Corporate social responsibility refers to all the activities an organization engages in, in order to show its commitment to ethical business practices, as well as its contribution to the development of the community around it. This also includes the role institutions play to improve the quality of life of its employees, clients, stockholders and other stakeholders. CSR activities enable companies to achieve some of the obligations that stakeholders expect from them. But, on the other hand, in some quarters CSR is seen as a means that organizations use to make more profits.
CSR is the vehicle organizations use to improve their image, reputation and enhance brand. These days it is very easy to find people accepting organizations that support a certain cause. Companies that support economic, social and environmental activities of the communities around them are better positioned to win clients. Although CSR started in large organizations, nowadays, even small and medium sized enterprises are actively engaged in it. As businesses engage in philanthropic activities their responsibility to its stakeholders is not compromised. What happens is that stockholders wealth maximization ceases to be the only drive of businesses. The responsibility businesses have toward other stakeholders comes in for the survival of companies (Lindgreen & Swaen, 2010).
Although CSR has been beneficial to organizations, there are people who argue that these activities reduce the stockholders returns, lack legal framework to regulate how they should be implemented and shortage of skilled labor to handle CSR programs. It is good to note that organizations engage in CSR activities they are capable of funding and handle the risk.
A business can have CSR activities to cover some of its negative outcomes. This is a wrong motive but once in a while organizations use CSR as a way to compensate the society. Institutions also use CSR to gain competitive advantage. A company with a strong CSR is in a good position to win the society. Microsoft Corporation is a good example of a company that uses CSR to gain positive brand recognition, attract talent as well as maintain its staffs, and wins clients loyalty. Its CSR responds to issues that affect everyone on the planet and the planet itself. It is through continuous engagement in what improves the society and the environment that has made Microsoft Corp. to earn trust.
Corporate Social Irresponsibility
CSI refers to the failure of an organization in meeting the expectations the society has for it. As businesses carry out their daily activities they find themselves going against what the society and stakeholders consider as unethical. This in most cases happens when profit maximization is the key that drives the business. The businesses forget about CSR and go ahead to do what is not good and right.
The major cases of CSI revolve around environmental degradation and pollution, corruption, bribery, providing wrong product information, discrimination and unfair treatment in the workplace and so on. In all these situations an organization finds itself on the wrong side. This can damage the organization involved and affect its survival. Due to the irresponsibility of organizations, every year billions of business proceeds are spent in legal and regulatory issues and cases (Robertson, Lamin, & Livanis, 2010). The clients also can shun buying products of irresponsible businesses and as result companies can collapse.
A good case of CSI is the one that hit the Siemens in Argentina. Siemens is a German based electronics giant. When the Argentine government wanted to issue its citizen with electronic identity cards in 1998, Siemens bribed government officials in order to be awarded the tender. But, a change of political leadership made their tender to be cancelled due to inflated costs. To redeem the tender they went ahead to bribe other government officials but they did not succeed (Robertson, Lamin, & Livanis, 2010).
My Stand on CSR vs CSI
CSR and CSI go hand in hand in businesses. An organization has the power to choose either of them. If what is good and right to the stakeholders and the society is incorporated in all the business activities for a good reason then we can term it as CSR. But, if a company decides to against what is expected of it then that becomes CSI. It is the senior management who set the precedents they want their institutions to follow. If the senior managers and CEO are ethical, then their employees will follow the suit and cases of CSI will not hit their organization.
To me CSR should not be used by organization as a way of compensation of the evils done. Institutions should take it as a way of giving back to the community, by doing so companies will gain competitive advantage. But if it is used for other reasons in this era when consumers have all the information they need concerning an organization at the click of a button, it will not increase the bottom line of an organization (Popa & Salanta, 2014). Consumers and stakeholders are pride of organization that practices ethical behavior and not the ones that uses CSR to cover evils done.
