According to Schermerhorn (2012), Corporate Social Responsibility (CSR) is an organisation’s obligation to act in ways that serve both its own interests and the interests of stakeholders, representing society at large. Sustainability is an important social responsibility goal.
Discuss this statement using an organisation to illustrate CSR practices. To do this you should describe, apply and critically evaluate the applicability of relevant theoretical concepts in influencing sustainability practices in your chosen organisation. Consider multiple perspectives: stakeholders will have different and sometimes conflicting interests.
As per Schermerhorn, CSR can be defined as the obligation for the companies to serve the society at its best. Corporate social responsibility is topic that has been researched intensively because of its popularity amongst the organisations these days. It is the concept that has developed gradually from the theory to the actual management practices in the organisations. It is involved in the management practices in order to enhance the image of the company. This is the essay that argues about the various corporate social responsibility theories and their relation with the concept of sustainability (Lindgreen & Swaen, 2010). Understanding the concept of sustainability in CSR practices is also very important because it is one of the major reasons for implementing CSR activities. Some of the theories that have been discussed in this essay are triple bottom line theory and the theory of stakeholder’s. The company that has been used to study the practices of CSR is IKEA which deals with home appliances and is considered as one of the major companies that follow the CSR policies.
Corporate social responsibility has many forms. Any practice that the company conducts in order to serve the society falls under the corporate social responsibility. It develops the situation where not only the society gets the benefits but the company also get benefited in terms of enhanced brand image. The major aim of the businesses is to earn revenue and also to serve the society at the same time. This requires the company to engage in the practices that helps the society to develop in return of the earnings they get from the society. Sustainability is one of the major aspects of corporate social responsibility because being sustainable in its practices also helps the company to contribute for the society’s good (Tai & Chuang, 2014). Sustainability is considered as the need of hour and thus it is required by the companies to engage in the practices that are sustainable by making their processes sustainable in nature. It is the term that basically means the practices that benefits the present generation but could not harm the environment for the sake of the future generation. There are three major theories of corporate social responsibility such as corporate social responsibility theory, stakeholder’s theory and triple bottom line theory. As the concept of sustainability is considered, triple bottom line and stakeholder’s approach considered sustainability and CSR as the integrated concept (Crowther, 2008). As per triple bottom line theory, the leaders of the organisation not tabulate the results only in terms of economy but they also consider the aspects of social realm and environment. According to this theory economic sustainability is the sustainability that deals with long term profitability of the business rather than short term benefits. Social sustainability deals with the practices by the organisations that does not harm the sentiments of any of the community of the society and the last one the environmental sustainability that deals with practicing the activities that least harm the resource available in the environmental and making the process sustainable. All these there notion of triple bottom line approach deals drives the business to conduct the activities that supports the society’s benefits instead of becoming a money machine. Another theory is stakeholder’s approach. As per this approach, there are many stakeholders of the company and thus they have different expectations from the company (Przychodze? & Przychodze?, 2014). Considering the expectations and requirements of all the stakeholders and making the policies in order to fulfil the same is the responsibility of the company. This makes the company a responsible corporate. Some of the major stakeholders of the company are shareholders, employees, customers, suppliers and communities. All these have different needs and companies have to fulfil the same. Shareholders want that the company should earn higher profits every time so that they get their part while the employees want to get the handsome salary and good working environment at the company (Crane & Matten, 2007). Customers may expect that the company should provide them the quality products in affordable prices and communities wants the companies to invest for some social causes. Most of the companies these days are collaborating with the NGO’s so that they can do charity out of some percentage of their profits. This is used as the marketing strategy by the companies to have a good brand name in the market. There are companies who are performing their responsibilities very gracefully and supporting the society along with getting high revenue benefits along with enhanced brand image (Dahlsrud, 2008). One of those companies is IKEA. The below section clearly explains the practices of IKEA which makes it responsible socially as well as sustainable in nature.
