Corporate Social Responsibility Of The Business World

Corporate Social Responsibility (CSR) is something that affects all companies and should be an active factor in the company’s decision making. It is something all corporations need to care about. CSR is when business’ or corporations take part in an initiative or campaign for a cause that will benefit society and/or in some way make the world a better place (Taylor, 2015). Initially, Corporate Social Responsibility started to take shape around the 1950’s, but some say that it dates all the way back to the 1800s, the idea of CSR was seen (Carroll, 2007). One may think that because it is dated so long ago, it doesn’t have an important impact today nevertheless, it is proven that Corporate Social Responsibility is a pathway for entities to self benefit as they are in the process of benefitting society.

In his paper titled The Social Responsibility of Business is to Increase Its Profits”, Milton Friedman addresses the key issue of weighing social responsibility against profit maximization for shareholders. This conflict is the basis for Friedman’s whole paper, as he explores the two sides of the situation. In order to set up his argument, Friedman lays down a framework by explicitly stating a certain premise. This is that businessman view “social responsibility” and profit as not being mutually exclusive. In other words, the majority of businessman believe that they can operate a socially responsible operation, while still optimizing profits in the long run. Friedman argues in favor of this viewpoint by making a claim and providing a solid line of reasoning to support his claim. Friedman’s main claim in this paper is that corporate executives must conduct business with the aim to satisfy the desires and wishes of shareholders. He says that often the principal desire of shareholders is to maximize profits for the company, while still conforming to the rules of society. These rules can be purely legal, but can also be ethical and moral rules that are imposed by society. Friedman argues that any social responsibilities that go beyond the scope of maximizing profits is “pure and unadulterated socialism” (239). To reinforce his main claim, Friedman uses a logical flow of reasons that is predicated upon the role of executives and shareholders.

With the recent corporate scandals involving such companies as Enron and Martha Stewart, the concept of corporate social responsibility (CSR) has once again made its way to the forefront of contemporary management ideologies. However, CSR itself is not a new concept. In fact, societies as far back as the Ancient Mesopotamians (circa 1700 BC) incorporated CSR in their businesses. "King Hammurabi introduced a code in which builders, innkeepers or farmers were put to death if their negligence caused the deaths of others, or major inconvenience to local citizens." With each new "Enron" managers of similar corporations are suddenly placed in the spotlight, causing plans to be put into action to create a more socially responsible company.

CORPORATE SOCIAL RESPONSIBILITY (CSR) is a term describing a company’s obligation to be accountable to all of its stakeholder in all its operation and activities. Socially responsible companies consider the full scope of their impact on communities and the environment when making decisions, balancing the needs of stakeholder with their need to make profit.

A combination of recent changed to the world scene and pressures from public opinion now requires corporations to take on a new role, social responsibility. Corporate social responsibility is a corporation’s initiative to monitor and ensure compliance with the law, ethical standards, and norms. It can also be defined as corporation’s actions that further social good and go beyond the interests of the firm in order to make the world a better place. Essentially a corporation should embrace the idea of corporate citizenship, the idea that businesses are socially responsible for meeting legal, as well as ethical and economic responsibilities placed on them by shareholders. Although this is an alluring concept, it is also a flawed one. It

Archie Carroll defines corporate social responsibility (CSR) as “the social responsibility of business encompassing the economic, legal, ethical, and discretionary expectations that society has of these organizations at a given point in time.” (Crane, 5) Interesting enough, there has been an abrupt growth of firm’s engagement in CSR within all industries. This is the result of growing requests from the civil society demanding firms, of all sizes, to legitimize their practices. (Crane, 4)

BusinessDictionary.com (n.d.), defines corporate social responsibility (CSR) as “a company’s sense of responsibility towards the community and environment, both ecological and social, in which it operates” (para. 1). When expressing citizenship, companies can do so through its waste and pollution reduction processes, by contributing to educational and social programs, and by earning adequate returns on the employed resources (BusinessDictionary.com, n.d.). Economic, political, and civil society are three spheres of human civilization that reveal fundamental principles of corporate social responsibility. The economic sphere, which deals with businesses and economy of a society, the political sphere, which deals with government and the laws and rules that mandate and enforces, and the civil society sphere, which builds civility and community (“Corporate Social Responsibility-Module Two Overview: Three Spheres of Human Civilization”, 2014). Cleco exhibits corporate social responsibility using the three spheres of human civilization through stewardship and conservation initiatives, community outreach, and regulatory requirements throughout its service territory, which includes 23 Louisiana parishes.

With the development of economy and society, large corporations not only have responsible for make profit to their shareholders, but also taking environmentally responsible and undertaking corresponding social responsibilities as well as other stakeholders. This point of view could be involve in the corporate social responsibility (King and Lawley, 2013). Additionally, the definition of stakeholders are individuals or groups which affected by an organization and have an interest in its activities (Freeman, 1984). Moreover, Starik (1994) stated that those who potentially have impact on an organization may also is a stakeholder. However, according to Lynch (2006) argued that when a corporation involve many stakeholders, they

A corporation does do business within a vacuum; rather exist as part of larger collective framework of society, stakeholders and a global business community. I believe that corporations which are profitable, and promote moral and ethical standards are the benchmark of success; additionally, corporations bear a great social responsibility to the society it exists within, an simply working within “the basic rules of society, both those embodied in law and those embodied in ethical custom” is not enough (Friedman, 1991). While Robert Solomon and Milton Friedman both champion the use of ethics and morality in business, they disagree on industry’s responsibility to society, and corporations role to include communal obligation while crafting policies and guiding principles for their business decisions.

This course encouraged us to explored and developed a higher thinking and reasoning behind business morals and

there were internal failures, more could have been done to ensure that the directors who were not acting ‘illegally’ acted with more consideration for their non-shareholders.

In the today’s business world, there are many strategies being used to run businesses. In the recent past, the topic of Corporate Social Responsibility (CSR) has grown rapidly.

There are a number of definitions of “idealism” and “realism”. Idealism is referred to behaviour or consideration based on an idea of things as they would be, or as we would like them to be, with an inclination to be unreal or imaginative. Realism on the other hand is referred to behaviour or consideration based on a formation of things as they actually are, in spite of how we want them to be, with an inclination to be practical and realistic. Corporate social responsibility has been defined in many ways; one way to define CSR is that CSR takes into consideration how companies manage their business processes to generate on the whole a positive impact on society. Stakeholders are people who are affected by a business.

The term social responsibility means different things to different people. Generally, corporate social responsibility is the obligation to take action that protects and improves the welfare of society as whole as well as organizational interests. According to the concept of corporate social responsibility, a manager must strive to achieve both organizational and societal goals.

Campbell (2007, p. 952) based on the review of CSR proposes that firms are less likely to perform in a socially responsible way when when they are facing weak financial performance and are operating in the environment where there is limited likelihood for short term profitability.