Assessing Corporate Social Responsibility PART THREE

                                                                 

Because of its relative novelty, some firms would claim to be “green” or socially conscious while their claims are not substantiated by real facts. Corporate social responsibility is a commonly viewed tool to enhance company reputation so companies will engage in CSR publicity campaigns when faced with scandals, for example BP oil engage in a vast CSR marketing campaign immediately after a major oil spill in 2012 to repair its damaged public image. In this context, corporations will engage in CSR for the sole purpose of influencing public opinion and building a positive public relations campaign. Faking to be socially good goes against the real spirit of CSR because CSR is doing “good” in the real sense of the term through real prosocial actions: actually solving urgent needs i.e. feeding the hungry, providing drugs to the ill, recycling dangerous chemicals or plastics, building homes for the homeless (Chernev & Blair, 2015).

                                             

            As a mean of authenticating the CSR print of a firm, Entine and Jennings eight questions has parallels with traditional measures of social responsibility especially with questions about transparency, fair treatment of employees and charitable actions. Entine and Jennings rather address ethical concerns than social responsibility concerns, this is a noticeable difference. Compliance with laws, propriety, truthfulness and transparency are core values of business ethics and these ethical values should exist in a corporation before the latter engages in socially responsible acts. A firm involved in illegal activity would not have the moral compass to engage in CSR activities, the two are just not compatible. In the example of Fannie Mae which engaged in improprieties of accounting, reporting and other questionable practices, such a firm cannot perform CSR actions that would be acknowledged since they are not even compliant in their most basic functions. As Adam Smith points it out in his theory of the business enterprise, the firm is an integral part of society and vice-versa as an eco-system of business/society (Gonin, 2015).    

                                                  

References

Jennings, M. (2012). Business ethics case studies and selected readings (7th ed.). Mason, OH: South-

            Western, Cengage Learning.

Gonin, M. (2015). Adam Smith's Contribution to Business Ethics, Then and Now. Journal Of

            Business Ethics, 129(1), 221-236. doi:10.1007/s10551-014-2153-4

Friedman, M. (1970). The Social Responsibility of Business is to Increase Profits. The New York

            Times Magazine. September 13,1970.

CHERNEV, A., & BLAIR, S. (2015). Doing Well by Doing Good: The Benevolent Halo of

Corporate Social Responsibility. Journal Of Consumer Research, 41(6), 1412-1425. doi:10.1086/680089

Assessing Corporate Social Responsibility PART TWO

The argument that doing “good” can be deterrent to the survival of the business is a parallel to the “either or conundrum” advanced under Friedman theory. As an illustration, a grocery store either feeding the homeless to be socially conscious or refusing to feed the homeless for survival of its business (keeping jobs open for its employees, providing a needed service to its community, protecting its thin profit margin, etc.).  The grocery store does not necessarily have two opposing cases at hand: widening the spectrum of alternatives is a better way of thinking than just merely viewing this social challenge as an “either or” solution: perhaps the grocery store can donate groceries near expiration date to the hungry instead of throwing them in the garbage, such solution would not affect the profit margins of the business yet it would help resolve a serious community problem (Jennings, 2012).  

                                                 

 This example alone dismantles Dr. Freeman’s stance on the high costs and marginal benefits of voluntary and socially responsible actions by companies, of course not all CSR interventions are successful and economically viable but a well-planned, studied and prepared CSR program can attain meaningful goals in a sustainable manner.  In some cases, the two are compatible: business leaders can simultaneously run the corporation in the interests of firm stockholders (profits) while upholding interests of customers, suppliers, local communities and employees. A major issue with CSR arises when advancing socially conscious actions is considered an exterior or outside interest: what could be considered outside interests of the firm may actually be very well embedded in the existence of the firm. A corporation operating in a community becomes a part of that community since some of the community members will be employees and consumers as well, or even suppliers. It could also be argued that whatever affects stakeholders will affect the corporation sooner or later, the firm needs stakeholders to exist because they bring revenue one way or another (Jennings, 2012).  

