Need For Corporate Social Responsibility
Corporate social responsibility focusses on the idea that a business has social obligation above and beyond making a profit. It requires a management to be accountable to the full range of stakeholders. Corporate social responsibility is the continuing commitment by the business to behave ethically and contribute to the economic development of the country while improving the quality of life of the workforce and their families and local community and society at large. CSR is achieving commercial success in the ways that honour ethical values and respect people, communities and the natural environment. CSR is a combination of policies, education and practices which extent throughout a corporation’s operations and into the communities in which they operate. CSR is the commitment of businesses to behave ethically and to contribute to the sustainable economic development by working with all stakeholders to improve their lives in the ways that are good for business and the society at large.
It is a way of integrating the economic, social and environmental imperatives of business activities.
Why There Is A Need For Corporate Social Responsibility?
1. Better Public Image:
Each firm must enhance its public image to secure more customers, better employees and higher profit. Acceptance of social responsibility goals lead to improve public image.
2. Conversion of Resistances Into Resources:
If the innovative ability of business is turned to social problems, many resistances can be transformed into resources and the functional capacity of resources can be increased many times.
3. Long Term Business Interest:
A better society would produce a better environment in which the business may gain long term maximization of profit. A firm which is sensitive to community needs would in its own self interest like to have a better community to conduct its business. To achieve this it would implement social programmes for social welfare.
4. Avoiding Government Intervention:
Regulation and control are costly to business both in terms of money and energy and restrict its flexibility of decision making. Failure of businessmen to assume social responsibilities invites government to intervene and regulate or control their activities. The prudent course for business is to understand the limit of its power and how to use that power carefully and responsibly thereby avoiding government intervention.
Importance of Social Corporate Responsibility
· It aims at consumer protection.
· It aims at protection of local and global environment .
· It ensures respect for human rights.
· It results in avoiding bribery and corruption.
· It promotes adherence to labour standards by companies and their business partners.
Benefits of Corporate Social Responsibility
· Productivity and Quality: Improved working conditions, reduced environmental impacts or increased employee involvement in decision making which leads to – increased productivity and defective rate in a company.
• Improved Financial Performance: Socially responsible business are linked to positive financial performances. Improved financial results are attributed to stable socio political legal environment, enhanced competitive advantage through better corporate reputation and brand image, improved employee recruitment, retention and motivation and a more secure environment to operate in.
• Brand Image And Reputation:
A company considered socially responsible can benefit both from its enhanced reputation with the public as well as its reputation within the business community, increasing the company’s ability to attract trading partners.
• Access To Capital: The growth of socially responsible investing concept means companies with strong CSR performance have increased access to capital that might not otherwise have been available.