Part 1: Questions One & Two: Corporate Social responsibility or CSR can be understood in terms of being a corporate form of self-management which works in combination within a business model. What happens is that a CSR policy is supposed to work as an integrated, built-in and self-managing device with help of which a given business monitors and ensures its obedience to law and to moral standards of society, including international requisites. Most corporates shoulder the burden for the results that the dealing of the business have on the ecology, buyers, workers, the public, and on all those who are involved or affected by the working practices of the business in question.
Moreover, the business would preemptively endorse public interest by ensuring and helping community development programmes via active participation. In order to do this they willingly exclude routines that cause harm to the public, irrespective of legality. In essence, CSR is a deliberate attempt to include public interest in corporate executory management, yet honoring the triple bottom line of business: People, Planet and Profit. Like any other theory or model of management and running a business the policy of CSR too has its proponents and critics.
It has been subject to much debate. It has been argued by supporters that there exists a huge commercial justification for CSR, because companies profit in various manners by working with a standpoint that is broader than their own short-term benefits. Arguments against the policy however state that it serves to sidetrack from the basic economic role of businesses i. e. profit making; it has also been described as “window dressing” and an attempt to deflect the governmental monitoring of the multi nationals(William W, David C, 2005)Having understood the fundamentals of what constitutes CSR, the main issue can now be addressed in detail.
Whether or not following a CSR centric policy can help a company and its economic competitiveness is a matter of debate. There have been very comprehensive arguments that have been made by many to suggest that CSR is a policy that can in the long run help a business in a manner which might not be tangible but nevertheless has an impact that can be felt on the top as well as the bottom line of the company which is to be studied.
Commercial competitiveness is a factor dependent on a host of other factors. If one was to enumerate the ways n which CSR helps a commercial organization it becomes clear that the benefits though not visible or tangible are still as important as any other. CSR by definition is ethical, legal and philanthropic behavior in the workplace, market and community. By this definition it should only be a ‘Do-gooder’ kind of work that a commercial venture does.
There are however reasons to believe the opposite. Corporates work for profit not for philanthropy. The basic points that run in favour of the policy are: CSR first and foremost helps in the risk reduction. Reputations that take years to build are often gone in the dust in a matter of days. Scandals related to corporate dealing and environmental issues have in the past played havoc with a company’s credibility in the market, credibility that is essential in order to build and maintain a customer base.
CSR initiatives help in a way of preemptively putting up a screen and protecting an image. A company which has robust internal management rules in order to ensure that there is a system to protect environmental degradation will have an automatic shield to its reputation which in the ultimate analysis will show in the lower financing costs for that particular business. CSR is also a help and a boost to brand image. Constructive hype and publicity that are generated through CSR undertakings can help fortify the company's brand image as well as help in the establishment of market control, thereby improving it’s basic levels and capacity to create wealth and reap profits.
It has to be understood that the market today is crowded with names each one vying to get the consumer’s attention. By following the policy of CSR a company can be in the limelight for all the right reasons thereby marking it as different and making the consumer not just remember it but also think highly of it. For any kind of success in a given corporate in house stability and maximum output contribution from the staff is a necessary pre requisite.
A CSR initiative can work as a recruitment and retention agent. Perception, in today’s world holds immense importance. CSR initiatives can for obvious reasons helps portray a corporate's image in a better light not just to the outside world but within its own offices thereby working towards the augmentation of employee output. Last, the very number of corporates that are engaged in the activity and the full fledged CR departments now existing in most corporate boardrooms is proof enough of the fact that it does in some manner or another help in being commercially competitive.