What is Corporate Social Responsibility?
Corporate Social Responsibility(CSR) is a self-regulating business model that ensures a company is socially accountable—to itself, its stakeholders, and the public. By practicing CSR, sometimes also called corporate citizenship, companies will maintain consciousness of the impacts they have on society, including: economic, social, and environmental. To engage in CSR means that, in the ordinary course of business, a company operates in ways which benefit society and the environment, instead of harming them.
Internal organizational policy or a corporate ethic strategy
Once, it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy, but that time has passed. Various national and international legislations have enshrined the ethos of CSR in legal codes . As such, while it has been considered a form of corporate self-regulation in the past, over the last decade or so it has moved considerably from being voluntary decisions for individual organizations to being mandatory schemes at regional, national, and international levels.
CSR is generally understood as a strategic initiative
At the individual, organizational level, CSR is generally understood as a strategic initiative that contributes to a brand's reputation. As such, social responsibility initiatives must align with, and be integrated into a business model to be successful. With some models, a firm's implementation of CSR, goes beyond compliance with regulatory requirements and engages in actions that further societal benefits, going beyond the interests of both the firm and what is required by law.
Engage in CSR for strategic or ethical purposes
Businesses may also engage with CSR for strategic and/or ethical purposes. From a strategic perspective, CSR can contribute to increasing a firms profits, particularly if brands voluntarily self-report both the positive and negative outcomes of their projects. In part, these benefits accrue by increasing positive public relations, maintaining high ethical standards which reduces business and legal risk by taking responsibility for corporate actions. CSR strategies encourage the company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others. From an ethical perspective, some businesses will adopt CSR policies and practices because of their senior managements ethical beliefs. .
Increase long-term profits by operating with a CSR perspective
Some argue that corporations increase long-term profits by operating through a CSR perspective, while critics claim that CSR distracts from businesses' economic role. Critics question the "lofty" and sometimes "unrealistic expectations" that comes with a CSR strategy, or that CSR is merely window-dressing: pre-empting the role of governments as a watchdog of powerful multinational corporations. Interested in this critical narrative, political and sociological institutionalist started to look at CSR in the context of theories of globalization, neoliberalism, and capitalism. Some institutionalists viewed CSR as a way of legitimising capitalism, pointing out that what began as a social movement against uninhibited corporate power, was transformed by corporations into a "business model" and a ”risk management" device.
The concept and ambit of CSR
The concept and ambit of CSR has increased exponentially in recent years, particularly during the outbreak of the coronavirus (COVID-19) which, was declared as a pandemic by the World Health Organization (WHO). The number of people affected by the virus and its resulting impact on CSR, has transformed the outlook of businesses towards society all over the world.
A guide to what the company represents for its consumers
CSR is meant to aid an organization's mission and serve as a guide to what the company represents for its consumers. Business ethics is the part of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles, but with no formal legislation.