                                                     

            Friedman’s theory advancing the need for a business leader to be an elected official before conducting societal decisions can be countered for many reasons: (1) elected officials often make unpopular and poor decisions, (2) firms can partner with governments in solving world problems (3) some firms are more in tune with surrounding communities than governing bodies because of the dynamics the firm has with its immediate environment (4) firms can be quicker to act than governments or elected officials (5) firms are more efficient at identifying, planning and implementing solutions: a good example is the ability of Coca-cola to globally distribute its beverages in the most remote geographical locations (Jennings, 2012).

                                             

               Although Friedman’s almost cynical view of social responsibility of firms doesn’t properly capture its true meaning, one cannot help but admit that some corporations have used the cloak of CSR to pretend being socially conscious while they were not.  For example, in the cases of Ben & Jerry’s and Body Shop International, Entine and Jennings point out how corporations cannot be always be trusted to actually fulfill the social actions they claim to be taking, similarly even if a firm aims to do well, it will not attain perfection. No firm is perfect even in the execution of its most basic operations of management, human resources, market strategy and others, let alone CSR practices which are in the realm of private enterprise a fairly recent trend (Jennings, 2012).

Assessing Corporate Social Responsibility PART ONE

                                                                   

Corporate social responsibility, more commonly known as CSR is a term that has gained in notoriety in recent years as well as concepts such as sustainability and community-driven initiatives. Corporations are basically designed to generate profits, but even though profit is their main purpose, public opinion and stakeholders have shifted priorities of firms to address social responsibilities of private enterprise. Public opinion has grown expectations of corporations for various reasons, but main obersvations are increased earnings of corporations and impact of operations on the globe: these have consequently placed firms on a higher position of accountability about global issues. So what are exactly social responsibilities of corporations? Can business entities as artificial persons even have social responsibilities? A business is a group of people brought together to fulfill a mission while generating profits so including social responsibilities in the mission or corporate vision does not necessarily alter the monetary goals of the business. Also, the business as an impersonal entity would not be considered to have a conscience but because the business employs people who belong to communities and the business is composed of stakeholders also belonging to communities, it becomes essential that the priorities of the business align with priorities of the communities (Friedman, 1970).

                                    

            Can a firm operate with a total disregard for the communities making up its workforce, consumers, suppliers, shareholders and other stakeholders? Perhaps such a firm can survive but in this new era of social media disseminating opinions and company reputation with lightning speed, firms have to take responsibility in the fact that they are an intricate part of society and being judged by commonly accepted standards. If a corporation chooses to not play a part in any of the many social woes suffered by society, then one can wonder if it is fair for this same corporation to profit from society. If society is to rely on government solely to resolve all urgent matters of communities, can the world realistically attempt to overcome its most pressing challenges? Is it sustainable to wait on governments to battle all environmental issues, income inequality, gender equality, child labor, pollution, hunger, energy starved region, water shortage, etc.?

                             

When considering the sheer power of some corporations, they can be as powerful as entire governments so it is in the interest of humankind that corporations grow a “social conscience”. Corporations have access to vast financial and other resources so they can play a powerful role in our world’s future by preserving nature and empowering communities in need (Friedman, 1970).

            Corporations, hence, have a moral obligation to contribute to the well-being of communities in conjunction with governments. This effort is two-fold: corporations doing “good” improve their public image which improves their “bottom-line” (i.e. more sales) but at the same time attract better talent because of the higher sense of purpose the firm is pursuing. Professionals often work for more than a paycheck, they work for ideals as well and a firm located in geographical space surrounded by communities is exposed to local problems: these community problems can vary from unemployment, infrastructure, crime rate, and cost of living so when firms get involved with their local communities they engage their employees even more because they motivate those professionals working for higher ideals than just a paycheck (Jennings, 2012).