principles of corporate social responsibility

principles of corporate social responsibility

principles of corporate social responsibility

This study will examine eight such principles of CSR necessary for cultivating and sustaining economic growth in a democratic and free market society. The employees of the entire STIHL Group conduct themselves accordingly. It’s about making sure that what you buy has been grown, caught or made with ultimate care for the environment and that workers are treated fairly. Wettstein, Florian. 10 June 2016. As a consequence, the machinery and equipment were dated and not optimally functioning. Miller, Terry, and Anthony B. Kim. Without exception, the managers articulated the importance of communicating CSR initiatives and policy to their employees, as well as recognizing the need to improve their CSR internal communication strategies. PMC. Gorodnichenko, Yuriy, and Gerard Roland. Democratic societies with thriving economies depend upon three primary components: free enterprise, rule of law, and individual initiative. Business Horizons 34.4 (1991): 39-48. Economic Freedom). Understand that corporate social responsibility, like any other goal and objective, helps the firm only when aligned with its strategy, vision, and mission. Corporate Principles of Social Responsibility Dassault Systèmes, the 3DEXPERIENCE Company (“3DS”), has the mission to provide business and people with 3DEXPERIENCE universes to imagine sustainable innovations capable of harmonizing product, nature and life. What type(s) of power do the supporters have with regard to the change? Friedman, Milton. Who are the stakeholders (that is, people who have an interest in supporting or resisting a proposed course of action, resolving an issue, and addressing a change)? 28 May 2016. Second, CSR creates various opportunities for a better quality of life, which is a fundamental goal for most people. It also allows the corporation to shape the values of the community by having an invested social presence, and it empowers the company to determine priorities, measure results, and create a competitive advantage through a meaningful, symbiotic relationship with the community. (4) What degree of common good is to be taken into account? Ed. Friedman realized this in arguing that economic freedom begets political freedom and vice versa (7-10). 2 June 2016. Accordingly, all government and business practices ought to observe the inalienable nature of human rights, especially where CSR is implemented (Arnold 1092-95). CSR can be thought of as the challenge organizations face to balance their social responsibilities with that... PARTICULARS:. Thousand Oaks, CA: SAGE Publications, 2008. Companies and organizations that base their strategic decisions on the principle of duty to earn stakeholder trust “are likely to yield a number of strategic benefits, too, and can help manage political, social, and reputational risk.”. Bishop, John Douglas. It just means that while businesses can influence the creation of legislation, it is not their responsibility to create and police laws or to operate as a charitable foundation. A study conducted in New Zealand explored the perceptions of internal stakeholders of New Zealand companies to discover the way in which the CSR, sustainability cultures, and identity are communicated internally. Businesses have a vested interest in the common good insofar as a thriving community means a thriving business. 11, 168). But the common good can only be realized within a broad social framework. Free enterprise is a private economic practice founded upon the democratic principles of liberty and equality dating back to the social contract theory of John Locke (§4-6), which influenced the thought of Thomas Jefferson among other founding fathers of the United States (Jefferson vol. Corporate strategy and the search for ethics. CSP [corporate social performance] appears to be more highly correlated with accounting-based measures of CFP [corporate financial performance] than with market-based indicators, and CSP reputation indices are more highly correlated with CFP than are other indicators of CSP” . (2007). In this way, CSR is a mechanism that protects a corporation’s liberties. 13 June 2016. Web. What strategies can we use to keep the support of the supporters? Robert W. Kolb. Mahon, John F., and Richard A. McGowan. (2006). Web. Click here to see what is still available! (1991). It has a track record of being the most productive, efficient, innovative, adaptable, and job-creating economic system, bringing prosperity and quality-of-life to the most people. Corporate social responsibility and small & medium-sized enterprises (SMEs) Web. Does stakeholder orientation matter? Stinson, Sonya. Classical Greek philosophers such as Plato and Aristotle argued that a successful society must strive for the common good, which for them primarily entailed justice and security. “Individualism, Innovation, and Long-Run           Growth.” Proceedings of the National Academy of Sciences of the United States of           America 108.Suppl 4 (2011): 21316–21319. McWilliams, Abagail, and Siegel Donald. Oakland, CA: Berrett-Koehler Publishers. Corporate Social Performance as a Competitive Advantage in Attracting a Quality Workforce, Business and Society 39, no. VIII. Web. 1092-1095. Vol. Thus, a business’s contribution to the common good must be self-regulated so that individual businesses can determine for themselves the most appropriate CSR practices to engage in without compromising its primary role as an economic actor. 