Organizations Responsibility to Stakeholders
The essence of CSR is so show its commitment in meeting the expectations that the stakeholders have. If an organization cares for its stakeholders it should not ignore any of them in order to report an increase in profits. Organizations should not be driven by making profits at the expense of its stakeholder’s wellness. For example, an organization should not engage child labor or pay workers peanuts for the sake of cutting overheads in order to generate more income.
CSR is the vehicle organizations use to improve their image, reputation and enhance brand. These days it is very easy to find people accepting organizations that support a certain cause. Companies that support economic, social and environmental activities of the communities around them are better positioned to win clients. Although CSR started in large organizations, nowadays, even small and medium sized enterprises are actively engaged in it. As businesses engage in philanthropic activities their responsibility to its stakeholders is not compromised. What happens is that stockholders wealth maximization ceases to be the only drive of businesses. The responsibility businesses have toward other stakeholders comes in for the survival of companies (Lindgreen & Swaen, 2010).
Although CSR has been beneficial to organizations, there are people who argue that these activities reduce the stockholders returns, lack legal framework to regulate how they should be implemented and shortage of skilled labor to handle CSR programs. It is good to note that organizations engage in CSR activities they are capable of funding and handle the risk.
A business can have CSR activities to cover some of its negative outcomes. This is a wrong motive but once in a while organizations use CSR as a way to compensate the society. Institutions also use CSR to gain competitive advantage. A company with a strong CSR is in a good position to win the society. Microsoft Corporation is a good example of a company that uses CSR to gain positive brand recognition, attract talent as well as maintain its staffs, and wins clients loyalty. Its CSR responds to issues that affect everyone on the planet and the planet itself. It is through continuous engagement in what improves the society and the environment that has made Microsoft Corp. to earn trust.
Corporate Social Irresponsibility
CSI refers to the failure of an organization in meeting the expectations the society has for it. As businesses carry out their daily activities they find themselves going against what the society and stakeholders consider as unethical. This in most cases happens when profit maximization is the key that drives the business. The businesses forget about CSR and go ahead to do what is not good and right.
The major cases of CSI revolve around environmental degradation and pollution, corruption, bribery, providing wrong product information, discrimination and unfair treatment in the workplace and so on. In all these situations an organization finds itself on the wrong side. This can damage the organization involved and affect its survival. Due to the irresponsibility of organizations, every year billions of business proceeds are spent in legal and regulatory issues and cases (Robertson, Lamin, & Livanis, 2010). The clients also can shun buying products of irresponsible businesses and as result companies can collapse.
A good case of CSI is the one that hit the Siemens in Argentina. Siemens is a German based electronics giant. When the Argentine government wanted to issue its citizen with electronic identity cards in 1998, Siemens bribed government officials in order to be awarded the tender. But, a change of political leadership made their tender to be cancelled due to inflated costs. To redeem the tender they went ahead to bribe other government officials but they did not succeed (Robertson, Lamin, & Livanis, 2010).
My Stand on CSR vs CSI
CSR and CSI go hand in hand in businesses. An organization has the power to choose either of them. If what is good and right to the stakeholders and the society is incorporated in all the business activities for a good reason then we can term it as CSR. But, if a company decides to against what is expected of it then that becomes CSI. It is the senior management who set the precedents they want their institutions to follow. If the senior managers and CEO are ethical, then their employees will follow the suit and cases of CSI will not hit their organization.
To me CSR should not be used by organization as a way of compensation of the evils done. Institutions should take it as a way of giving back to the community, by doing so companies will gain competitive advantage. But if it is used for other reasons in this era when consumers have all the information they need concerning an organization at the click of a button, it will not increase the bottom line of an organization (Popa & Salanta, 2014). Consumers and stakeholders are pride of organization that practices ethical behavior and not the ones that uses CSR to cover evils done.
Organizations Responsibility to Stakeholders
The essence of CSR is so show its commitment in meeting the expectations that the stakeholders have. If an organization cares for its stakeholders it should not ignore any of them in order to report an increase in profits. Organizations should not be driven by making profits at the expense of its stakeholder’s wellness. For example, an organization should not engage child labor or pay workers peanuts for the sake of cutting overheads in order to generate more income.
