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The term Corporate Social Responsibility (CARS) denotes “the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner’ (“Corporate Social Responsibility”, n. D. ). CARS which is also known by the names like strategic philanthropy, corporate citizenship, social responsibility etc, contribute a lot to the maintenance of a good public image of an organization and the process itself is very much important for businesses to make clear before their stakeholders the businesses actual role in the society.
Today without being socially responsible a corporation is not going to sustain itself properly and every large business organization today, in order to taste success and secure the social license, must operate in an economically, socially, and environmentally responsible manner adhering to the principles of Corporate Social Responsibility. In this era of globalization and transubstantiation firms must operate responsibly in order to sustain their public image and their success.
It is noteworthy that as firms take advantage of global opportunities, “there is an increasing understanding that incorporation of responsible practices into investments and operations abroad not only benefits the local economies and communities, but makes good business sense” (“Corporate Social Responsibility”, n. D. ). Businesses which are either operating locally or internationally, must keep in mind the fact that the common public somehow know how ethically the organizations are actually operating and thanks to the different forms of media such knowledge is widely available in the context of the present day.
If profit-making organizations want to generate profit in a sustainable manner, then they have to be ethical in their approach and in their practices. Ethical business behavior is an important element in every business and today’s corporate giants must emphasize on developing this aspect more and more everyday to retain the faith of the society in which their businesses are being operated.
There can be many definitions of business ethics but in a simple form business ethics is “coming to know what is right or wrong in the workplace and doing what’s right – this is in regard to effects of products/services and in relationships with stakeholders” (Gabbler, . D. ). So, it can be understood that to be sustainable and to accomplish success today’s organizations must be ethical in their operations and there is a strong relationship between ethical behavior and social responsibility.
Corporate Social Responsibility and business ethics are intrinsically related. To provide a precise definition of Corporate Social Responsibility it must be conveyed that it is a “business philosophy which stresses the need for firms to behave as good corporate citizens, not merely obeying the law but conducting their production and marketing activities in a manner which voids causing environmental pollution or exhausting finite world resources” (Juicier, 2014).
It is a fact that CARS includes the approach on the part of an organization to ensure the wellbeing of the society and the stakeholders in an appropriate manner and this is also the working principle of business ethics. In other words it can be said that a socially integrated company “does not limit itself to incorporating in its strategies decisions designed to ensure that the activities making up its value chain do not harm society, but also seeks out and develops investments that can generate important benefits for society while increasing its competitive advantage and raising its performance” (Cavalier, 2007, p. 0). To be ethical means to be always watchful towards averting from any such action or approach that might affect the society and its population as a whole and organizations who aim at generating continuous profit keeping intact the public image must adhere to the policy Of Corporate Social Responsibility because such organizations must always be careful about embracing a behavior that, in the long run, is going to produce benefits not only for the stockholders, but for the stakeholders too.
Today’s large corporations must be very much aware of the fact that aversion from the theory of Corporate Social Responsibility and irresponsible behavior towards the stakeholders both have “negative repercussions in terms of jobs lost and harm done to different categories of parties involved” (Cavalier, 2007, p. 31). If organizations want to be ethical then they have to assume some basic social responsibilities. It must be noted that it is never feasible for or desirable of a business organization of repute to overlook or undermine the importance of taking the responsibility of protecting the environment.
If an organization wants to operate or do its business ethically then one primary responsible on its part would be to ensure that none of its operations or products is actually putting the environment and ecology at stake. Today’s organizations must be aware of the fact that the need to protect the environment focuses organizations’ attention “on the role played by society in defining companies’ operating and strategic choices: growing concern about pollution levels has forced companies to adopt more thorough, precise policies, often innovative and complex, to protect the natural environment” Cavalier, 2007, p. 7). And this drive and willingness is an essential aspect of Corporate Social Responsibility which more and more organizations today are emphasizing on. Considering the need of the hour business organizations must stay focused on carrying on with their Corporate Social Responsibilities along with focusing on the processes of profit generation and profit minimization. It can be interesting to learn that there is a close relationship between being socially responsible and generating and maximizing profit.
Practicing Corporate Social Responsibility means promoting the Utilitarian Renville that conveys that, ‘That which produces the greatest good to the greatest number is ethical, and everything else is unethical” (Normal last, 2008). Carrying on Corporate Social Responsibilities means doing good to the greater number of stakeholders (including the consumers, the customers, the members of the community around which the business is operating, the members Of the society which is being directly impacted on by the operations of the business etc. And hence, being ethical. It is noteworthy that being socially responsible is being profitable and this mantra has been now understood by myriads of large corporations operating globally. One should learn the fact that “Modern theoretical and empirical analyses indicate that business organizations can surely benefit from being socially responsible and getting involved strategically in socially responsible activities can actually earn and increase private profits for the concerned organizations.
One should admit the fact that “Given that firm’s stakeholders may value the firm’s social efforts, the firm can obtain additional benefits from these activities, including: enhancing the firm’s reputation and the ability to attract more highly qualified personnel or the ability to extract a premium for its products” (Hernandez- Muriel & Martinet, 2009). Moreover, it must be also noted that good CARS practices are always beneficial in terms of financial objectives of an organization.