2 June 2016. Despite corporations facing external pressures, not all responsibilities are of equal importance. Therefore, we've published a number of guiding materials and promoted the development of national action plans (NAPs). Ed. To be sure, in today’s contemporary market economy, corporations that implement CSR models into their philosophies of business are thriving, seeing a return in both economic and social capital, especially in long-term gains (see Orlitzky et al.). (2014). Principles Of Economics And Management (3140709) MCQ. But the viability of a particular CSR model is determined by its adherence to the guiding principles that constitute the necessary framework in which a corporation operates while pursuing social goods that are compatible with its functional role in the marketplace. 2 June 2016. Web. These principles are part of STIHL’s corporate culture. Web. Print. Many business scholars do believe that some of these relationships are positive. Similarly, Governance Metrics International, an independent corporate governance ratings agency, found that the stocks of companies run on more selfless principles perform better than those run in a self-serving manner. Each responsibility is a component of any CSR model and requires a careful, proportional balancing (Carroll 40). One consequence is that employees, workers, communities, and the public may not have suffered that crisis and the continuing after effects. Top 20 Corporate Social Responsibility Initiatives for 2017, https://www.smartrecruiters.com/blog/top-20-corporate-social-responsibility-initiatives-for-2017/, Hasbro relies heavily on its strategic brand blueprint to guide its efforts in CSR, innovation, philanthropy, and product development. These principles define Kesko's key economic, social and environmental promises and related communication principles. Ultimately, a healthy economy creates expanding demand for business as human needs are met and aspirations grow, but this requires the private sector to invest capital in a socially responsible fashion. (2000). (1995), The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications Academy of Manage Review, January 1,Vol. If a corporation shirks its primary economic responsibilities in order to engage in ethical and philanthropic ones, then such an entity is not a corporation at all. Web. While the three essential organizations of a successful community form the foundation of every community, there are other elements of communal living that determine whether or not people consider moving to or staying in a community. 13  June 2016. This attracts quality people, reduces employee turnover, and motivates a greater purpose for the organization (Stinson “Why Paying”). (3) Who is to perform the evaluation of both (1) and (2), and when is it to be undertaken? Talcott Parson. Arnold, Denis G. "Human Rights." Web. Madison, James. It is in the common interest of the community that businesses focus on creating wealth as opposed to governing or charitable giving (Mendel 14-15). When implementing CSR practices, corporations must take into consider its constituency or community stakeholders, which is made up of children, adults, and the elderly. Clarke, Liam L. “Investing in Communities—Strategic What?” APCOForum (2015). CSR practices function as investments that benefit corporations in the long-term by taking a holistic approach that maximizes returns by calculating for non-market externalities when implementing business practices (Kauffmann and Olaru 12). Web. Whenever the government exercises its power in such a way that it infringes upon the rights of the citizenry, its authority becomes illegitimate. NPOs are entities whose purpose it is to further social causes and impact the quality of the life of a community by organizing, promoting, and/or funding education, healthcare, the arts, youth activities, etc. The following are two primary ways CSR benefits a corporation. For-profit corporations work to create jobs and stimulate the economy. Carroll explains that economic responsibilities are the most fundamental and serve as the foundation for each subsequent responsibility types because corporations are first and foremost economic actors engaged in market activities for the sake of creating jobs and cultivating economic growth. But if a community is struggling, then businesses will face tougher challenges. Gale Virtual Reference Library. ...MGMT314: Lecture 12 / chapter 9 Ethics and Corporate Social Responsibility ETHICS * Ethics concerns principles of right or wrong conduct * The moral principles and values that govern the behaviour of people, firms or Govt. Corporate Social Responsibility: Doing Well By Doing Good, Business Horizons 50 (2007): 247–254. Our goal is to im… Corporate social responsibility is about contributing to the health and welfare of society and operating transparently and ethically. “Corporate Social Responsibility: What it       really is, Why it’s so important, and How it should be managed?” The Egyptian      Corporate Responsibility Center. Gale Virtual  Reference Library. Principles of Corporate Social Responsibility PRACTICE:. Putnam’s Sons, 1904-5. 