Commerce 7016Ol Corporate Social Responsibility Assessment Answers

With the start of the Hayne Royal Commission into banks and financial services throwing up horror stories of banks behaving badly, Australia's former prime minister Tony Abbot has had a lot to say:
Tony Abbott says the big banks should have focused on treating their customers ethically rather than spending time “virtue signalling” on “politically correct subjects”.
The former prime minister attacked the financial services industry for the revelations unearthed in the Hayne royal commission, declaring the boards and executives should have kept the focus on their core businesses rather than making political statements.
The big four banks publicly supported same-sex marriage in last year’s plebiscite and have all ruled out providing funding for the Adani coal mine.
“I’m very disappointed in the banks and you wonder how much better the banks would have been if they had been focused on doing their core business honestly and ethically rather than running around the place virtue signalling on any number of politically correct subjects,” Mr Abbott told 2GB radio (Brown, 2018).
Mr Abbott clearly is not a believer in corporate social responsibility (CSR), instead dismissing it as "virtue signalling". Whether he is right or not, the benefits of CSR remain in dispute. Advocates of a narrow view of CSR are not against social responsibility, they just believe that by being good, profitable businesses (without ripping off customers and other stakeholders), companies are being socially responsible by sharing capital across the economy. In contrast, advocates of the broad view of CSR are not against profit, they just believe that there is more to business than "the bottom line". Having said that, there may be times when, for either side of the argument, focus is lost and terrible, unethical things are done. Perhaps Mr Abbott is right?
The purpose of this assignment is not to decide who is right and who is wrong in this argument. Instead you will take steps towards being an ethical decision-maker by being informed of the key aspects of each side of the CSR debate.
To complete this assignment, you are to research the academic literature on both the narrow and broad views of CSR and write a report that:
1.Reviews the literature on these views, and
2.Provides a comprehensive answer to Mr Abbott's position that 'the banks would have been if they had been focused on doing their core business honestly and ethically rather than running around the place virtue signalling on any number of politically correct subjects'. You must answer this statement by either supporting it (and explaining why) or rejecting it (and explaining why).

Understanding the importance of CSR from a customer’s perspective or a business perspective calls for a clear definition of the terms and a well-illustrated example that will help drive ones understanding in relation to the point of concern. CSR is the abbreviation for the terms Corporate social responsibilities. Other terms also include corporate sustainability, sustainable business, corporate conscience, responsible business and finally a corporate citizenship. CSR fall under the international private business self-regulations. The perfect definition of this can be: the social regulating business models that help a company b socially accountable to both the shareholders and the public (Babiak & Trendafilova, 2011). A good example can be the extra activities a business or a corporate venture in so as to specifically not make profits but affect the public or the community as well as the environment around it. For instance, a company may decide to operate in a clean environment and the management of the company would come up with a program that would be fully funded by the company, where the company approaches the community around it and engage them to a cleaning environment program. The company invests its resources and ensures the environment around it and the community around it are clean. Such activities in most cases are not profit motivated ventures of the company but they fall under the CSR of the company. There are multiple other examples such as the education scholarships (Davidson, 2016). This is one of the most practised CSR programs by many companies or corporates. The company provides scholarships to the public where the learners are fully or partially sponsored by the company resources. CSR helps the corporation as well as the community in some many ways but on the other side utilizes the corporate profits. For other cases this has had a negative take by the shareholders and other key members of the corporate who fail to adapt to the regulations of CSR and clam that a business should abide to the governing laws of the business and generating of revenue but not the indulgent in social responsibilities of the public (Visse & Tolhurst, 2017).

Different opinions are experienced where some tend to concur with the fact that this helps while others decline, the argument being that the only responsibility a corporate has is to obey all laws as seen earlier and to maximise the corporate profits and anything in contrary of that affects the maximization of profits (Jackson & Rathert, 2016).

For this report a clear analysis of the remarks by Tony Abbot in relation to corporates and their involvement with the political subjects among other public matters that are not directly associated with the corporates field of operations which are both;

“I’m very disappointed in the banks and you wonder how much better the banks would have been if they had been focused on doing their core business honestly and ethically rather than running around the place virtue signalling on any number of politically correct subjects,” Mr Abbott told 2GB radio

 “big banks should have focused on treating their customers ethically rather than spending time “virtue signalling” on “politically correct subjects”.

For the analysis a deeper understanding of the remarks will be analysed which will shed light on the relevance and the importance of CSR as the point of concern. Then the report will go on and give a well analysis of the relevance of CSR in the corporate industry by focusing on both sides the public and the corporate sector. As the report progresses an over view of the drawbacks o CSR will be covered and help understand the boundaries CSR as regulations should work within, later in the paper we will get to marry the analysis of Tony Abbot’s remarks and the understanding attained by the analysis of the relevance of CSR to both the corporates and the public. At this juncture one will be in a position of either support the remarks by Tony Abbot or disapproving the remarks.

Analysis of tony Abbots remarks.

