Corporate Social Responsibility

Running head: RESPONSIBILITY 1

Matthew Bell

MGMT560 – Ethics in the Global Marketplace/ Southwestern College Professional Studies

April 18, 2014

Dr. Roger Fuller RESPONSIBILITY 2 Corporate Social Responsibility

Corporate scandals are becoming a common recurrence in today’s business world.

Companies are a part of the community whether it is recognized or not and their decisions impact the environment and economy around them. The impact of these scandals has lessened the confidence that the general public has for the economy and the trust in businesses that are supposed to be supporting the economy. This lack of confidence and trust has caused organizations around the globe to adopt some types of responsibility and ethics to regulate how they do business for the good of the economy and environment around them. This new way of acting is called corporate social responsibility (CSR) and there are characteristics that define exemplary CSR and benefits that come from using CSR.

Characteristics

There are many motivations and characteristics that play a part in corporate social responsibility and how a company engages in corporate social responsibility. Managerial discretion is a characteristic that states that strong social performance can be primarily driven by managerial beliefs (Millar & Poole, 2011). It is important for managers to have positive and responsible beliefs because their decisions will impact the choices that their employees will make and avoiding poor decisions will be easier. The educational field of study is a characteristic that is could be looked over. Millar and Poole (2011) state that if one is to take an economics class, he or she is more likely to be less honest about ethical dilemmas and are less likely to cooperate or to expect cooperation from others.

Functional work experience also helps exemplify CSR. Employees who have had a breadth of functional experience in different parts of an organization, before becoming a CEO, will have a greater ability to see the business case for a range of CSR initiatives (Millar & Poole, RESPONSIBILITY 3 2011). Finally, one of the biggest motivators for behavior is CEO compensation. It is thought that the compensation that a CEO receives may contain motivational issues that may directly impact the decision-making concerning responsibility (Millar & Poole, 2011). One way to prevent ill-fated CSR is by compensating proactively. Overall, it is important to manage and ensure exemplary CSR because the benefits of good CSR outweigh having a negative CSR.

Benefits

CSR practices have been around for many years but it is just recent that they have started becoming more aware locally and globally. The benefits of exemplary CSR are proven through practicality and profitability (Leonard & McAdam, 2003). Another benefit of having exemplary

CSR is that a company remains in business. Remaining in business not only helps the success of a company but helps the surrounding community. A company with CSR creates jobs, wealth, and innovations that improve the standards of living and social conditions over time (Porter &

Kramer, 2006). The main goal of CSR is to emphasize sustainability and performance through valuing people and society and doing this will allow consumers to regain confidence in businesses (Leonard & McAdam, 2003). Main advantages of having exemplary CSR are reducing an limiting litigation, protecting brand images, improving the satisfaction of the customer, and increasing the ability to retain talented employees which reduces absenteeism and employee turnover (Leonard & McAdam, 2003).

Conclusion

It is important for a company to realize and support that their vision does not only support what is good for them but what is good for its employees, local community, and the society as a whole (Leonard & McAdam, 2003). Being a good corporate citizen and having CSR is more than following the rules. It is also giving back to the community and protecting the environment RESPONSIBILITY 4 in which a company operates. Overall, being responsible and caring will bring consumers to regain their trust in an organization and profits should increase. However, it is important to remember that CSR cannot happen if the characteristics are not looked out for. RESPONSIBILITY 5 References

Leonard, D., & McAdam, R. (2003). Corporate social responsibility. Quality progress, 36(10),

27-33.

Millar, C., & Poole, E. (Eds.). (2011). Ethical leadership: Global challenges and perspectives.

NewYork, NY: Palgrave MacMillan.

Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate

social responsibility. Harvard business review, 84(12), 78-92.