Certain dynamics is characteristic to stakeholder subjects and their groups. Schmeltz [ 91 ] analyzed the reactions of young people to the values of social responsibility. The study showed that the majority of respondents are focused on personal and community profits and much less concentrate on the global aspects, such as the preservation of the planet. Strautmanis [ 92 ] drew attention to the gender and job differences affecting valuable differences, and underlined the importance of ethics study for businessmen.
Tobey and Perera [ 93 ] evaluated the national context imposing corrections. Aguilera et al. Moral motives imply the need for a meaningful existence, management interest, high value, corporate responsibility, and altruism.
This can be regarded as a response to organizations that link corporate social responsibility with the activities of marketing in an excessive way, that is why, they remain disappointed by the idea itself, because they underestimate the created social capital. The commitment to stakeholders is one of the most important factors in the CSR context, however, integration of confidence determining mechanisms into corporate practice remains a challenge. The commitment to stakeholders can be defined as an unwritten social contract, based on moral relation of company shareholders and managers with the declared values and a commitment to them.
This is the first and most important act, in the perspective of which the moral obligation the relation with subjects operating in the social environment and the quality of their relationship is possible to examine. On the one hand, the concept of the word commitment includes formal regulations and agreements; on the other hand, the commitment is the most important factor and the function in the processes of social capital building at the same time.
That is, when by certain company actions, it is targeted to develop retaliatory reactions of the target audience stakeholders. Without rejecting the influence of these mechanisms, the commitment to CSR and in closely connected context of social capital development is also personal. In this case, it is significant to draw attention to hazards of organizational management approaches actualized by Drucker [ 95 ] arising from the formed discipline assumptions, what it is worth paying attention to and what to ignore.
According to the author, the history shows that despite the importance of discipline, assumptions are rarely analyzed, rarely examined, rarely doubted, and rarely clearly positioned.
It is the trait of thinking determined by human nature: to look for the simplification, the usual, stereotypical, and easily adaptable schemes, not always assessing the nature and the whole of the subject. The way how the social contract with stakeholders will be carried out on behalf of the company depends on the people who form the company and determine its operating policies with personal relationship values which they have and which they declare.
In this case, again, we should remember the psychological and social mechanisms underpinning the creation of social capital.
This is indicated by various research. It was found that the perceived social capital is positively associated with greater commitment among employees [ 96 ]. In addition, another study confirms a positive and a significant impact of the two dimensions of social capital: cognitive shared values and relational trust on both commitment and cooperation [ 97 ]. Watts and Holme [ 98 ] present a definition that has become classical as the permanent business commitment to behave ethically and contribute to economic development while improving the quality of labor force, quality of life for their families, and contribute to the community and the general public welfare.
Therefore, the perception of interests harmonization can be interpreted as a kind of mutual commitment exchange, the benefit of which is mutual satisfaction of expectations. CSR is revealed as a multidimensional phenomenon, forming relationships with various stakeholders. Wilson [ 99 ] believes that strong commitment can develop positive relationships with stakeholders, as well as reduce the price of relations with customers and other stakeholders.
The ongoing CSR practice had a positive relationship with such aspects as employee trust, commitment, and job satisfaction [ , , ]. In this context, the study of Bhattacharya et al. They drew the means-end chain framework to articulate and implicate the types of benefits stakeholders derive from CSR initiatives i. In addition, the authors say that the quality of the stakeholder-company relationship resulting from a CSR initiative depends on the type of benefits stakeholders obtain from it.
The commitment is often associated with stakeholder expectations in an environment in which businesses operate. Cruz et al. According to the authors, exporters that target countries with strong orientation toward sustainability also require a stronger commitment to developing a CSR-based differentiation strategy at the firm level, as the more demanding institutional environments suggest that trust-building activities must pass more stringent requirements. However, other authors argue that stakeholder expectations should not be interpreted in a differentiated evaluation of different countries and cultures.