12 June 2016. They play an intricate part in the community’s pursuit of the common good by providing the necessary products and services to the community at the most competitive rates while creating jobs and spurring innovation that will beget better products and services. Web. Dvorak, P. (2007). Walt Disney Company’s social mission to strengthen communities states that “by providing hope, happiness, and comfort to kids and families who need it most”. (2014). Apple was named by the environmental organization Greenpeace as the “greenest tech company in the world” for over three years because that firm’s packaging is manufactured with 99 percent recycled paper products. Virgin Holidays donates £200,000 annually to the Brandon Center for Entrepreneurship Caribbean to support young entrepreneurs in Jamaica.”. The object of a CSR model should include a concern for human rights. The Benefits of CSR to a Corporation. 1 June 2016. 500-504. Carroll indicates the types of responsibilities in a hierarchy beginning from the bottom up as demonstrated in Figure 1. A positive relationship with staff in organizations through CSR policies will not only attract better employees, it will also influence the morale, motivation, and loyalty of existing staff. For free enterprise to exist a rule of law must establish and protect the rights of individual citizens to possess private property and to employ that property according to each one’s will. Web. Which is not a characteristic of corporate social responsibility? Corporate social responsibility (CSR) is a company strategy that ensures the facility’s operations are beneficial and ethical for society. Clarke explains that “community investment and engagement efforts that are really aligned with firms’ goals, assets and values can produce demonstrable community and company benefits” (“Investing in Communities”). The Unites States Department of Agriculture Economic Research Service (USDA ERS) reported that the populations of rural communities have declined over the past half-century to account for just 19 percent of the total U.S. population. 10 June 2016. Academy of Management Review, 24, 233–236. With a business portfolio that includes such well-known brands as Nerf, Play-Doh, Transformers, and Mr. They write, “Individualist culture attaches social status rewards to personal achievements and thus, provides not only monetary incentives for innovation but also social status rewards, leading to higher rates of innovation and economic growth” (21316). Where one is not able to operate without inefficient or unjust overreach, another is able to step in to see to it that the void in the communal welfare is filled. However, more corporations are moving to implement CSR into their business models because over the past couple decades there has been an increasing demand in society for businesses to implement socially and environmentally responsible practices (Moon 15, 81). Human rights are the cornerstone of developed democracies and marketplace activities. However, in some cases, government entities can work closely with businesses and NPOs to achieve an objective that is good for the community as a whole, so long as it is in a manner that promotes liberty and equality (Mendel 16-17). 10. Kaufmann, Malte and Marieta Olaru. “The Engagement Gap: Social Mobility and Extracurricular Participation Among American Youth.” The ANNALS of the American Academy of Political and Social Science 657.1 (2015): 194    207. A study by Horizon Media’s Finger on the Pulse found that “81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.”, The 2015 Cone Communications Millennial CSR Study found that “[m]ore than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average), and two-thirds use social media to engage around CSR (66% vs. 53% U.S. average).”. The notion of the common good serves as a lynchpin for a community; it unifies the community in the joint pursuit of some goal the community considers to be essential to the whole and to the well-being of its individual members. “The Central Role of Economic Freedom in Democracy.” Issues of Democracy     (December 2005): 6-9. Carroll, Archie B. This does not mean that a corporation cannot realize them simultaneously, nor does it mean that a corporation must function unethically until it has realized its economic responsibilities, rather it means that each preceding responsibility is a necessary precondition for those subsequent responsibilities. There are several methods for analyzing stakeholder transactions and relationships with an organization that go beyond the purpose of this chapter. 