This is the company that operates in the industry of how and furniture appliances. Its processes are very much sustainable in nature and one of its policies to deal with only the sustainable supplier’s works into the benefits for the company. The company is very much known for its sustainable practices that make it socially responsible (Málovics, Csigéné & Kraus, 2008). Most if the products that the company launch in the market use very less energy as compared to other products that are in competition. The company also provides these products in comparatively low provide which makes the products affordable for all. Some of those products are LED lights, energy efficient products of home and kitchen. All these products are considered as environment friendly because they are using very less resources. As far as the process of the company is considered, it has been analysed that it makes very less usage of energy in the prices of manufacturing and using the stage of lean production that eliminates the unproductive activities in the process (Andersen & Skjoett-Larsen, 2009). The strategy of recycling and reusing also helps the firm to make effective use of the resources and the waste produced. One of the major strategies that the company follows is dealing with the sustainable suppliers. The company is not only making its own processes sustainable but helping the suppliers to make their process sustainable in nature, and only dealing with the suppliers who have sustainable approach to manufacture and work. This ultimately makes sustainable supply chain of the company.
All the strategies that have been used by the company are benefitting each and every stakeholders of the company (Strand, 2009). Making the price low helps the customers to buy the production affordable pieces and at the same time giving large profits to the company because of economies of scale. This fulfils the responsibilities of the company towards shareholders as it has the capability to provide great revenues and profits to the shareholders. As triple bottom line approach is considered, it has been analysed that the products of IKEA are socially, economically and environmentally sustainable and thus the company is following this approach in its practices (Benn & Bolton, 2011). IKEA is serving the society and earning their profits at the same time. This is reasons why the company is well known in the market and has its competitive edge over other competitors in the market.
The clear evidence of sustainability and corporate social responsibility has been given in this say with the study of IKEA. Examining the practices of IKEA helped in understanding the concepts of sustainability and CSR along with their integration (Montiel, 2008). The company shows that sustainability is the very integral part of CSR practices and managing both the aspect collectively can help the firm to develop a situation where it can fulfil all its responsibilities along with earning high amount of profits. It has been analysed integration the CSR practices and sustainability develops a new ways for the companies to achieve success in terms of economy, society and environment.
This essay determines that corporate social responsibility is the policy that not only helps the society but making the organisations to have a competitive advantage in terms of brand image. This is because if the company is doing enough for the society, society gives it back and it can easily develop its image (Morhardt, 2010). Sustainability is shown as the most important part of CSR. There are many theories that show the integration of sustainability and CSR approach such as triple bottom-line and stakeholder’s theory which are discussed in this essay. IKEA is the company that follows both the approaches in its practices and thus it considered as en of the most sustainable companies. The company also engaged in many CSR activities that provides company with a great brand image. All the stakeholders of the company have different demands and companies have to develop the policies that include all the stakeholder’s benefits.
References:
Andersen, M., & Skjoett-Larsen, T. (2009). Corporate social responsibility in global supply chains. Supply chain management: an international journal, 14(2), 75-86.
Benn, S., & Bolton, D. (2011). Key concepts in corporate social responsibility. Sage.
Crane, A., & Matten, D. (Eds.). (2007). Corporate social responsibility (Vol. 2). Sage.
Crowther, D. (2008). Corporate social responsibility. Bookboon.
Dahlsrud, A. (2008). How corporate social responsibility is defined: an analysis of 37 definitions. Corporate social responsibility and environmental management, 15(1), 1-13.
Lindgreen, A., & Swaen, V. (2010). Corporate social responsibility. International Journal of Management Reviews, 12(1), 1-7.
Málovics, G., Csigéné, N. N., & Kraus, S. (2008). The role of corporate social responsibility in strong sustainability. The Journal of Socio-Economics, 37(3), 907-918.
Montiel, I. (2008). Corporate social responsibility and corporate sustainability: Separate pasts, common futures. Organization & Environment, 21(3), 245-269.
Morhardt, J. E. (2010). Corporate social responsibility and sustainability reporting on the internet. Business strategy and the environment, 19(7), 436-452.
Przychodze?, J., & Przychodze?, W. (2014). Corporate Social Responsibility for Sustainability. Management and Business Administration. Central Europe, 22(2), 90-97.
Strand, R. (2009). Corporate responsibility in Scandinavian supply chains. Journal of Business Ethics, 85, 179-185.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117
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