It is obvious that Corporate Social Responsibility (CSR) is incorporated in modern day business. For example, in the UK, Operating and Financial Review was introduced by Modern Company Law Review (2000) to extend socially benevolent behaviour. The impact of that is clear, it resulted in total number of assets involved in Socially Responsible Investment rising from £22.7 bn in 1997 to £224.5 bn in 2001(989%). The trend is visible in other places, e.g. in Australia, there was a 31% rise between 2001 and 2002, and more that 8% in the US (Crowther and Rayman – Bacchus, 2004, p. 162).
However, the views on CSR can be divided into three main groups. First group believes it to be a misguided attempt of diverging shareholders money. Second think of it as a little more than a smokescreen used by large multinationals to maintain their discredited and unsustainable model of business, while at the same time appearing to be responsible in the eyes of the public. Finally, the third group see SCR as an opportunity to help millions that make the population of the poorest people in the world to get out of poverty (Crane et al. 2014, p. 3). This essay will attempt to present those views.
Case for SCR
Although there is no universal definition of CSR, Crane et al. (2014, p. 3, 9) described it’s six core features; it is voluntary (above and beyond what is prescribed by law), manages externalities (e. g. pollution), has multiple stakeholder orientation (not only responsible to shareholders). It also contains social and economic alignment (does not conflict with profit), practices and values (what companies do, not why) and is beyond philanthropy (core business’ functions’ impact on society). These concepts of responsibility are describing...
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...s, while the ones who are driven by legitimization will also focus on a bigger range of stakeholders, from employees to consumers. Every decision a firm makes can influence their Corporate Financial Performance (CFP), some of those decisions involve honouring contracts with stakeholders. Then they claim that it can go in two directions. The Resource Based View (RBV) explains that CSR can result in making products that cannot be soon imitated by competitors by introducing practices that involve CSR, thus raising competitiveness on the market. On the other hand, the advocates of Transaction Cost Economics (TCS) claim that implementing CSR helps corporations avoid formalised compliance mechanisms in contracts, and therefore are good for businesses. These theories don’t put much emphasis on altruism. (http://www.sciencedirect.com/science/article/pii/S0278431911000703)
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