Corporate Social Responsibility

Corporate social responsibility is based on sustainability, whereby businesses comply with the law and ethical codes related to commerce while ensuring they do not endanger or exploit the public. Corporate responsibility includes use of renewable energy sources, proper disposal of wastes, mobilizing people on proper environmental habits and creating awareness on the rights of consumers and employees. In the contemporary society, ethical consumerism is very popular. For this reason there is a close correlation between the clientele base and the social responsibility.

Organizational responsibility to the community is a mandatory action meant to ensure that commercial activities do not imperil the lives of the people and aids in creating a better society. Most of the times it is wrongly associated with donations and give-a-ways by the organization but this is not even the part of the foundation of social responsibility. Philanthropy and responsibility are two completely different aspects of the business. Social responsibility is based on integrity and should stem from the internal operations of a firm and then shine outwards. When the products of a firm are considered to be harmful to clients, then the organization has no ethical consideration towards its own stakeholders and the community at large. Regardless of how much it is involved in other activities, it has greatly failed in being socially responsible. When an organization ensures safety for its employees and those around it, it is not doing it to the community out there; it is doing it for its own sake and benefit.

On the other hand, according to McWilliams, 2000, social responsibility more often will act as a distraction to the real reason of an organization: commercial activities. In his paper, McWilliams states that over 100 academic journals have revealed that there is no correlation between social responsibility and financial performance of a firm. In this case, firms may spend their resources on social responsibilities but it will not improve their finances. An organization has a responsibility to its stakeholders; this includes the shareholders, employees and clients. Responsibility towards the greater societal population is unrealistic and unachievable, unless it is a profit yielding venture. This is the main reason as to why most businesses get involved in social responsibility, to try and distract the society away from some malpractices that the firm is involved in. At times, social responsibility actions are a marketing strategy, meant to allow the companies a chance to venture into new markets and increase their market share control.