As a matter of fact “CARS practices mitigate financial risk and therefore protect the balance sheet from adverse shocks. These wealth- protective effects are essentially captured in a corporations’ stock market valuation and are usually signaled to the market through listings on sustainability indices like the Footstool or DOD Jones Sustainability Index” (Whitman, n. D. ).
So, it can be seen that Corporate Social Responsibility has the potential to provide a sustainable financial position for a business organization and this can be said because good CARS practices promotes the position of a company in specific indices showing less proneness to financial risks and “In theory investors are willing to pay a market premium for stocks that have a lower financial risk, thus making executive and shareholder stock more profitable” (Whitman, n. D. ).
Furthermore, organizations must stick to the policy of incorporating social responsibilities in their vision and mission because Corporate Social Responsibility as a process has a great potential in adding more value to the organization practicing it and it is noteworthy that “CARS adds most value when environmental and social objectives are aligned with business objectives. In this way CARS activities become central to an organization’s strategy benefiting both the financial performance of the firm as well as generating a societal benefit” (Whitman, n. D. ).
There are myriads of says in which organizations can become socially responsible. By adhering to different strategies any size of corporation can get transformed into a socially responsible organization and this transformation is good both for the organizations’ public image and for its objective of profit minimization. A business organization has before it myriads of options to get involved in the practice of good CARS. Primarily, business organizations can become more socially responsible by getting involved in philanthropic monetary contributions for different social causes.
For an instance, if a business organization can provide financial aid to local charitable, educational and health-related organizations which are willing to assist under-set-Veda or impoverished communities then such a business organization Can actually assist a large number of people in acquiring those marketable skills that are effective in reducing poverty, providing education and in helping the overall development of the surrounding environment of the concerned communities (Davis, n. . ). It must be mentioned that emphasizing on the aspect of philanthropic contributions on the part of business organizations there have en the establishment and growth of several foundations which focus on global initiatives including funding for education to backward classes, funding for health and agricultural issues, funding for works related to development of new medicines and vaccines to prevent the spread of menaces like polio and HIVE/AIDS (Davis, n. . ). Apart from philanthropic endeavors, business organizations can also claim their inclination towards and firm believe in the concept of Corporate Social Responsibility by engaging in socially responsible investing and this might be done by using positioning to exert a sort of erasure of businesses to adopt behaviors which can be called socially responsible.
As a matter of fact, organizations can do this by using media and Internet distribution for exposing myriads of potentially harmful activities indulged by some specific businesses and such efforts creates an educational dialogue for the stakeholders (including the common public) eventually by raising the degree of social community awareness (Davis, n. D Moreover, in this regard it should be noted that “This kind of collective activism can be effective in reaching social education and awareness goals.
Integrating a social awareness strategy into the business model can also aid companies in monitoring active compliance with ethical business standards and applicable laws” (Davis, n. D. ). There are different other ways too, following which business organizations can become more socially responsible and thereby, more ethical in their operations and in their interactions and approaches. Corporate giants like Samsung have got involved in different practices that have helped the growth of their public image as socially responsible organizations.
Samsung, for instance, in order to carry on with social susceptibilities gives approximately 5. 7 percent of annual pretax profits to charity; the company treats its customers with honesty and fairness; treats every of its employees with dignity and emphasizes on their concerns; permits its employees to do volunteer work in times of emergencies like providing relief to disasters on company time; and by pursuing all those policies which can be compositely termed as environment-friendly (Normal last, 2008).
Then there are organizations like Ben & Jerry Ice Cream which are always willing to get involved in good CARS practices by organizing and rooming community action teams which are responsible for ensuring the overall wellbeing of the concerned communities. Ben & Jerry Ice Cream itself gives about 7. Percent pretax profits to charitable causes and apart from organizing and promoting community action teams, the company also chooses specific social mission suppliers (Normal last, 2008). So, it can be seen that there are many different Ways and strategies adhering to which business organizations can get involved in the process of carrying on with the Corporate Social Responsibilities and eventually emerge as organizations with throng Business Ethics and stronger public image.
In conclusion, Business Ethical Behavior & Corporate Social Responsibility are intrinsically related and so business organizations must incorporate the elements of Corporate Social Responsibility in almost all of their endeavors, aims, and objectives to promote their public image, their business ethics, and to secure their goal of profit-generation and profit-minimization.
Today without being socially responsible a corporation is not going to sustain itself properly and every large business organization today, in order to taste success and secure the social license, must operate in an economically, socially, and environmentally responsible manner adhering to the principles of Corporate Social Responsibility.
It is noteworthy that if profit-making organizations want to generate profit in a sustainable manner, then they have to be ethical in their approach and in their practices. Business ethical behavior is an important “must have” element to be seen openly in every business and today’s corporate giants must emphasize on developing this aspect more and more everyday to retain the faith of the society in which their businesses are being operated.