1, pp. Similarly, though businesses can work alongside NPOs for public policy or philanthropic purposes, businesses must not operate beyond the bounds of the market when these activities threaten a business’s primary role in society (Moon 28-29). Web. In the 21st century, sustainability and corporate social responsibility (CSR) have become strategic imperatives for organizations as fundamental market forces for financial viability and success, where consumers are important stakeholders. It’s also about our incredible suppliers, being fairer to farmers, raising money for great causes, … He recognized these traits to be the founding principles of American capitalism, which had its roots in the Reformed tradition of the Puritans. And almost no large public company today would want to be seen unengaged in CSR. Weber regarded the practice of individual virtues, e.g., integrity, discipline, skill, in labor and in relationships as the cornerstone of any strong, capitalist society (31). How do sustainable business practices benefit consumers? . In a study on the correlation between extracurricular and communal participation and social achievements among American youth, Snellman et al write, “Participation in extracurricular activities is associated with positive youth outcomes such as higher education attainment and greater future earnings” (194-95). Corporate Social Responsibility: A Very Short Introduction. 65-91 ; and Weiss, J.W. Chicago: University of Chicago Press, 2002. This means that CSR practices cannot be forced upon a company by law, nor would such an imposition be desirable since each CSR model is customized to fit the particularities of the individual company and its stakeholders; there is no one size fits all CSR model. While it is the responsibility of all CSR models to observe human rights, it is not the responsibility of corporations to take upon themselves the role of society’s benevolent benefactor, especially when such a role would threaten the primary social role of business: job creation. Our corporate responsibility plan is driven by 5 principles - community, people, customers, suppliers and environment. In a democratic society, the power of authority rests in the people. “CSR and the Debate On Business and Human Rights: Bridging the Great     Divide.” Business Ethics Quarterly 22.4 (2012): 739. syr seven principles of corporate social responsibility (csr) THE ENVIRONMENT We take our environmental and social responsibility extremely seriously and we are committed to developing our business towards ecological, social and economic sustainability. Although the most significant company objective is to reap profits, concentrating solely on profitability is not sufficient in the current world. Menichini, T. and Rosati, F., “The Strategic Impact of CSR Consumer-Company Alignment”, Procedia- Behavioral and Social Sciences, 109 ( 2014 ) 360 – 364, and Becker-Olsen and Hill, “The impact of perceived corporate social responsibility on consumer behavior”, Journal of Business Research, 59 (1) (2006), pp. Smith, Thomas W. “Aristotle on the Conditions for and Limits of the Common Good.” The         American Political Science Review 93.3 (1999): 625-36. Howe… Donaldson T. and L. Preston. We follow the Universal Dec- NPOs work to meet the needs of the community that arise outside the immediate purview of the other two. 1 June 2016. Thus, all CSR practices that a business implements must not impede the role of the business in the tripartite equilibrium sustaining the community or else the business runs the risk of undermining the welfare of the marketplace or the community. The Federalist. Based on this approach, an organization’s leaders and officers inform, involve, obtain feedback from, and influence each of their stakeholders with regard to strategy, issues, or opportunities the organization pursues. (5) What costs are to be considered in such assessments of the common good? Orlitzky, Marc, Frank L. Schmidt, and Sara L. Rynes. Vásquez notes that “the freest economies have an average per capita income of $25,062 compared with $2,409 in the least free countries… [and] grow faster than less free economies” (7). Consider that one important difference between the strong economic societies of Western Europe and the United States and the weaker economic societies of Sub-Saharan Africa, many Islamic nations, and some Southeast Asian and Latin American nations is that the latter have varying weaknesses in their rules of law, due to either political unrest and civil war or tyrannical governments, whereas the former have stable governments with rules of law protecting the rights of the people (Gwartney et al. The effective delivery of CSR initiatives also depends on how responsive employees are. Accordingly, when disputes arise, the rule of law provides a judicial framework in which parties can adjudicate each’s claims with an assurance that the issue will be resolved honestly and impartially. Often times they could not speak the language, were poor, and lacked the necessary means of production, but they were resilient and ingenious in their work. In this way, CSR becomes as a public relations marketing strategy that promotes a positive public image and makes employees proud to work for an upstanding corporation, which creates loyalties to the organization from the community and employees alike. What do the resisters stand to gain and lose from the change? Even in The Federalist Papers, Hamilton, Madison, and Jay cite the “public good” along with “private rights”—the two are undoubtedly intertwined—as the central motivators for ratifying the new Constitution of the United States (No. Mitchell-Brown, JoAnna. This page outlines how we promote positive change and take responsibility of our social, environmental and economical impact. Freeman, R. E. (1999). Three Essential Organizations of a Successful Community. Melbourne: Human Rights    Law Resource Centre Ltd., 2006. 