What is Corporate Social Responsibility? Learn All About It

The corporate social responsibility (CSR) refers to the business management practice wherebyorganizations integrate social and environmental concerns into their business activities. The concept of CSR is based on the principle of "giving back to the society" as a gesture of gratitude. An organization needs social support and resources from its environment to operate successfully and sustainably for a long-term period. Therefore, it becomes its responsibility to take care of the interests of the society and environment, which plays a crucial role in its growth and survival.

The CSR can also be described as the social accountability of an organization to its stakeholders. According to the PenMyPaper writers, in the contemporary business environment, CSR has a significant role to play behind the performance of a firm. Socially responsible firms have been found to have a more positive corporate image, which helps in attracting both the customers and its investor. Moreover, these organizations are also likely to be supported and favored by local governments as they make significant contribution to social development.

The Corporate Social Responsibility has become a vital subject in business management and as a student you need to have a good grasp on its concept and theories before you can write on any essay topics on CSR.

Corporate Social Responsibility: Creating a Socially Responsible Venture

The core objective of CSR for any organization is to take care of the needs of the community in which it operates. The external entities such as the society or the community and the ecosystem is considered to be a significant part of the business operation, as they support the sustenance of the business venture. Another such practice is called SWOT analysis, where individuals try find the hits and misses of their organization in order to push the company performance. Better if you look into the SWOT analysis of Walmart as a reference. Similarly in case of CSR, it becomes the social responsibility of the organization to undertake initiatives which can benefit society and the environment.

It should be noted that CSR practices should not be an additional functional unit dedicated to meeting the interests of the community, but it should rather be thoroughly integrated into the entire business venture in every operational activity. The CSR should be adopted as a culture rather than a separate business process. Thus, the objective of CSR is to create a socially responsible business venture, where every decision made by the organization has a positive impact on the society and the environment. When the CSR is adopted as a culture, then every organizational activity contributes to the society, no matter how small it may be. Starting from reducing energy wastage to developing resource efficient production processes to establishing charitable organizations, there can a vast range of socially responsible activity that an organization can undertake.

By this time,you should have gained a clear idea of what is corporate social responsibility and why it is important for an organization and the community around it. s a matter of fact, you can even use this information of the key theoretical frameworks of CSR in writing your critical analysis essay or any such academic paper. These theories can help you to assess the corporate social responsibility practices of different organizations as a part of your case study and also allow you to develop new CSR strategies. Let’s look at some of the fundamental theories of CSR.

Triple Bottom Line Theory

The triple bottom line theory is one of the commonly used frameworks on the field of CSR. This theory dictates that organizations need to announce their bottom-line results not just in the area of finances but also in the area of social responsibilities. Based on this theory, three distinct areas of responsibilities have been identified, which are economic, social and environmental.Each of these three areas of sustainability should be considered to be separate and independent, and the organization should thrive to achieve sustainable results in all of these three areas.

The concept of sustainability is deeply embedded into the triple bottom line theory. Organizations following this framework needs to long term maintenance of balance can be fostered in economic, social and environmental perspectives.

Economic: The economic sustainability refers to the long-term maintenance of the financial stability of the organization. The organizations have the responsibility to develop business plans which supports the long-term growth of the business. In this context, the firm has the responsibility to earn revenue and foster higher profitability, which is extremely crucial for its survival. Moreover, the triple bottom line theory also suggests that the company holds the responsibility to offer expected return of its shareholders and investors. Therefore, the economic sustainability refers to practices of the organization which are aimed at strengthening its financial status and to meet the interests of its shareholders. It is important to understand that a large number of organizations are focused on earning revenue, while ignoring its social and environmental responsibilities. However, the triple bottom line theory suggests that in order to be truly sustainable in the long run, organizations cannot be streamlined only at making money for themselves and the investors. Although, making economic progress is one of the three pillars of sustainability, but it is not the only one.

Social: The social sustainability refers to taking care of the interests of the people and the community surrounding the organization. It can be achieved by adopting initiatives which are beneficial to the society, such as stepping up against racism, gender discrimination, supporting workers’ rights, etc. According to this theory, the social responsibility of a firm is to ensure that it is able to bring positive changes in the lives of people. Organizations often choose to fund charitable initiatives looking over concerns like poverty, child labor, lack of primary education, etc. Moreover, their also choose to establish stringent policies for their suppliers to follow ethical sourcing of materials from conflict-free regions. The social responsibility of the organization also extends to meeting the interest of the employees and staff members. Offering industry standard remuneration and providing necessary workplace safety and hygiene is also a major part of social sustainability. The core objective of social responsibility is to support the community of people in and around the organization, which plays a crucial role behind its survival and success.