After reading the remarks by Tony Abbot in relation to the corporates involvement to public matters and political subjects, it is evident that the remarks are filled with some level of anger and frustration. He goes ahead and claims that the banks need to stick to their line of operations and worry more about the services and the ethical treatment of customers which is currently missing. This shows a neglect of responsibilities by the banks a clear breach of the corporates requirement. It is the responsibility of the of the banks to ensure that the services offered to the customers are satisfactory as well as the business should be carried out ethically. These points required more emphasis since clearly as per Tony or other interested parties before adapting a CSR the company structure and response to the law and its responsibility to the corporation should be met. On the other hand, legally there is no restriction that prevents the corporations from getting entangled with the public responsibilities. The political matters fall under the publics domain which implies that the banks had all the rights to nose in the public matters. According to the definition and adaptation of CSR covered in the introduction, the corporate can take up social responsibilities and effectively impact the life of the public. This would significantly affect the company’s position in the market. This leads us to the next important aspect of the report which involves understanding the importance of CSR

Importance of Corporate social responsibilities.

As identified in the introduction, CSR is a broad term that is used to describe the company’s efforts to improve society in different ways, these efforts can range from donation of money to bob profits to implement environmentally friendly policies and other activities directed to developing and growing the community. This bring about multiple advantages of CSR (Brammer, Jackson, & Matten, 2012). The advantages can be understood as the importance of CSR. These can be categorized into both the society and the corporations.

Importance of CSR to the community

In respect to society, CSR programs have helps it in the creation of a better ambience between the people and the corporation. It impacts multiple thing in connection to the responsibilities the corporate takes up (Wang et al., 2016). For instance, donation of money to the cancer project. Such a project under CSR by the company impacts the lives of so many people in the society, the move helps in the fight against cancer and helps the community member suffering from the condition receive treatment. This move has a great impact on the health status of the society. This improves the living standard of the people within the community. CSR regulations that sees a company or a corporate investing in promoting education in the society, this is done through different moves such as building schools or providing educational scholarships to the community (Rasche et al., 2017). This advances the level of education within the community making it appreciate the corporation more. Other corporates advance the security of the community by provision of security lights among other security measures within the communities around this. This impacts the community’s security levels of the community residents and all in regards to the CSR policies and regulations. Other CSR regulations are for the natural environmental protection which involves the plantation of trees for instance around the community (Kiessling, Isaksson & Yasar, 2016). Such cases help in the preservation of the forests and the natural rivers around the communities. Also, such moves by the CSR shows the value for the communities’ environment hence significantly impacting the residents within the community around the community. CSR also provides the customer support and care regulations such as the production of quality produces for the community and providing theses products r services to the community at a subsided price (Tai & Chuang, 2014).

CSR impacts the lives of the people and its customers a lot which paves the way for a health relationship between the community and the corporation. Companies invest in educating the public in relation to technology for instance by offering classes. This advances the technology know how of the community. Some skill sets attained in such programs open ways to the community members and gives them chances to turn their life around which is very important. The minute the corporation is identified in line with such work, the CSR body integrated and applied by the corporation really helps the growth of the community as well as the corporations’ image.

The image below is a diagrammatic representation of the advantages associated with the CSR programs for the corporations.

In reference to our case, Tony abbot calling for the corporations to get off the political issues within the country since this fall off there are of operations means the curtailing of all the mentions important aspects of CSR to the community, this indirectly cripples the community in relation to the multiple projects currently under CSR programs of different corporations.

Importance to the corporation

On the other hand it is important to address the importance of CSR to the corporation. One of the most important advantages brought about by the adaptation of the CSR to the corporation is the increase in the revenue income for the company, the company by serving the community increases the number of loyalty customers as well as increases the number of customers that are willing to buy products and services from the company. Within the community this happens via the change in the community’s perspective towards the company or corporation, a research by (Herrera, 2015) which interviewed a number of customers in relation to why they ick different companies over the other showed that most of the customers picked a company that showed a since of care and love for the people. This was evident from the different programs the companies were engaging with the people such as the covered discussion above. Customers feel more appreciated and valued buy the company hence this in return leads to customer loyalty. In relation to the incomes generated by the company, the business manages to increase its profit margins as the level of losing any customers reduces (Jackson & Rathert, 2015).

The company also manages to establish a brand in the industry. CSR involves the creation of an amicable relationship between the corporation and the customers who are the community served by the company. CSR gives a company an image as to what they do and how effectively they do this. Indirectly, the customers start associating the company with the different CSR projects the company handles hence creating an image for the company. A well-established image impacts the company’s market share as well as number of loyalty customers the company manages to have. Company image helps the company increase its profit margins as well.

In relation the productivity of the company, CSR programs such as employee training increases the productivity of the company employees. The company may conduct an advanced technology integration program for the employees, such a program significantly impacts the company’s productivity, this enlightens its employees on the needed information and how to apply it in the production cycle of the company (Buhmann, 2006). The awarding mechanism after such programs among other program motivates the employee’s loyalty to the corporation. It manages t retain its employees for long since they are comfortable at their place of work hence no need to transfer from the company. This has been seen in some companies and with this the company manages to have a skilled workforce team that manages t elevate the quality of services and products the company has to offer the customers.