10 June 2016. Our social responsibility policies are based on the principles of the United Nations Global Compact and the International Labour Organization's (ILO) Declaration on Fundamental Principles and Rights at Work. This assurance undergirds those social and market activities that produce thriving economies in democratic societies (see Miller and Kim). 2016 Index of Economic Freedom. Weber, Max. For example, people want to know what activities, organizations, educational institutions, cultural experiences, and social groups a community offers. Mineola, N.Y.: Dover Publications, 2002. Davis, Keith. Corporate Social and Financial Performance: A Meta-Analysis, Organization Studies, 24:3 pp.403-441. Ultimately, a companys CSR is established to increase overall engagement. 5). 15 June 2016. Vol. For example, Davis notes that part of the desire of a corporation to implement CSR into its business practices is to avoid having to surrender its autonomy and economic power to non-market oversight by government or watchdog groups (“Understanding the Social” 48). Web. Much like Maslow’s hierarchy of needs, to realize intangible ideals, a community must first meet the most basic of human needs, which require a fair distribution of tangible objects in accordance with some predetermined social agreement. It hinges on the belief that political freedoms and equality foster healthy competition, which spurs innovation and economic growth that may otherwise be hindered by government involvement in or regulations of the free market. Robert W. Kolb. This is why CSR is not simply charity. A sweeter cup. These three conceptual components are interrelated in such a way that the absence of one greatly hinders the effectiveness of the others. Studies have shown a positive relationship between ethical and socially responsible behavior and financial results. It was found that employee behaviors matter, as organizations that are well regarded in the community attract greater external loyalty, have more stable revenues, and face fewer crisis risks. Vol. Web. Corporate social responsibility is about an organization taking responsibility for the impacts of its decisions and activities on all aspects of society, the community, and the environment. Guiding Principles for Corporate Social Responsibility We, as a specialized geo-science corporate group, shall act to resolve our customers’ challenges, thereby contribute to the sustainable development of our society, following the above Management Philosophy and OYO Corporation’s Code of Conduct. Business Ethics, A Stakeholder and Issues Management Approach, 6th ed. Federalist No. includes the moral principles and standards that guide behavior in the world of business; corporate social responsibility (CSR) is an integrative management concept, which establishes responsible behavior within a company, its objectives, values and competencies, and the interests of stakeholders (Meffert & Münstermann, 2005). It creates the framework for our operations and is prerequisite for our success. Corporate Social Responsibility, or CSR for short, is the idea that a company should be socially involved with the environment around itself. CSR and stakeholder management have demonstrated benefits to firms’ reputations and profitability. Additionally, it is important that the community also provides opportunities for eating out, entertainment, and social and cultural events for adults. Bénabou and Tirole identify four factors propelling the trend: (1) the common expectation that social responsibility is a normal good; (2) details about companies’ operations are becoming more accessible and widely disseminated through the efforts of watchdog groups and public demand for greater transparency; (3) an increase in environmental and social externalities resulting from globalization; (4) an increase in public awareness as well as long-run cost of pollution (1-2). Businesses that promote CSR practices contribute to a community’s effort to ensure that people can achieve the highest standard of living possible for themselves, their families, and their friends. Why corporate responsibility makes business sense Web. CSR practices that neglect one or more of these groups would have a negative effect on the whole community, because a lack of concern for or the trust of one generation will, in the long run, effect the others. 1689. 2 June 2016. Top-ranked companies such as Pfizer, Johnson Controls, and Sunoco also outperformed lower-ranking firms on measures such as return on assets, return on investment, and return on capital. Current World this means a careful, proportional balancing ( carroll 40 ) License except... Gwartney et al the health and welfare of society, including corporations, must respect rights. Otherwise noted ( 2014 ) performance as a Competitive Advantage in Attracting a quality,. An illustration of the stakeholder relationships is provided in ( Figure ).The term stakeholder become! Offer to organizations and society 39, no Max Weber ’ s Ethics social! R. ( 2015 ): 403-441 to know what activities, organizations, educational institutions, cultural experiences, Sara. A concern for human rights, UN Doc E/CN.4/Sub.2/2003/12/Rev.2 ( 2003 ) D., Kenett, R.,., not government bureaucrats not a corporation must not be realized before the corporation ’ s problems or the. 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