According to Werther and Chandler [ ], legitimacy is an important value in all countries. This idea can be extended in terms of other values under the disposition of the CSR concept.
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Introduction Relevance of the research. Source Social responsibility definitions Dimensions Rhodes [ 37 ] Values, creation mode: at the expense of other motives and values. Value WBCSD [ 38 ] Corporate social responsibility is the commitment of business to behave ethically and contribute to economic development, improvement of labor, family, local community, and society quality of life.
Ethical behavior European Commission [ 39 ] A concept whereby companies voluntarily decide to contribute to society welfare and cleaner environment. Initiative McWilliams, Siegel [ 40 ] The result between supply and demand ratio. Supply—demand ratio Aaronson [ 41 ] Business decision-making is linked to ethical values, in compliance with legal requirements and is based on respect for people, communities, and the global environment.
Morality Wales forum of business leaders [ 41 ] Open and transparent business practice that is based on ethical values and respect for employees, communities, and the environment. Stakeholders of all kinds, from consumers to suppliers to team members, investors, and local community organizations, are increasingly demanding greater transparency and accountability from companies with whom they do business.
Businesses need business practices that prioritize effective ways to collect, organize, analyze, and manage their data for clear, accurate, and complete reporting of financial and business activities. In addition to accountability and transparency, those looking to invest capital are more likely than ever to invest in companies with high marks for corporate responsibility and sustainability with regard to both social and environmental concerns.
They rely on resources like the Global Reporting Initiative to monitor and evaluate companies for completeness and veracity in their sustainability reporting. But companies can struggle to get everyone onto the same page, especially when different business units have different priorities and goals that may align with corporate goals for the bottom line, but not necessarily its CSR initiatives.
Education initiatives, training, and a unified approach to internal business practices and controls can help secure employee engagement, as well as support from the C-Suite. CSR activities can generate both hard value for example, in the form of cost savings from going paperless with cloud-based data management and robotic process automation and soft value e. But showing how CSR contributes positively to developing products and services that meet regulatory compliance requirements, company goals for profitability and performance, and consumer expectations requires an investment in digital software solutions that bring disparate data sources together and provide measurable value via insights and improved financial reporting.
For example, companies who centralize their procurement with a cloud-based, centralized automation and data management solution like PLANERGY can collect, organize, and analyze data streams from across their software environment to connect spend to business practices to value in a number of ways. Now, as ever, the only certainty in business is uncertainty. Doing business is about much more than trading cash for goods and services. It assumes businesses recognize that for-profit entities do not exist in a vacuum and that their ability to operate and achieve ongoing success comes as much from societal resources e.
CSR emerges from the interaction and interdependence between for-profits and society. It is shaped by individual and societal standards of morality, ethics, and values that define contemporary views of human rights and social justice.
Thus, to what extent does a business have an obligation to re-pay the debt it owes society for its continued business success? On the one hand, it can be argued that business success depends on the society that provides the infrastructure, employees, consumers, and other elements that are central to success. On the other hand, if a business must fully reflect societal costs, it may not be able to compete—especially with firms in other societies that may be able to externalize their costs such as dumping unfiltered pollution into local waterways.
CSR is a rational argument that focuses on the benefits to performance of avoiding external constraints. Adopting the path of least resistance with regard to issues of concern makes common and business sense. Violations of ethical and discretionary standards are not just inappropriate; they present a rational argument for CSR.
Where compliance with moral expectations is based on highly subjective values, the rational argument rests on sanction avoidance. Ultimately, the Iron Law of Social Responsibility suggests that in a free society discretionary abuse of societal responsibilities leads, eventually, to mandated solutions. That is, in a democratic society, power is taken away from those who abuse it. CSR is an argument of economic self-interest for businesses. CSR adds value because it allows companies to reflect the needs and concerns of their various stakeholder groups.
