Introduction
Corporate social responsibility (CSR) is a concept that has become part of the business culture and reporting. Almost all established corporation maintains a CSR policy as part being socially responsible. According to Crowther & Aras (2008), CSR is defined, in broad terms, as the "relationship between global corporations, governments of countries and individual citizens." Narrowly, it is the relationship and interaction between the business and the local society or environment wherein the business resides or operations. In another broader definition, CSR is the relationship of the business and its stakeholders, including internal and external members. This definition stretches the CSR not just to the society, but to all components that are affected or can be affected by the operations and day-to-day activities of the business.
On the other hand, the World Business Council for Sustainable Development defines CSR as the "continuing commitment by business to contribute to economic development while improving quality of life of the workforce and their families as well as of the community and society at large." This sums up the goal of the business which is to generate wealth, create profit, and ensure growth. But the goal of the business must not be singled on that alone, it is necessary for the business to include the welfare of the people within the organization, and the community or society. It must be noted that the definition uses the word “continuing” because CSR does not stop on a single program alone, but this is an on-going process to improve life and ensure sustainability.
Looking closely, CSR must be deeply anchored and rooted on three pillars or dimensions, according to the World Business Council for Sustainable Development, which are: economic growth, ecological balance, and social progress. These three must come together to achieve the goals of the business and its stakeholders. By working together side by side, it would be easier for the business to reach its potential of growth without damaging the environment and while ensuring that society benefits from the growth of the business.
Facts on CSR
According to Vogl (2003), corporate citizenship is characterized by the adoption of a triple bottom line that considers all aspects of the society, especially environmental, economic, and social sectors. This means that the business is not just there to create profits, but it also has some other roles that should be properly met and accomplished. Rather than following merits, rules, and regulations, CSR works on more than what is required of the organization for the common good of the people, and not just the benefit of the organization.
Vogl (2003) further explains that most of the times those companies that adopted a CSR policy are also the ones being questioned and even vilified by the public sector. There is always a room of doubt on the intents and motivations behind the mindset of the company's CSR. Vogl (2003) cites the case of Philip Morris Cos that advertises against teenage smoking. For critics, it was hypocritical for Philip Morris to be against teenage smoking when it is producing and selling cigarettes; for critics, Philip Morris works on an opposite reaction from teenagers to increase sales of the company. Even McDonald is not immune to the criticism of their CSR's on environment sustainability. The rationale of critics is that how can McDonald promote life when it encourages obesity and death from the sickness thereby.
The value of CSR comes to the point wherein employees don't believe their senior leaders are met of integrity who can manage the organization. The distrust between employees on the actions of the organization's management can be traced to the way organization's use their employees' satisfaction as a way to cover-up the mistakes and other wrongful acts committed by the organization just for the sake of profit. CSR should be about making honest profit and the protection of employees as the main stakeholder of the company.
However, Vogl (2003) also noted that CSR is always a business tool for the corporation to benefit from. This means that corporations don't need to be wary in creating CSR policies such as training for employees in form of continuing education because these CSR policies will also yield fruits and results in the future. For those who are skeptical in adopting CSR policies, the lack of cost-benefit analysis of most corporations with regards to day-to-day operation becomes a burden and obstacle that stops the organization from moving forward with an effective CSR policy that benefits stakeholders and the company.
Yet it must be noted that investors are already of understanding that CSR is the only direction organizations can take. Investors don't have to object on the demand of the CSR creation and the necessity of spending for CSR policies. With the increase of CSR funding from investors, it is easy to say that business interest holders are already mature to understand the impact of CSR, both internally and externally. That it is necessary for the organization to adopt a CSR policy that will benefit the triple bottom line of the society.
Ethical Issues
As much as corporate social responsibility and corporate citizenship involves people, there are still ethical issues that may creep in during the implementation and adoption of the CSR. There is always a need for organizations to address these important issues. According to Cavalieri (2007), transparency provides a way for both the organization and other stakeholders to check for abuse of any. Through transparency the public's outrage on the way corporate bodies are covering up their mistakes with CSR policies to poster a good public image would be toned down and reviewed accordingly (Vogl, 2003). The lack of transparency of the way CSR is adopted and implemented becomes a focal point for the failure of the corporate world to explain their side to the public. For instance, with the situation of Philip Morris Cos, the lack of transparent on how the organization conceived the CSR and implements, the cost and benefit of the organization, and its motives and intents is a fundamental root why the public is convinced that CSR of Philip Morris has a negative impact on teenagers and positive impact for the organization as it increases sales.
Transparency helps dispel the question of the bribery, corruption, and massive espionage within corporations. It would stop people from thinking on how the organization gets fund for its CSR and how it affects the taxation of the company and its financial status in the market. With the aid of transparency a dialogue can be made between the organization and its stakeholders.
Another ethical issue is the way CSR affects the organization. Robins (2011) noted that CSR may not have a great positive impact on the profitability of the corporation, and only in seldom cases that CSR has negative effect. This means that it is necessary to see how the organization deals with its employees, quality, and other consideration of the day-to-day operation of the business. It is important for the organization to look at its purpose of implementing the CSR. Rather than looking forward in making profit, CSR should look at the common good and profit is just second in priority.
Conclusion
In making a decision on whether the organization should adopt a CSR, it is always important to look at the way people view CSR. There are areas that provide shadow to the CSR. By crafting CSR policies that are within the guideline of transparency and intents and motives, organization would be able to create and implement a CSR that encompasses social, economic, and environmental aspects. This means that the CSR becomes a CSR that really has an impact on its stakeholders, rather than just being a statement of the organization to poster a good public image. With the aid of the right CSR perspective, ethical issues will be eliminated during decision making.
References:
Cavalieri, E. (2007). "Ethics and Corporate Social Responsibility." Emerging Issues in Management. Symphonya.
Crowther, D. & Aras, G. (2008). Corporate Social Responsibility. Bookboon.
Vogl, A.J. (2003). "Does it Pay to be Good?" Across the Board Vol. 40 Issue 1. Trade Publication.
World Business Council for Sustainable Development. (2013). Corporate Social Responsibility. Retrieved from http://www.wbcsd.org/work-program/business-role/previous-work/corporate- social-responsibility.aspx
