Words: 1420
Corporate social responsibility is basically a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. Corporate social responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the Concept Of sustainable development to the company’s level. Over the last years an increasing number of companies worldwide started promoting their Corporate Social Responsibility strategies because the customers, the public ND the investors expect them to act sustainable as well as responsible.
In most cases CAR is a result of a variety of social, environmental and economic pressures. The Term Corporate Social Responsibility is imprecise and its application differs. CAR can not only refer to the compliance of human right standards, labor and social security arrangements, but also to the fight against climate change, sustainable management of natural resources and consumer protection. The concept of Corporate Social Responsibility was first mentioned 1 953 in the publication ‘Social Responsibilities of the Businessman y William J. Bowen.
However, the term CAR became only popular in the sass, when the German Betrothal, a generic pharmaceutical company decided to implement CAR. The generic market is characterized by an interchangeability of products. In 1 997 a halt in sales growth led the company to the realization that in the generic drugs market companies could not differentiate on price or quality. This was the prelude for the company to adopt CAR as an expression of the company’s values and as a part of its corporate strategies. By using strategic and social commitment for families tit chronically ill children children, Betrothal took a strategic advantage.
In July 2001, the European Commission decided to launch a consultative paper on Corporate Social Responsibility with the title ћPromoting a European Framework for Corporate Social Responsibility’. This paper aimed to launch a debate on how the European Union could promote Corporate Social Responsibility at both the European and international level. The paper further aimed to promote CAR practices, to ensure the credibility 01 CAR claims as well as to provide coherence in public policy on CAR. Responsible Companies in the age of globalization
How a company perceives its societal responsibility depends on various factors such as the markets in which it operates, its business line and its size. In recent years CAR has become a fundamental business practice and has gained much attention from the management of large international companies. They understand that a strong CAR program is an essential element in achieving good business practices and effective leadership. Companies have explored that their impact on the economic, social and environmental sector directly affects their relationships with investors, employees and customers.
Whilst so far Corporate Social Responsibility was mainly promoted by a number of large or multinational companies, it is now also becoming important to small national companies. В??Teflon CompaniesВ??. Shell was one of first companies which made the experience, that early responsible acting is better than later crisis management. Shell was taken by complete surprise when the Greenback campaign against sinking the former drill platform Brent Spar achieved its goals. There was a widespread boycott of Shell service stations. The Brent Spar affair has brought quite some change of attitude to Shell.
As companies face themselves in the context of globalization, they are increasingly aware that Corporate Social Responsibility can be of direct economic value. Although the prime goal of a company is to generate profits, companies can at the same time contribute to social and environmental objectives by integrating corporate social responsibility as a strategic investment into their business strategy. A number of companies with good social and environmental records indicate that CAR activities can result in a better performance and can generate more profits and growth.
Research hast shown that company CAR programs influence to an extensive degree consumer purchasing decisions, with many investors and employees also being swayed in their choice of companies. A major challenge for companies today is attracting and retaining skilled workers. There is not only an image gain for the companies using CAR, but it is also important for the employees. Within the company, socially responsible practices primarily involve employees and relate to issues such as investing in human capital, health and safety and managing change. In India there are an existent but small number of companies which practice CAR.
This engagement Of the Indian economy concentrates mainly on a few old family owned companies, and corporate giants such as the Data and Barilla group companies which have led the way in making corporate social responsibility an intrinsic part of their business plans. These companies have been deeply involved with social development initiatives in the communities surrounding their facilities. Jackhammers, one of the prominent cities in the northeastern state of Briar in India, is also known as Data Magna and stands out at a beacon for other companies to follow.
Jackhammers was carved out room the jungle a century ago. Tat’s CAR activities in Jackhammers include the provision of full health and education expenses for all employees and the management of schools and hospitals. In spite of having such life size successful examples, CAR in India is in a very nascent stage. In the informal sector of the Indian economy, which contributes to almost the half of the GNP and where approximately 93% Of the Indian workforce is employed, the application of CAR is rare.
On the contrary, the fight against poverty, the development of education, as well as the conservation of the environment re not existent in most of the Indian enterprises. India has an advantage as far as labor is concerned. To some extent, business and capital go to those places where costs are less or standards are lower like the ones in India. But also in India, the demand for responsible and ethical goods is constantly Increasing. To guarantee the supply of responsible and ethical goods, it is especially important to implement a nationwide system of CAR standards.
How “social responsible” are Companies in reality? Due to the lack of international CAR guidelines, the practical application of CAR differs and CAR Strategies within most companies still show major deficiencies. There are still complaints about multinational companies wasting the environment and Mongo still denouncing human rights abuses in companies. Some critics believe that CAR programs are undertaken by especially multinational companies to distract the public from ethical questions posed by their core operations.
That meanwhile even multinational companies such as Microsoft or Pepsi confess to their social responsibility, is discussed quite controversial. While companies increasingly recognize their social responsibility, many of them have yet to adopt management practices that reflect it: company employees and managers need training in order to acquire the necessary skills and competence. Pioneering companies can help to implement socially responsible practices by guiding the processes.
The Copenhagen Centre and CAR Europe have recently launched a program to bring the business and academic community together with the aim to identify and address the training needs of the business sector on Corporate Social Responsibility. While corporate social responsibility can only be taken on by he companies themselves, employees, consumers and investors can also play a decisive role in areas such as working conditions, environment or human rights, in the purchasing of products from companies which already adopted CAR or in prompting companies to adopt socially responsible practices.
Critics suggest that better governmental and international regulation and enforcement, rather than voluntary measures are necessary to ensure that companies behave in a socially responsible manner. Corporate social responsibility should therefore not be seen as a substitute to regulation uncovering social rights or environmental standards. In countries where such regulations do not exist, efforts should focus on putting the proper regulatory framework in place on the basis of which socially responsible practices can be developed.
International Initiatives for Corporate Social Responsibility Why are governments interested in CAR? Their task is to make sure that the process of global and economic and social change is managed properly and fairly. Several guidelines or standards have been developed to serve as frameworks for CAR: The COED Guidelines for multinational Enterprises and the ILL – International Labor Standards form the principles for the societal responsibility of companies and will help to implement CAR on the international level.