look to the outer circle - what the company has actually done, good or bad, in terms of its products and services, in terms of its impact on the environment and on local communities, or in how it treats and develops its workforce. Out of the various stakeholders, it is financial analysts who are predominantly focused - as well as past financial performance - on quality of management as an indicator of likely future performance (Mallen Baker 2004). Now a days many of the company more focus on generating profits, sustainability was not a main concern for many companies to put the afford or contribute on sustainability. 

The world is changing to globalization century, many of multinational organizations which are conduct business in several countries) and many local businesses are no longer able to unethical practices and conduct destructive, example like factory to drain away the industrial sewage it may cause polluting the environment, it can cause attracting negative feedback from the public as well. With the social media pay the attentions on this issue, many pressures have come from non-governmental organizations, and rapid social media information sharing, there is more pressure from society governments, consumers, and others for organization to implement sustainable business practices in business industry, the reason for organization to attract and retain employees and customers, is because companies are realize the importance of being ethical when running their business.

Many people believe that multinational organization are acting ethically in areas that are highly regulated, such as North America, but at the same time, they are acting in an opposite manner in other parts of the world example like using cheap or child labor to work for them. Furthermore, while organization must have good Corporate Social Responsible policies in order to maintain their reputation, they are also expected to maximize profits for stakeholders such as, employees, customers and shareholders.

Therefore, many people believe that businesses do not put in a sufficient amount of resources to achieve what they have promised in their Corporate Social Responsiblepolicies. In any case, companies are expected to implement better in non-financial areas example like environmental policies, workplace issues, organization contributions, business ethics, community development, human rights, and corporate governance. 

There are many examples to prove that Corporate Social Responsible prepare a safe working environment for employees, contributions to community and charities to public and environmental stewardship. Many companies argue that it is hard to implement corporate social responsible in their business, because CSR is becoming more expensive method among organization to implement, there are some company provide a good image of corporate social responsible because these company have implement good and correct strategy in their daily operation. Accountability and transparency are method tosuccess the business in a functional way. If organization can focus on implement corporate social responsible policies it can assist organization win their competitor and can get new business to grow the structure of the organization.

Customer will stay with our business and support for our business if we have implement CSR.We can enhance our relationship with our loyal customer, network and suppliers. Employee willing to work with the organization, they will happy with the work force and can be the first choice of employer in their mind. Not only for that many new employee will be attract to work with our organization and retain our loyal employees. Organization can save more money on cost of energy and daily operating costs and able to manage the risk. We can differentiate our potential from our competitors, because they may not have implement CSR compare to those organization who implement CSR.Those organizations who implement CSR can improve their business reputation and grow up their business compare to their competitors.CSR can assist organization to generate positive image from the public. The disadvantages of CSR are role of profit. It is because social and environmental programs are hard to account for with regard to financial gain.

Competitive disadvantage. If the organization has not implemented strict adherence industry wide, many companies argue that they cannot fall behind by putting money into CSR programs. Loss of Focus.Lasting impact. According to the My Efficient Planet website, CSR has existed for more than 50 years. However, its prominence as a major business consideration has certainly increased in the 21st century due to heightened awareness of ethical issues in business and environmental preservation standards. Detractors argue that CSR emphasis is a short-term fad in response to prominent scandals like Enron, and current interest in green-friendly practices. According to the Small Biz Connect website one of the serious challenges that businesses face when becoming involved in corporate social responsibility is growing consumer cynicism. Consumers now recognise that for many organisations, social responsibility is simply a public relations campaign in disguise. 

They are skeptical about the true motivation behind corporate social responsibility and are not easily convinced that a business is acting in the best interests of the community and environment. Corporate social responsibility also comes under criticism because it is disposable or reversible. Many businesses get involved in sustainable projects when economic conditions are excellent and they have plenty of disposable resources, however, as soon as conditions worsen, their community projects are the first thing to go. This can be detrimental to groups who were reliant on the assistance they were receiving from the organization. Clearly, organizations that want to be socially responsible must face many challenges and overcome a number of barriers and criticisms. They need to weigh up all the advantages and disadvantages that are associated with corporate social responsibility and determine what is best for the sustainability of their business.

For my conclusion, I think organization need to be more alert when implement CSR, it can cause to many losses to the organization if there is no implementation of a well CSR program, but at the same time, if we can implement CSR program well, we can gain a lot of benefits from it.