Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a concept which has become dominant in the business
world.
The broadest definition of CSR is concerned with what is the relationship between
corporations, governments and the local society at large in which it resides or operates.
According to the European Commission (EC) (2002): “CSR is a concept whereby companies
integrate
social and environmental concerns in their business operations and in their interaction
with their stakeholders on a voluntary basis.”
In that sense, there are three basic principles which together comprise all CSR activity:
sustainability, accountability and transparency.
Thus, the concern with the effect with actions taken in the present has upon the options
available in the future; the fact that the organization could assume responsibility for the
effects of its actions, and the possibility that the external impact of its actions can be
ascertained from an organization´s reporting, constitute the philosophical body of CSR.
However, the CSR concept has advantages and disadvantages.
The proponents of CSR believe that potential advantage outshine its possible
disadvantages. They are:
- Can help with retention of the labor force in industries where a attrition rates are high.
- Can help to create a loyal customer base toward the company motivated by ethical
conduct of the organization. This might help in brand differentiation.
- Create sustainable business models that can promote public interests and support
innovation, all this being respectful with the environment.
Other advantages: reduce corporate risk like scandals, fraudulent brankutcies, very
high managers salaries, disrespect for basic values.
With respect to the disadvantages, are two who emerging with prominence: cost and
´greenwashing.´
First, costs fall disproportionately on small business. Mayor corporations can afford to allocate
a budget to CSR reporting to customers and the community, and thus it takes time to
monitor exchanges and could involve hiring and extra personal that the small business may
not be able to afford.
Second, ´greenwashing,´ is that when some companies talk about CSR but do nothing
about it.
Moreover, some critics believe that CSR can be an exercise in futility. Milton Friedman, a
leading economist, argues that making CSR is useless and ever potentially dangerous
since it goes against the basic aim of doing business: making profit. This conflict of interests,
can even harm the business enterprise and the economy.
In conclusion, CSR is a form of practice whereby business house world monitor its own
functioning according to ethical standards, law and international norms. It would also keep
in mind the welfare of the environment, actively promotes the interest of the community
and eliminates practices which are potentially harmful to the society. In short, what is
called the triple bottom: people, profit and planet. However, its must balance the financial
expectations of the company owners with the social and environmental requirements of
others stakeholders groups.