In this section of the report, I will be discussing the meaning of corporate citizenship. I will be explaining how companies can be considered good corporate citizens and taking into thought Corporate Accountability, Corporate Governance and the 3 Pillars of Sustainability, and why companies would need to change the audit model. What is Corporate Citizenship? “Corporate Citizenship” can be defined as the ways in which all companies interact with the interest of shareholders and other stakeholders of the organisation. It mentions in (Ganguly, 2017) that corporate citizenship is about how companies behave ethically in the business through a variety of different methods such as in monitoring the accounting information or being sustainable taking …show more content…
One of their main goals should be that they want to be good corporate citizens. In order for a company to be a good corporate citizen they should be doing a range of different activities within their organisation taking into consideration the 3 pillars of sustainability which are Profit which is part of the economic and financial aspect, People looks at the social part, and Planet which is to do with the environment. As mentioned in (Shah and Ramamoorthly, 2014), that from a company’s perspective of corporate citizenship, it is to make sure that the impact is positive and they try to reduce the negative effect on society and the environment, making sure that they still receive a good enough return from the investors. For a company within the accounting and finance sector, one of the main elements of being a good corporate citizen is to ensure that they comply with the reporting and disclosure requirements. This is very important because when they have to prepare their accounts and financial statements it is vital that they follow the strict guidelines that have been stated by the IFRS. If these guidelines are not followed, then the company will have to face several …show more content…
Examples of Stakeholder’s could be: managers, directors, employees etc. It is based upon a conceptual framework approach in which it provides moral and ethical values to a business organisation. When in practice, majority of organisations are mainly going to focus on corporate social responsibility. The reason for this is because CSR is seen to have a big impact on the firm as many people are recognising that there is a increasing number of businesses that are both socially and environmentally friendly. On the other hand, if the government doesn’t intervene with companies in terms of both regulation and legislation, this means that firms will only be concentrating on the accounting figures. If companies are primarily focusing on the accounting figures, this indicates that businesses are not taking in the social and environmental impact of the activities within the organisation. In (Liu, Fellows and Tuuli, 2011), it refers to corporate citizenship values in which it considers and identifies the different demands of the stakeholder groups to see where the overall value of the company comes from taking into thought the environment and
Windsor, D. (2001). The future of corporate social responsibility. International Journal of Organizational Analysis, 9 (3): 225-256.
Times have changed drastically for businesses since the Internet and social media have become part of our everyday lives. It’s now easier than ever for the individual to gather data and follow organizations to ensure they are performing legally, morally, and ethically. Stakeholders believe that organizations have a social obligation to operate their business in an ethically, socially, and environmentally responsible way. The term for this idea is Corporate Citizenship. Corporate Citizenship is “the extent to which businesses are socially responsible for meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim is for businesses to create higher standards of living and quality of life in the communities in which they operate, while still preserving profitability for stakeholders” (Investopedia.com, 2013). Stakeholders are expecting organizations to conduct business in a way that meets legal, ethical, economic, and philanthropic expectations that go beyond commercial relationships. Many organizations are including corporate responsibilities in their corporate mission statements and goals. They want stakeholders to see that they practice ethical behavior and are committed to their local communities in order to maintain a positive corporate image. According to CNN Money “Wal-Mart Stores Inc., had $469.2 billion in revenue last year and has reclaimed the top ranking in the Fortune 500 ranking of the largest U.S. companies by revenue”( Hathaway, 2013). Wal-Mart has over 10,800 stores and is a company that can have a tremendous impact upon the environment and their current employees and future employees. Largely due to its size and resultant influence, Wal-Mart is receiving constant pressure t...
Marrewijk (2003) demonstrates concept of social responsibility (CSR), also known as corporate citizenship, which is mainly about corporation’s initiatives to take responsibility for company’s activities that impact environment and social wellbeing in order to obtain sustainability. According to Deegan et al (2002), legitimacy theory is an approved theory that would be used in the practice of corporate social reporting because it based on the notion of social contract and on the assumption that governance mechanism would adapt the strategy showing that the corporation is trying to comply with society’s expectation.
Hence, the stakeholders which are described as those who are affected by the organisation performance ,actions and duties and those actions includes employees, clients, local community and investors as well. The theory of stakeholders also suggests that it is the responsibility of firm to make sure no rights of stakeholders are dishonoured and make decisions in the interest of stakeholders which is also the purpose of stakeholder theory to make more profit and balancing it while considering its stakeholders (Freeman 2008 pp. 162-165). In the other words organisation must also operates in a more socially accountable approach by carrying out corporate social responsibility as (CSR) activities.
Corporate Social Responsibility (CSR) is the way a corporation achieves a balance between its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. In general, when firms hold this wider encouraging role on the public by being engaged with stakeholders, a variety of profit can be produced for both company and the stakeholders. A key inclination is the combination of Corporate Social Responsibility (CSR) into the organization strategy, culture, mission and communications. By incorporating corporate citizenship into the company it is no longer an additional “nice thing to do” or something made to obey laws or regulations. Instead, corporate responsibility has become something business leaders and workforce want to engage in, frequently because executives who believe in the long-term see business profit. The four types of social responsibilities a...
