Corporate Responsibility Ethics Management â€Myassignmenthelp.Com

Question: Discuss About The Corporate Responsibility Ethics Management? Answer: Introduction Corporate social responsibility or CSR has become significantly popular in past few decades with the increase in requirement of transparency in business operations and embracing an ethical culture in organisations. It is based on the old concept that corporations should not only focus on enhancing their profits, they should also care regarding their duties as a corporate citizen. The popularity of international corporations has grown significantly due to globalisation, especially in developed countries. CSR policies ensure the social and ethical behaviour of giant corporations in different countries. But there is no strict policy regarding proper implementation of CSR policies. Many large corporations misuse their position even after implementing CSR policies. This essay will analyse different advantages and disadvantages of implementing CSR policies. Further, the essay will evaluate various theories from experts and examine the situation from different companys perspective. Merits and Demerits of CSR Policies Corporate Social Responsibility has been a trending topic in past few decades. With the globalisation of the economy, many organisations have enhanced their business in several countries. In the beginning, most of these corporations focus on making profits rather than developing countries. But the introduction of CSR policies stops companies from misusing their powers and performing certain tasks for development of different parties. As per Crane, Matten and Spence (2013), before CSR policy there were several other regulations such as ethical policies and code of conducts which prevents corporations from misusing their positions, but those policies were often misused by organisations. CSR policies are self-regulated by the corporation, these are policies are against profitability motive and for the goodwill of society. According to the book of Hopkins (2012), managers of large organisations across the globe have accepted the importance of implementing CSR policies in corporations str ategy. In modern times, there are several unethical actions conducted by organisations, such as tax scandal of HSBC. As per Robinson (2015), the bank was letting rich clients evade tax and also overvalued its value in financial statements. Another example is tax evasion scandal in the United Kingdom, in which large corporations such as Facebook, Amazon, and Starbucks was included. These scandals show the requirement of better and strict CSR policies in a large organisation. The role of government has shrunk in past few decades and ethical policies applicability is based on the voluntary and non-voluntary basis. The unethical activities of corporations increased pollution and reduce the natural resources. It is important for organisations to protect natural resources and reduce their carbon footprint. Though the concept of ethical business practices has been known from 1800, due to change in industries and peoples lifestyles, CSR has become popular in previous few decades. According to Joshua (2016), more than 66 percent of customers have said on online platforms that they would pay extra to purchase products from companies which follow strict environmental and social responsibilities. The primary benefit of CSR is that effective CSR policy benefits organisations in retention and recruitment process. The companies which apply an effective CSR policy have more satisfied and happier workers. The reason is that employees feel they are contributing their work to the improvement of society and environment. Few examples of companies with strict and effective CSR policies include Google, Ben Jerrys and Target. Google has been awarded the best place to work several times because of their effective CSR policy. As per Wang (2016), they are a large corporation, but due to their Google Green policy, they use efficient and renewable energy to operate their processes. As per Melo and Garrido-Morgado (2012), other than leaving an ethical impact, there are numerous advantages of applying an effective CSR policy in the organisation. An effective CSR policy enhanced the reputation of the corporation in the market. Worlds largest and most reputed corporations such as Apple, Google, Amazon, Microsoft, and Starbucks are known for applying effective CSR policies. These organisations do not just focus on increasing their revenues instead they give back to society and work better to help the environment. Another benefit of CSR policies is protection and preservation of the environment and its resources. Apple and Google are forming new ways to powering their offices with natural energy. According to Alter (2017), Apple operates 100 percent of their data centers and 96 percent of their other facilities worldwide with natural energy sources such as solar, hydro and the wind. All the products manufactured by Apple are 100 percent recyclable and made with envir onmentally friendly products. Another benefit is that effective CSR policy attracts high capital inflow from different sources. As per the research of Kim, Park and Wier (2012), modern investors prefer to invest in companies with effective CSR policies because these companies maintain transparency in operations and provide full disclosure to its shareholders. Another benefit is the reputation of the company since corporation with better CSR policy has a high reputation in the market. The change in lifestyle of people has increased the demand for environmentally friendly and quality products in the market. Customers prefer to pay extra for a product which does not pollute the environment. Starbucks has implemented this strategy successfully; the company provides high quality and environmentally friendly products to their customers at a high price than compared to their competitors. With these benefits, there