Environmental: Environmental sustainability refers to taking care of nature and its eco-system. It originates from the fact that natural resources like fossil fuel, metals, minerals, etc. are not abundant and they are likely to come to an end eventually. Therefore, it is responsibility of the organizations to operate in such a manner so that these environmental resources are sustained as much as possible. Firms, especially operating in the manufacturing sector, are largely dependent on natural resources, so in order to reduce their dependence on those resources, they adopt recycling of products, green supply chain and green product development. Moreover, some organizations also develop new processes which can reduce the use of natural resources as much as possible.

The environmental sustainability also extends to the impact of the business operation on the environment. There are many business activities which can have negative impact on the eco-system. Dispersal of toxic fumes, disposal of chemical wastes and higher energy usage are some of the key issues in environmental sustainability. Organizations often adopt alternative production processes which reduces environmental impact and also adopt proper treatment of toxic wastes, along with the use of renewable energy.Thus, the environmental sustainability involves all the practices which allows an organization to reduce the impact of its business operation on the environment as much as possible. Moreover, it also includes taking certain initiatives of re-building the ecosystem, such as reforestation. The triple bottom line theory offers a holistic approach to CSR practice. If you learn it thoroughly, you should be able to do your own research proposal writing on corporate social responsibility.

The Stakeholder Theory

The stakeholder theory identifies all the entities that are directly or indirectly related to the organization and highlights the responsibility of the organization towards them. As opposed to the triple bottom line theory, which presents the perspective of the organization towards society, the stakeholder theory presents the perspective of the society. According to this theory, a stakeholder is any individual, group or entity which can influence or be influenced by the business operations of an organization. The organization has certain accountability towards its stakeholders, which it needs to fulfil. In simple words, the core principle of the stakeholder theory suggests that ‘people whose lives are touched by the activities of the company, have the right and obligation in directing it.’Thus, if the waste disposal of a manufacturing plant of a company is adversely affecting the drinking water of the nearby settlement, then those people have the right to be able to change the operational processes of the firm.

An organization can have various stakeholders, which can be segregated to internal and external stakeholders. The internal stakeholders are the ones who are directly associated with the organization, such as the board of directors, employees, investors, etc. On other hand, the external stakeholders include the customers, suppliers, governmental bodies, society, etc. According to the stakeholder theory, it is the responsibility of the company to ensure that interests of these entities are met, and that the company is accountable to them for its actions. Thus, following this theory, an organization is driven to meet the interest of its shareholders and investors by generating revenue and increasing its profits, and it is also driven to meet the interest of the society by contributing to social welfare causes. In this context, it can be stated that the stakeholder theory demands an organization to balance value creation for all of its stakeholders, in order to achieve long-term sustainability.

Corporate Citizenship

The theory of corporate citizenship is based on the affirmation that an organization can be considered as a citizen and just like a citizen it has certain obligations and responsibilities towards the community in which it operates. It refers to the responsibility of the organization towards the society in which it has the permission to run its business. This theory suggests that as an organization its goal should be to offer better standards of living for the surrounding community and still maintain desired profit for the shareholders and investors.

Every organization has certain legal and ethical obligations to fulfil. However, the most successful firms are those which have been able to meet maintain a perfect balance between the meeting the needs of the shareholders and the needs of the community and the environment. Maintaining such balance showcases the strong commitment of the organization towards ethical behavior.

What has the CSR Theories Taught Us?

The theories discussed above can certainly help you to become a good academic paper writer on CSR. These theoretical frameworks have taught us that the function of an organization is not only to generate more for its owners and shareholders, but also to take care of the community and environment in which it operates. A socially responsible organization usually fulfils its obligations to all of its stakeholders, which is reflected in its economic, legal, ethical and philanthropic responsibilities. The economic responsibility fulfills the interests of the shareholders and investors. The legal responsibility fulfills the interest of the government. The ethical responsibility fulfills the interest of the environment. Finally, the philanthropic responsibility fulfils the interests of the society. Thus, according to the CSR theories, an organization needs to maintain the right balance in meeting the interests of its stakeholders, in order to achieve long term success and sustenance.

Still Confused about What is Corporate Social Responsibility?

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