With such performance records as well as the well-integrated CSR model, the company manages to attract investors. According to (Bondy, Moon, & Matten, 2012) investors are willing to invest in such a business since most of the appreciate the work the company does to the community. The investors provide operational capital for the company and help grow the business further. Different business opportunities also emerge in the prosses of receiving more investment. With the availability of funds to run the company, the production rate for the company also is significantly amplified hence taking the business at a high level of competitiveness with any competitor company (Jamali, El Dirani, & Harwood,2015). Also, this helps in the improvement of the relations with the investors. Companies with best CSR in most case manage to satisfy the investors since they see the funds generated by the company are put into good use.

The diagram below is a diagrammatic representation of the of the benefits of a CSR model which has been effectively integrated in the company.

Disadvantages of Corporate Social Responsibilities

There are a number of disadvantages which are associated with the implementation of a CSR within a corporation. For instance, with our case Tony Abbot representing the government body may feel threated that the corporation is overstepping its boundaries in relation too the matters they are supposed to handle, in case of such a case this brings about a conflict of interest between the corporation and government or the public (Öberseder, Schlegelmilch, & Gruber, 2017). These cases have been seen severally and have been the leading issues in relation to the limits that CSR is not expected to go beyond. The other challenge is the use of corporation funds, stakeholders may feel that the company is stepping out of line in relation to its requirements which are the generation of profit but not the use of these profits (Bachmann & Ingenhoff, 2016). This has also been a challenging disadvantage of the CSR model; different bodies have been fighting over the used funds in the CSR projects such as the construction of roads or other finance depleting ventures.

Conclusion

CSR is one of the most important things among corporations that should not be overlooked. In regards to Tony Abbots remarks there was a misunderstanding in relation to the good associated with the continued implementation of CSR by the banks. The banks have done nothing wrong to chip in an contribute to the public affairs and help out where possible. But at the back f our minds these corporations should ensure they first meet their responsibilities such as ethical treatment of the customers. In relation to the report one would recommend a few things in relation to CSSR, the public and corporations need to embrace the impacts associated with the integration of a CSR model to the company and its associative advantages as well. This will help create an understanding of the benefits of CSR and avoid any other cases such as that of Tony Abbot from reoccurring. In case of any limitations that CSR should operate on then these should also be identified an opinion that may vary from one person to the other.

References

Babiak, K., & Trendafilova, S. (2011). CSR and environmental responsibility: motives and pressures to adopt green management practices. Corporate social responsibility and environmental management, 18(1), 11-24.

Bachmann, P., & Ingenhoff, D. (2016). Legitimacy through CSR disclosures? The advantage outweighs the disadvantages. Public Relations Review, 42(3), 386-394.

Bondy, K., Moon, J., & Matten, D. (2012). An institution of corporate social responsibility (CSR) in multi-national corporations (MNCs): Form and implications. Journal of business ethics, 111(2), 281-299.

Brammer, S., Jackson, G., & Matten, D. (2012). Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-economic review, 10(1), 3-28.

Buhmann, K. (2006). Corporate social responsibility: what role for law? Some aspects of law and CSR. Corporate Governance: The international journal of business in society, 6(2), 188-202.

Davidson, D. K. (2016). The importance of context in understanding CSR. The Research Handbook on Corporate Social Responsibility in Context, Edward Elgar Publishing Limited, Cheltenham, 32-45.

Herrera, M. E. B. (2015). Creating competitive advantage by institutionalizing corporate social innovation. Journal of Business Research, 68(7), 1468-1474.

Jackson, G., & Rathert, N. (2016). Private Governance as Regulatory Substitute or Complement? A Comparative Institutional Approach to CSR Adoption by Multinational Corporations?. In Multinational corporations and organization theory: Post millennium perspectives (pp. 445-478). Emerald Publishing Limited.

Jackson, G., & Rathert, N. (2015). Multinational Corporations and CSR: Institutional Perspectives on Private Governance. Research in the Sociology of Organizations.

Jamali, D. R., El Dirani, A. M., & Harwood, I. A. (2015). Exploring human resource management roles in corporate social responsibility: the CSR?HRM co?creation model. Business Ethics: A European Review, 24(2), 125-143.

Kiessling, T., Isaksson, L., & Yasar, B. (2016). Market orientation and CSR: Performance implications. Journal of Business Ethics, 137(2), 269-284.

Matten, D., & Moon, J. (2008). “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of management Review, 33(2), 404-424.

Öberseder, M., Schlegelmilch, B. B., & Gruber, V. (2017). “Why Don’t you care about CSR?–A Qualitative Study Exploring the Limited Role of CSR in Consumption Decisions. In The Customer is NOT Always Right? Marketing Orientationsin a Dynamic Business World (pp. 301-301). Springer, Cham.

Rasche, A. N. D. R. E. A. S., Morsing, M. E. T. T. E., Moon, J. E. R. E. M. Y., & Moon, J. (2017). The changing role of business in global society: CSR and beyond. Corporate social responsibility: Strategy, communication and governance, 1-28.

Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.

Visser, W., & Tolhurst, N. (2017). The world guide to CSR: A country-by-country analysis of corporate sustainability and responsibility. Routledge.

Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An overview and new research directions: Thematic issue on corporate social responsibility.