The idea behind stakeholder theory is that it’s all about making the stakeholder which is the group that has a stake in the company , better off. In this model, corporate responsibility involves anyone who has direct ties to the company. For example, as an employee you are responsible to do things such as “...follow the instructions of management most of the time, to speak favorably about the company, and to be responsible citizens in the local communities in which the company operates.” In return for this form of loyalty and their labor, the company is expected to do things such as be there for them during hard times and other standard employee benefits such as wages and security. The whole idea behind corporate responsibility in this theory is that who you have a responsibility to becomes wider if you focus on the stakeholders. This could work if it wasn’t for the fact that even if you get something out of being invested, sometimes that isn’t enough. For example, if you work for a company and you catch your CEO doing some shady stuff. As an employee, you’re invested in whether or not this company continues to thrive under the current CEO. But your loyalty isn’t deserved if the company is engaging in morally questionable behavior. This idea of corporate responsibility fails when applied to real life scenarios in companies that might engage in misconduct or unethical practices.
There is a link between corporate social responsibility and the key principles of the stakeholders, which a company should follow to be responsible to its stakeholders. The first stakeholder is environment and the key principle used for it is not damage the environment for example, recycling, dealing correctly with their wastes and emissions. The second stakeholder is the employees. The key principle for the employees is companies providing safe and health working conditions for their staff. Moreover, the employees earn an appropriate salary for ...
The five stages of global corporate citizenship are elementary, engaged, innovative, integrated, and transforming. Before the housing market burst, Moody’s was in the elementary stage. Managers were unconcerned about the potential adverse impacts their inflated RMBS investment ratings could have on the global financial community. They were indifferent to the concept that millions and even trillions of dollars were invested based on the accuracy of the rating, and that market losses of that size could cause a global recession. The managers did not break any laws by padding the RMBS rating, and they did at some point attempt to warn the marketplace that the RMBS securities were in trouble, but Moody’s did not take the step of being honest
Covey & Brown (2001) “the role of business in society has progressed over the years, from being primarily concerned with profit for sharehold¬ers to a stakeholder and community approach with a focus on corporate social responsibility”
Business organizations regularly run into demands from various stakeholders groups when conducting day-to-day business. These demands are generated from employees, customers, suppliers, community groups, governments, and shareholders. Thus, according to Goodpaster, any person or group of people that can shape or can be shaped by attainment of the objectives by an organization is considered a stakeholder. Most business organizations recognize and understand their responsibilities to these groups and endeavor to honor and fulfill them. These responsibilities are often communicated to the public by a statement of principles or beliefs. For many business organizations, corporate social responsibility (CSR) has become an essential and integral part of their business. Thus, this paper discusses the two CSR views: the classical view and the stakeholder view. Furthermore, I believe that the stakeholder view has brought ethical concerns to the forefront of businesses, and an argument shall be made that businesses would improve both socially and economically if CSR, guided by God’s love, was integrated into their strategic planning.
While the concept of an individual having responsibility is commonly recognized, modern views have lead to the emerging issue of corporate responsibility. Business Directory.com defines corporate social responsibility as, “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.” But such a concept has been much disputed since at least the 1970’s.
It is important to understand the importance of corporate social responsibilities. If Corporate Social Responsibility is properly maintained and emphasized by companies, it can benefit the society, economy and corporate sustainability. It can also be cost efficient to companies. also the environment . But above all effect (CSR) varies companies to companies. Where some corporates seem to make all sorts of benefits from their coporate social responsibilities but few of them are also having loss by trying to maintain CSR without properly evaluating their resources. (Porter and Kramer 2006) has said The inferences where corporates need to evaluate their CSR actions to figure out if they add
Corporate Social Responsibility is an organisation’s obligation to serve the company’s own interest and the one’s of the society. Moreover, Corporate Social Responsibility has a definition of a concept where the companies integrate social and the environmental concerns into their own business operation and also on a basis of voluntary with their interactions they have with the stakeholders. Corporate Social Resp...
Both of these areas are the lifeblood of the company, and any benefit to them should not be overlooked. Before a company can become proficient at corporate social responsibility, they must first know its definition. Corporate social responsibility is defined as actions that can be taken by a company to ensure they are adhering to ethical and social responsibilities of the day. These corporate social actions are self-regulatory, as a company strives to adhere to guidelines while also going above and beyond being a Good Samaritan in the business world (ECA, 2015). This can place certain businesses at the forefront in customers mind because of the example they are setting in the marketplace. A company going above and beyond the call of duty to work towards a more philanthropic approach in the surrounding community is a perfect example for corporate social responsibility. Going deeper into the definition, corporate social responsibility acts like a “double bottom line” for a company, as they strive to achieve financial goals, but also achieve their social mission out in the community. Once a company is aware of what the concept of corporate social responsibility is, they can now implement it and start to reap the many benefits of its
A company has an economic obligation. It must earn a favorable return for its stockholders in the restrictions of the law. But, corporate social responsibility means that organizations have also ethical and societal responsibilities that go past their economic responsibilities. CSR needs organizations to develop their documentations of their responsibilities to include other stakeholders such as workers, customers, suppliers, local societies, state governments, international organizations, etc. Ethics could be seen as a fundamental component of individual and group activities at the heart of organizations’ errands.