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).
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