By doing so, the firm is more likely to create greater value and, as a result, retain the loyalty of those stakeholders. Simply put, CSR is a way of matching corporate operations with stakeholder values and expectations that are constantly evolving. Summing the moral and rational arguments for CSR leads to an economic argument. To incorporate CSR into operations offers a potential point of differentiation and competitive market advantage upon which future success can be built, besides avoiding moral, legal, and other sanctions.
This perspective argues that social contribution can be profitable and can increase competitive advantage, supporting CSR. In summary, the economic argument contains all the factors explaining why CSR is of strategic importance for businesses today. Increasingly, society is becoming better informed and more socially aware of what firms are doing. Businesses, especially those that survive and prosper directly from consumers, risk their success and brand name when acting in ways that are not seen as socially appropriate.
What would be the impact on Coca-Cola, for example, if the employees in its Minute Maid orange juice division were seen as exploited by poor wages or working conditions? A variety of forces are heightening interest in CSR. Among these are increased affluence, ecological sustainability, globalization, the free flow of information, and brands.
Affluence means choices. Citizens of wealthy countries can make choices based on considerations that are more varied and complex than simple survival and economics. And, of course, firms that do obvious ecological damage are increasingly penalized by high profile protests from activist groups such as Greenpeace, which have become particularly adept at gaining media attention.
Globalization increasingly strips down geographical and cultural barriers, so that actions in one place even if legal and proper are subject to evaluation from the perspective of multiple cultures, laws, and societal expectations. Actions and practices in one locale can jump across the globe. Perhaps nowhere is the impact of CSR more obvious than when it comes to brands. Maltreatment of workers, defective products, and related problems can tarnish, even destroy, a brand and the investments made to create it.
News Article 1 PDF. News Article 2 PDF. Founded in as an organized opposition to same-sex marriage in state legislatures, NOM serves as a national resource for marriage-related initiatives at the state and local level. Society, businesses, and governments have realized that all stakeholders have to work for the common good. When they are successful at acting in a socially responsible way, corporations will and should claim credit. In acting according to the TBL model and promoting such acts, many corporations have reinvested their efforts and their profits in ways that can ultimately lead to the development of a sustainable economic system.
On the other hand, for some, CSR is nothing more than an opportunity for publicity as a firm tries to look good through various environmentally or socially friendly initiatives without making systemic changes that will have long-term positive effects.
Carrying out superficial CSR efforts that merely cover up systemic ethics problems in this inauthentic way especially as it applies to the environment , and acting simply for the sake of public relations is called greenwashing. The company grew quickly and is now a global brand owned by Unilever, an international consumer goods company co-headquartered in Rotterdam, The Netherlands, and London, United Kingdom.
Our Economic Mission asks us to manage our Company for sustainable financial growth. Our Social Mission compels us to use our Company in innovative ways to make the world a better place. CAFOs have been condemned by animal-rights activists as harmful to the well-being of the animals. Consumer activists also claim that CAFOs contribute significantly to pollution because they release heavy concentrations of animal waste into the ground, water sources, and air.
Coca-Cola provides another example of practices some would identify as greenwashing. The company states the following on its website:. We are committed to ongoing stakeholder engagement as a core component of our business and sustainability strategies, our annual reporting process, and our activities around the world.
As active members of the communities where we live and work, we want to strengthen the fabric of our communities so that we can prosper together. Let us take a close look at this statement. Depending on the process and location, it is estimated that it takes more than three liters of water to produce a liter of Coke. For example, in Chiapas, Mexico, the Coca-Cola bottling plant consumes more than one billion liters of water daily, but only about half the population has running water.
Thus it requires interest on the part of stakeholders to continue to drive real CSR practices and to differentiate true CSR efforts from greenwashing. CSR used in good faith has the potential to reshape the orientation of multinational corporations to their stakeholders. By positioning themselves as stakeholders in a broader global community, conscientious corporations can be exemplary organizations.
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