Question:
Analyse the Concept and theories of Corporate Social Responsibility and how it relates to Ethical Business Practices.
The world today is facing rising social, political and economic crises, which is increasing the need of Corporate Social Responsibility (CSR) like never before, making it more relevant to businesses today. Today’s business growth is getting directly associated with smart investments made in CSR, which is also assisting in attracting and retaining customers and the best talents. CSR is no more just a checkbox in an annual report. It is conventionally perceived as a method of seeking stakeholder approval and trusted brand recognition. CSR has evolved into becoming one of the tactical pillars for complete business growth (Suliman, Al-Khatib and Thomas 2016). I would be discussing in this study about the topic of labor and human rights discrimination inside CSR, taking Apple as a case study, why it should be considered and the different ways in which it can be given importance.
I have noticed majorly in terms of CSR that it is hardly mentioned by the companies in their websites, their reports or their communications, regarding what they are doing in regards to it. I find it quite obvious that this did not come about without any kind of controversy. Approximately a decade ago The Economist published a special report in which it discussed about CSR, opening with the line: “CSR has won the battle of ideas.” But since the thrashing of CSR by Milton Friedman in the New York Times in 1970, it has been argued by the critics that companies just do not possess the capability of catering to the societal needs beyond the production of goods and services at a profit to the stakeholders (Hack, Kenyon and Wood 2014). These critics have always complemented the rise of CSR.
If I look at the present business community and the generic enthusiasm surrounding CSR, then the situation does not actually prove the criticism wrong. If I look more closely, a majority of what the organizations are doing in the area of CSR has never actually transcended the clear cut profit motive of the organizations. I suppose if Milton Friedman visits the present world of CSR he would actually become very pleased. After all, majority of the CSR activities happen with the espoused goal of value creation for the business (Orlitzky 2015). Michael Porter has suggested that instead of just talking about CSR, organizations must concentrate on embracing this concept of shared value creation (Boulouta and Pitelis 2014).
Inside the concept of CSR, human rights hold a very important place, working for the free and equal rights of dignity and inherent rights for all humans. Inside any business, stakeholder engagement is quite essential for their effort in meetings the CSR standards for respecting this human rights. Many organizations are having separate systems and procedures for carrying out a wide range of stakeholder engagement activities. There are certain important things that requires attention while consulting stakeholders in major situations, like identification and assessment of real human rights impact, tracking and reporting about organizational efforts for prevention and management of these impacts, and designing of effective grievance systems and remediation procedures (Schrempf-Stirling, Palazzo and Phillips 2016).
The simplest reality that I can see is that the CSR that has been adopted by majority of the organizations have done almost nothing for convincing the common public that organizations are actually positively contributing to the society (Su et al. 2016). One such example of an organization is Apple. Back in 2009-2010, multiple suicides took place at Foxconn, one of Apple’s suppliers. Reports by the Chinese local press stated that the working hours were excessively long and the Taiwanese superiors showed discrimination towards the mainland Chinese workers. A total of 13 workers committed suicide, the reason of which was found out by an undercover investigation to be internal management. The workers were not allowed to be interacting with one another, and if they did they there penalized with a fine or at times held being in contempt by the manager. The weekly working hours extended ten hours above the maximum hours that was set by Apple’s Supplier Code. In 2011, there were reports in the media regarding child labor issues getting worse at the supplier side. That year’s Supplier Responsibility Report reported 91 underage workers at the suppliers. The media reports regarding the suicides and the underage labor had an adverse impact on the image of Apple.
Some of the legislations that support human and labor rights are the ILO Tripartite Declaration on Fundamental Principles and Rights at Work, the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, the OECD Guidelines for Multinational Enterprises, the United Nations Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises, the Equator Principles and the United Nations Global Compact. These legislations are in place to make sure CSR and employee rights are in the right place at organizations. I have found that in comparison to the situation ten years ago, today a large number of businesses both small and large are having sustainability reports of their own and are integrating CSR as a section of their daily business activities. The organizations that consider CSR as a direct corporate response to the ever growing consumer demand for transparency (Chernev and Blair 2015).
I have understood from ample research that ignoring the social responsibility of any organization can spell disaster for the. I recommend proper labor and human rights policies being an active part of the business plan of every organization. There is not late in starting to make a difference. Companies care about CSR only because their customers do, as consumers look down upon those organizations that ignore CSR and develop unethical reputations (Korschun, Bhattacharya and Swain 2014). I even recommend using labor rights and CSR practices for increasing the bottom line of any organization, no matter the size of the business as that would be helpful in building trust with employees, customers and even the suppliers. I believe if organizations are doing the right thing then their value can go far beyond the good deed itself. CSR helps in driving better business outcomes, increasing employee engagement, attracting likeminded partners and more such benefits. I believe CSR has started becoming more of a heritage asset, which implies that people are preferring their service efforts for leaving lasting effects. These efforts might be leading to newer partnerships with similar minded organizations.
In order to helping move the organizations in the direction of social responsibility actions and not just in words, then I can first recommend formulation of vision. There is a need of pinpointing what the company stands for on a comprehensive scale (Öberseder, Schlegelmilch and Murphy 2013). The next step that I would be recommending is emphasizing the actions that the organization is passionate about and dedicated towards. Any kind of hypocrisy or discrimination would be leading to extreme criticism. After the initiative has been designed I recommend bringing much exposure to the situation as possible with the help of launch events and public signs. There is also the need of managing the campaign for making sure it carries on running smoothly all along the way. While developing the CSR, I recommend making it sure that the mission is aligning with what the customers and the employees are looking for in the organization.
Conclusion
People generally want supporting the people who are doing something good but even after that they are looking for initiatives for matching up with their own ones. I discussed in this study the reasons why CSR is more than what people think it to be, why it should be considered and the different ways in which it can be given importance.
References
Boulouta, I. and Pitelis, C.N., 2014. Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of Business Ethics, 119(3), pp.349-364.
Chernev, A. and Blair, S., 2015. Doing well by doing good: The benevolent halo of corporate social responsibility. Journal of Consumer Research, 41(6), pp.1412-1425.
Hack, L., Kenyon, A.J. and Wood, E.H., 2014. A Critical Corporate Social Responsibility (CSR) Timeline: how should it be understood now. International Journal of Management Cases, 16(4), pp.46-55.
Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.
Martínez, P. and del Bosque, I.R., 2013. CSR and customer loyalty: The roles of trust, customer identification with the company and satisfaction. International Journal of Hospitality Management, 35, pp.89-99.
Öberseder, M., Schlegelmilch, B.B. and Murphy, P.E., 2013. CSR practices and consumer perceptions. Journal of Business Research, 66(10), pp.1839-1851.’
Orlitzky, M., 2015. The politics of corporate social responsibility or: why Milton Friedman has been right all along. Annals in Social Responsibility, 1(1), pp.5-29.
Schrempf-Stirling, J., Palazzo, G. and Phillips, R.A., 2016. Historic corporate social responsibility. Academy of Management Review, 41(4), pp.700-719.
Su, W., Peng, M.W., Tan, W. and Cheung, Y.L., 2016. The signaling effect of corporate social responsibility in emerging economies. Journal of business Ethics, 134(3), pp.479-491.
Suliman, A.M., Al-Khatib, H.T. and Thomas, S.E., 2016. Corporate Social Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in the Future, p.15.
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