are few disadvantages of CSR policies as well. The primary disadvantage of applying CSR policy is that companys focus shifts from profit making. As per Kim, Li and Li (2014), the main motive of organisations is to earn profits, but CSR policies require organisations to think about benefiting society. The corporations forget about their responsibility towards shareholders and instead focus on providing funds to society. The second significant drawback of implementing CSR policy is enhancement in the cost of production of companies. As per Reverte (2012), in order to apply environmental friendly energy sources, organisations are required to change their entire manufacturing procedures. This change requires a high level of expenditure which cannot be afforded by small or even medium corporations. Increase in cost of production also reduced the overall net profit of the corporation. The third disadvantage of CSR is that the constant disclosure and transparency can negatively affect the reputation of the organisation. As per Dhaliwal, Li, Tsang and Yang (2014), the corporation is required to provide shortcoming of their products and services which reduce the trust of customers in the corporation. For example, car manufacturing companies calling back their vehicles due to its flaws eventually reduce the reputation of the organisation. Customers and investors prefer to associate with popular and reputable corporations, so companies do not prefer strict CSR policies since it can affect their reputation adversely. Another disadvantage is that in case of customers, in the beginning, they prefer a company with strong CSR policies who is doing good for society, but lack of instant result made them think these policies are not working (Rivera, Bigne and Curras-Perez, 2016). Also, due to the low economy, most customers prefer to pay less for same products and services, ev en if they pollute the environment. Due to its popularity, most organisations implement a CSR policy, but in order to generate profits, most companies do not comply with their CSR policies. There are several examples of companies failing to maintain their CSR policies, such as Volkswagen, the company do not care about polluting the environment with their vehicles (Dans 2015). Many corporations evade tax from governments, such as Starbucks and HSBC bank, which reduced the net income of country. To avoid these drawbacks corporations are required to maintain an effective CSR culture in organisational environment and government should also form strict regulations for better compliance of CSR policies by companies. Conclusion From the above essay, it can be concluded that currently, corporate social responsibility policies are significantly popular among multinational corporations. Most companies use these policies to enhance their reputation in the market. These policies also assist in the preservation of environmental resources by using of natural energy in the manufacturing process. There are several shortcomings of implementing CSR policys, such as most organisations do not strictly company with such policies. Most shareholders and investors do not prefer CSR policies since it changes companys focus from profit making. Despite such shortcoming, the popularity of CSR policies is rising significantly. For successful and effective implementation it is necessary that government prepared several regulations. Some effort from companies is also necessary to establish a CSR environment in the corporation. The benefits of CSR policy considerably overcome its shortcomings. References Alter, L., 2017. How green is Apple? A look at their Environmental Responsibility Report. TreeHugger. Retrieved from https://www.treehugger.com/environmental-policy/how-green-apple-look-their-environmental-responsibility-report.html Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context. Dans, E., 2015. Volkswagen And The Failure Of Corporate Social Responsibility. Forbes. Retrieved from https://www.forbes.com/sites/enriquedans/2015/09/27/volkswagen-and-the-failure-of-corporate-social-responsibility/#460f7af4405c Dhaliwal, D., Li, O.Z., Tsang, A. and Yang, Y.G., 2014. Corporate social responsibility disclosure and the cost of equity capital: The roles of stakeholder orientation and financial transparency.Journal of Accounting and Public Policy,33(4), pp.328-355. Hopkins, M., 2012.Corporate social responsibility and international development: is business the solution?. Earthscan. Joshua., 2016. 66% of consumers willing to pay more for sustainable goods, Nielsen report reveals. Ashton Manufacturing. Retrieved from https://ashtonmanufacturing.com.au/66-of-consumers-willing-to-pay-more-for-sustainable-goods-nielsen-report-reveals/ Kim, Y., Li, H. and Li, S., 2014. Corporate social responsibility and stock price crash risk.Journal of Banking Finance,43, pp.1-13. Kim, Y., Park, M.S. and Wier, B., 2012. Is earnings quality associated with corporate social responsibility?.The Accounting Review,87(3), pp.761-796. Melo, T. and Garrido?Morgado, A., 2012. Corporate reputation: A combination of social responsibility and industry.Corporate social responsibility and environmental management,19(1), pp.11-31. Reverte, C., 2012. The impact of better corporate social responsibility disclosure on the cost of equity capital.Corporate Social Responsibility and Environmental Management,19(5), pp.253-272. Rivera, J.J., Bigne, E. and Curras-Perez, R., 2016. Effects of Corporate Social Responsibility perception on consumer satisfaction with the brand. Spanish Journal of Marketing. Retrieved from https://doi.org/10.1016/j.sjme.2016.06.002 Robinson, N., 2015. HSBC bank 'helped clients dodge millions in tax'. BBC. Retrieved from https://www.bbc.com/news/business-31248913 Wang, U., 2016. How Google is using big data to protect the environment. The Guardian. Retrieved from https://www.theguardian.com/sustainable-business/2016/oct/12/google-environmental-sustainability-data-kate-brandt