Answers those discussion questions
Corporate social responsibility (CSR) is one of the hottest issues in corporate boardrooms these days, partly because it is becoming increasingly important to employees and other stakeholders. In your opinion, why have stakeholders given CSR more attention recently?
Does abiding by CSR standards potentially cause companies to have conflicting objectives with some stakeholders in some situations? If so, how can these differing goals be reconciled – or can they?
make two comments in two different friend discussion
I believe CSR has come more into focus here lately because it has the ability to make or break a company in some instances. Customers now are more aware and do more research about an organization and their ethics before making purchases. This makes CSR very important when making big decisions within a company. Take Nike for example, not long ago they were being boycotted for the low wages and working conditions (among various other things) of their factory employees. If Nike would not have addressed these CSR issues, they likely would have been put out of business. By abiding by CSR standards several stakeholders hold different beliefs about those standards. Nike addressed it’s CSR issues by providing better wages and working conditions, which I am sure came at a cost to their bottom line. This in turn, can effect several stakeholders within the Nike organization. Companies would like to see increases in profit and paying better wages takes away from profits, but this also affects their customers that are now more willing to buy merchandise after seeing the changes to fix CSR issues. I believe there is a sort of push and pull demonstrated between all the stakeholders within a company, like a fine balance. Overall everyone needs to benefit, some just benefit at the expense of others sometimes, in this case of Nike, employees and customers benefited at the expense of the bottom line or stockholders.
Corporate social responsibility is described in the textbook as, ” consisting of organizational activities intended to benefit society and the environment beyond the firm’s immediate financial interests or legal obligations.” I believe that this issue has stood on the forefront of current business practices due to the relationship between positive CSR reputations relative to better financial performance, increased employee loyalty, and improved customer, job applicants, and stockholder’s relationships. It’s no secret that due to recent political and social issues our country has faced, supporting businesses that have the common good of our society in mind has been prioritized over several other factors. For example, a company that has done well with their CSR reputation is Verizon Mobile with their recent campaign, “Taking responsibility for our shared future,” where they elaborate with, “Our goal is to move the world forward for everyone by expanding digital access, protecting the climate, and preparing people for the jobs of the future.” By establishing such a strong message that values their social responsibility, they’re supporting the triple bottom line that results in positive turns and sustainability within their business. By taking initiatives such as these, Verizon is supporting profitability within the marketplace as well as improving social conditions. With that being said, CSR standards can cause conflicting objectives with some stakeholders as companies are unable to satisfy all stakeholders in regards to conflicting goals and visions for the company. I believe that these issues caused by differing goals can be minimized by prioritizing the importance of social responsibility and the relationship between the organization and it’s environment. By satisfying corporate values within our environment, the needs of shareholders and employees will in turn be satisfied.
Corporate social responsibility has become more prominent today because how widely available information is. In America specifically, we have seen the Black Lives Matters movement, we have seen a push for LGBTQ community and we have seen women fight to close the financial gap. All those things have to be taken into consideration when a business is making decisions and choices. Stakeholders are taking notice of companies that are making changes and are choosing to support those companies who are finding ways to positively impact these movements. Companies and businesses who are finding ways to hit the “triple-bottom-line” are seeing the return. Ben and Jerry’s ice cream is a great example of a company taking CSR seriously. Ben and Jerry’s has advocated a wide array of issues including racial injustices, GMO labeling, fair trade, climate action, etc.
No matter what decisions you make you are going to have conflict. Abiding by CSR standards will inevitably cause a conflict in objectives with stakeholders. In the short term it is going to cost more for companies to abide by CSR which in return could rub some stakeholders the wrong way. Stakeholders are primarily concerned with seeing returns on their investments and are not always going to see the benefit of spending more on something in the short term and losing out on money to better position the company in the long term to increase their triple-bottom-line. I think these differences can be reconciled in most situations as long as the company is communicating what they are doing and why they are doing it. At the end of the day companies are ultimately trying to increase their bottom line and if they can clearly and precisely relay that plan it should satisfy the stakeholders.
Great post! I loved how you incorporated Nike as an example because it just goes to show that no company is exempt from the negative impacts of failing too adopt a CSR and establish corporate values. You brought up a good point about how creating these values comes at a cost, and that’s why we see companies cutting corners and doing business as usual to avoid having to reinvest their money into supporting their social responsibility. Overall though, I feel like when businesses involve themselves with the environmental and societal obligations they have, it pays off in the end. No one wants to work for or support a company that doesn’t practice ethical behaviors, and you gave a great example of it.