Human Resources Management Strategy Corporate Social Responsibility Term Paper

Pages: 9 (3605 words)  ·  Style: Harvard  ·  Bibliography Sources: 18  ·  File: .docx  ·  Topic: Business

Corporate Social Responsibility

The Good, the Bad and the Ugly

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Corporations have been blamed for a variety of evils from global warming and the destruction of the rainforest to problems related to gross negligence of funds as well as abuse of employees. The past two decades have seen a host of ramifications from the 'anything for a buck' mentality that have left the public reeling with mistrust and even hatred for corporate entities. Business, more than any other force be it social, political, or religious, shapes and creates the foundations of government and society. It has only been fairly recently, however, that business has taken appropriate measures to ensure that its operations and its members behave in an ethical and socially responsible manner. Unfortunately the nature and legal identity of a corporation is such that it imbues its owners and stakeholders with certain indemnifications that up till now have relieved them from the oppressive burden of accountability. 'The corporation as a thing is not pathological. The problem lies with those who benefit from its structure and design. The corporation is where they hide.' (Glasbeek 2005: 23) in the past, this has created a corporate 'norm' of managed mendacity (Ferguson 2004) when it comes to taking responsibility for its consumers, the environment and even its working staff. This is the truly ugly side of this system, this norm of malaise regarding the damage done by thinking only of profits. This attitude has not only taken a toll on public opinion, but on the structure of many businesses as well. So much so, that now CSR (Corporate Social Responsibility) is becoming synonymous with corporate sustainability and many businesses, both large and small, realise that in order to sustain growth they must look at the long-term impact their practices have on the environment, both externally and internally.

TOPIC: Term Paper on Human Resources Management Strategy Corporate Social Responsibility Assignment

But this is really nothing new. For centuries businesses have been called on to take social responsibility on their shoulders, since it is that very responsibility that engenders good business in the first place. Nowhere more poignantly noted than in that tale by Dickens where Scrooge, complimenting the ghost of Jacob Marley on his good business sense is met with this retort:

Business!' cried the Ghost, wringing its hands again. 'Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!' (Dickens 1912:36)

Has this cry fallen on deaf ears for centuries? Hopefully this is not the case. Yet, as in all things, there are many variables to consider when determining just what this responsibility entails. The World Bank offers one general definition:

Corporate Social Responsibility is a term describing a company's obligations to be accountable to all of its stakeholders in all its operations and activities. Socially responsible companies consider the full scope of their impact on communities and the environment when making decisions, balancing the needs of stakeholders with their need to make a profit. (Doane 2005: 215)

This definition tends to err on the side of profitability and considering the source this is not surprising. Yet this is the crux of the issue that any businesses face, the dilemma of CSR vs. profitability. There must be a bottom line that is relevant and sustainable to both. In the past this has often seemed a conflict of opposites that cannot be resolved, but only because of the normative effect that corporate culture placed on profits. Now there is some room to breathe and let in some air of reason. By devoting more time and profit to a CSR initiative, businesses are realising that less profit in the short-term may provide for sustainability and longevity down the road. Anver Versi gave a speech at the University of Illinois entitled 'CSR-First Principle of Survival' and had this to say:

believe that good Corporate Social Responsibility is not only excellent for the bottom line for individual companies but because good CSR is an essential ingredient of civil social responsibility, particularly in the developing countries if the burgeoning cities and their slums are to be transformed into creative, productive conurbations. Let us make no mistake about it. The economies of the developed world will depend more heavily on the resources and labour in the developed world. (Versi 2007: 35)

However, the balance is often difficult to achieve between corporate profit and corporate responsibility. Companies are more used to pounds and pence bottom lines in their balance sheets than they are other less tangible outcomes:

One of the first challenges facing a company that wants to operate under the principles of CSR is determining how to balance its social and environmental responsibilities with its more clearly defined economic responsibility to earn a profit. It is important for promoters of CSR to acknowledge that at some point the cost of being socially and environmentally responsible outweighs the benefits. When this happens, most firms will cease to engage in new initiatives. In essence, CSR has a built-in social and environmental glass ceiling that is dictated by the dominance of the firm's economic commitment. (Berkhout 2005: 15)

Realistically, after all, if the company goes out of business, that in a sense also shows a lack of social responsibility to the public as well as the shareholders of the corporation. This is the sensibility that needs to be achieved; that the bottom-line for the company is the same as the bottom line for its social responsibility. They are not necessarily anathema to each other, but complimentary and mutually sustainable.

However, in the past the normative nature of profit for corporations became the rule and few companies would transgress that decree.

According to advocates of liberalization, such as Hayek, faith in market efficiency led to broad deregulation and less monitoring during the 1980s and 1990s. As a result, opportunities for the market process to engender its own spontaneous norms were enlarged. At the beginning of 2001, we realized that an increasing number of companies had been circumventing accounting rules to mislead investors, seemingly without fear of being convicted. These malpractices became so widespread that they can be considered a regularity of conduct. That is, they were norm-based behavior patterns brought about by liberalized markets. (Duran 2007: 222)

Slowly this norm-based behaviour is being replaced by a heightened consciousness in business and supported by markets and consumers that will no longer tolerate these self-serving actions for greed and gratification. However, to recreate this norm as an ethical business attitude will require us to look at the smaller indiscretions or activities and no longer minimise the impact of big business. This can be helped by understanding and providing assistance to institutions that support those businesses that operate on a sustainable platform and provide a social return on investment beyond only the financial gain of the corporation. The markets need to transform in such a way as to eradicate the larger corporate 'winner-takes-all' approach if there is ever going to be a change in this norm-based behaviour. (Doane 2005: 215)

Deborah Doane in her article, 'Beyond Corporate Social Responsibility: Minnows, Mammoths and Markets' Posits the following: 'There are four key drivers that would impel a company to adopt a CSR programme: managing risk and reputation; protecting human capital assets; responding to consumer demands; and avoiding regulation.' (Doane 2005: 228) These drivers are certainly the harbingers of change in the new age of social responsibility. In particular these four drivers not only address that social responsibility, but also the fiscal responsibility of the corporation in order that it may sustain itself and grow from here.

Buried in this winner-takes-all approach to business is the concern that too much is never enough. This is especially true considering the exorbitant rise in CEO's salaries and bonus packages that have been driven to astronomical highs seemingly out of sync with any actual benefit back towards the company and its shareholders. As Stelzer states, there is a need to instil in the new corporate awareness a sense of 'enoughness.' (2004) the corporation needs to adopt a sense of moderation when it comes to equating value and wages.

A executives create an organization's culture not by words but by actions. If those farther down in the ranks perceive that the chief executive officer and his senior executives condone virtually any behavior that will result in greater revenues and profits, a culture of 'succeed at any price' will quickly prevail. (Ferguson 2004: 29)

Another issue hearkens back to the very nature of the corporate veil, which protects the company's agents, but often keeps shareholders in the dark regarding the nature of the actions of these agents. This has been penned the principle-agent problem (Seltzer 2004), this situation is created when the shareholders who own the company do not or are not able to maintain adequate control over the agents who are managing their business. A situation that can be rife with corruption may go completely unnoticed by the… [END OF PREVIEW] . . . READ MORE

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