Corporate social responsibility (CSR) and investor activism have become more commonplace in modern corporations and central to the core of emerging companies. Aspects such as political participation, climate change, diversity, and human rights are among some of these issues which can take on various forms depending on the industry or sector in which a company operates (Serafeim, 2016). Social responsibility can have a profound positive impact on a company’s long-term sustainability, public image, and operational capacities as shareholders and firms invest in the future, rather than short-term profit.
There are numerous advantages to CSR, particularly implemented on a large scale across industries. It establishes and promotes ethical behavior in organizational practices, limiting aspects of labor and consumer exploitation, bribery and corruption, and destruction of the environment among some of these outcomes. This creates a higher standard for corporations, increasing accountability while exposing any companies which choose to use unfair practices. The implementation of CSR is beneficial from a business perspective, influencing reputation, employee satisfaction, and branding, all of which attract greater public support, consumers, and business-friendly legislation. In turn, it allows for increased profitability and growth in the long term. However, there are existent criticisms of the CSR approach which are merited. The primary concern is the additional costs of bureaucracy, oversight, and meeting standards. It results in decreased profitability in the short term as to costs of operation increase to the point of being financially unsustainable. This could potentially suffocate the market and economic growth, limiting access to emerging companies. Another concern is that the reporting and CSR criteria vary significantly based on industry, country, and culture, all of which are continuously evolving (Geethamani, 2017).
Effective implementation of CSR in company policy requires the support of managers and employees. Manager attitudes towards social responsibility are critical for the broad acceptance and practice change across the company operations. Managers participate in a variety of vital decision-making activities in distinct departments such as marketing, procurement, sales, and production. CSR is more than a general company policy but is reflected in the direct operations and processes involved. Manager attitudes and understanding of social responsibility strongly affect the ability to create practical change. Without a proper attitude alignment, CSR can be affected by mismanagement, poor leadership, and lack of resources allocated for the initiative (Baba Abugre, 2014). Creating a network of support, providing adequate incentives, and ensuring that sustainability is beneficial not only for the world but for the company and its employees are some methods that can be used to influence manager attitudes toward acceptance of CSR (Wickert & de Bakker, 2019).
In my opinion, social responsibility is beneficial for corporations and results in long-term returns. It sets up a company to become more sustainable and innovative in its processes and operations, potentially gaining a competitive advantage in the future. Social responsibility prepares an organization for challenges by creating a solid foundation of private and public support as well as a greater awareness of global events and issues. Finally, it helps to make companies leaner and more efficient by reducing waste, competently utilizing human capital, and becoming focused on greed-driven practices of capital acquisition at any cost, which has often proven to backfire financially. My personal position is in support of social responsibility, largely due to the ethical implications. There is a myriad of challenges that the world faces, from labor exploitation to climate change. Many of these are caused by corporations acting socially irresponsible. Therefore, companies can not only correct the negative impacts but use their significant financial resources in cooperation with governments and non-profits to drive sustainable and meaningful change.
References
Baba Abugre, J. (2014). Managerial role in organizational CSR: Empirical lessons from Ghana. Corporate Governance, 14(1), 104-119. Web.
Geethamani, S. (2017). Advantages and disadvantages of corporate social responsibility. International Journal of Applied of Research, 3(3), 372-374. Web.
Serafeim, G. (2016). The fastest-growing cause for shareholders is sustainability. Harvard Business Review. Web.
Wickert, C., & de Bakker, F. G. A. (2019). How CSR managers can inspire other leaders to act on sustainability. Harvard Business Review. Web.
