Corporate social responsibility
There exists a great relationship between the society, the state, and the business. Thus, we must establish the relationship among these stakeholders. Adam Smith who is considered as the pioneer of modern capitalist brings out the concept of corporate social responsibility. He says that, business aims at making profits but also serves the interest of the society this to say that, the ultimate responsibility of a business is to make profits. However, it should be done ethically and in obedience to the law (Dashwood, 2012). The business should aim at making profits but also protecting the health of the members of the society.
Social responsibility was developed to ensure that, the business serves society beyond its previous goals which were mainly making profits. Different academicians came together as a result of the outcry against the immoral business practices (Freeman, 2010). They emphasize that, it is important for business to take into account the welfare of the members of the society. That is why they introduced the concept of Business ethics and Corporate Social Responsibility for the protection of the consumers. As much as a business aims at responding to shareholders it should also aim at protecting and respecting the rights of stakeholders.
Notably, social responsibility entails economic, ethical and legal matters when carrying out a business. Businesses are supposed to know and understand the values and norms of the members of the society. This is to ensure that they ethically deal with the society. Businesses and its stakeholders are intertwined but not distinct entities (Coombs & Holladay, 2012).This means each one of them has a responsibility in order to produce a positive impact in the society. The society must understand that, they need businesses in order to get goods. On the other hand, the business requires the society to purchase their product in order to make profits. Additionally, the government is an important stakeholder in the business world. This is because it deals with the legal aspects of the business. This is by setting up rules and regulations and how the businesses should be coordinated.
Corporate social responsibility is a social issue but not a private issue. This is because the business deals with different stakeholders and should coordinate with each effectively. The main goal of a business is making profits, but also there are other responsibilities that have been attached to it. There have to protect the environment and the wellbeing of the employees, the civil society, and the community. This means that, business does not work in isolation of the community but has a great role to play in the society (Coombs & Holladay, 2012).
Each individual has a role to play in relation to corporate social responsibility. These are the shareholders in the business. First, the government has a great role to play. Its main function is legislation to deliver social and environmental objectives especially in the business sector. The government ensures that all the activities carried out by the businesses are accepted according to the law. In addition, it ensures that, businesses follow the laid down rules and regulations for instance, the government will ensure that, the businesses carried out does not pollute the environment.
The other stakeholders who cooperate with the business organizations include employees, suppliers, competitors’ investors and the communities. The organization is supposed to provide a suitable and healthy environment for its employees (Dashwood, 2012). This is to ensure that, they give theye’re best in the organization. Maintaining a clean and healthy environment ensure that corporate social responsibility is maintained. In addition, investors play a great role in corporate social responsibility. This means that the decisions that they make must be in relation to the ethical concerns. The ethical considerations will come in, in buying and selling stocks. Investors must invest in activities that are legally accepted.
Competitors are great stakeholders in the business world. In order to retain skilled employees in an organization, you have to improve their working conditions. This is to ensure that, they are able to cope up with the stiff competition in the market. This is a corporate social responsibility. Additionally, suppliers have a great role to play. That is why they have come up with a code of conducts to ensure that they carry out their activities responsibly. The code of conduct ensures that their reputation is not tarnished (Coombs & Holladay, 2012). As a result of social responsibility, there is improved financial performance. In addition, there is lower operating cost in the business. The supplier will not increase costs because of the set rules and regulations. There is also increased sales and customer loyalty.
Business plays a vital role in the Canadian economy. In the Canadian economy, many factors affect the business world. That is why it is important to give attention to each issue. Many factors have come up as a result of globalization (Freeman, 2010). In globalization, the issues of concern include environmental protection, human resource management, and health and safety. Different organizations in Canada have come up with bodies that outline the guidelines and principles on the concept of corporate social responsibility. Inventions of communications technologies such as the cellular phones and the internet have played a great role in the corporate social responsibility world.
Canadian economy has played a great role to ensure that corporate social responsibility is maintained. Research has shown that, investment in social responsibility has grown by 27 per cent. Because of this, there is growth in the market, in Canada. Corporate social responsibility attracts and builds effective supply chain relationships (Mullerat, 2010). There is also room for change in all the aspects in the organization. People are willing to change and venture in new areas. This is because people sit together and come into agreement on various issues. The changes range from environmental changes to social and economic changes.
Investors and shareholders in the organizations understand that, it is their role to ensure that they cooperate with the members in the organization and maintain the ethical standards. In all their activities investors ensure that, they channel their cash in indicators of effective corporate social responsibility. This means where there is reasonable corporate social responsibility in the world today, there is an attraction of more investors (Werther & Chandler, 2011). Thus companies should aim at creating a corporate social responsibility in their organization.
Recently, the Canadian Pension Investment Board came up with a policy on responsible investing. This policy aimed at dealing with issues such as governance, social and environmental factors. All this was aimed at ensuring that, the corporate social responsibility is maintained in different organizations especially on the part of investors. Additionally, the Canadian firms aim maintaining the culture and rights of the people in that given society. This is in collaboration to both urban and rural setting. That is why the government has come up with Canadian Forestry cultivation in the rural areas. This is to ensure that the forest is maintained in good condition. This entails issues on cutting down of the indigenous trees which is not acceptable according to the law in Canada (Coombs & Holladay, 2012). The trees are supposed to be maintained in the required condition.
There is a very close relationship between corporate social responsibility and the law. That is why the federal, provincial, and the municipal government come in. Their main purpose is to address the firms economic, environmental, and the economic impacts on the law for instance in Canada there are laws that have been set to ensure that the laws set on the corporate social responsibility are maintained. The laws range from the federal state to the municipal. The laws are on the issues of taxation, bribery, corporate governance, health and safety, human rights, and environmental protection (Werther & Chandler, 2011). The government helps different companies to ensure that, the laws are set in place and they are followed to the latter. The firm has a responsibility to ensure that all workers follow the stipulated laws and regulations especially on the issue of environmental safety.
In corporate social responsibility, there are a number of the federal laws that have been set to ensure that every organization follows the laid down rules and regulations. The payment of tax is also regulated by the body in the federal government. The business organizations are supposed to pay tax to the government through a number of ways for instance paying licenses for their businesses (Dashwood, 2012). Government organizations are supposed to produce an annually written report on the use of finances in the organization. This ensures that accountability is given an upper hand in the organization. According to the legal procedures the company should list down the activities which they carried out in a given financial year. This is to enable the government to easily account for the taxpayer’s money.
In conclusion, the main purpose of the corporate social responsibility is to ensure that, the ethical standards are maintained in an organization. If corporate social responsibility is maintained in the organization it is going to attract more investors in the organization. A business that maintains corporate social responsibility can retain and maintain their skilled employees and customers. A company or organization will also be to decrease liability in the organization. The key stakeholders in the organization include government, community, and the shareholders this means that an organization does not work as a separate entity.
Coombs, W. T., & Holladay, S. J. (2012). Managing corporate social responsibility: A communication approach. Chichester: Wiley-Blackwell.
Dashwood, H. S. (2012). The rise of global corporate social responsibility: Mining and the spread of global norms.
Freeman, R. E. (2010). Stakeholder theory. Cambridge University Press.
Mullerat, R. (2010). International corporate social responsibility: The role of corporations in the economic order of the 21st century. Austin: Wolters Kluwer Law & Business.
Werther, W. B., & Chandler, D. (2011). Strategic corporate social responsibility: Stakeholders in a global environment. Los Angeles: SAGE.