Corporate Social Responsibility: Importance And Case Studies
Introduction: Importance of Corporate Social Responsibility
Corporate social responsibility is a model that helps companies to be socially responsible to both the public and stakeholders (Cohen, 2012). Companies are termed as socially responsible when they impact the social environmental and economic condition of the society positively. Corporate social responsibility initiatives can take any form depending on the industry in which the company is operating. CSR is important to both the company and the community (Cohen, 2012). CSR activities help an organization to have good relationships with the employees and the community at large. These activities are also said to boost the morale of employers and employee. For a company to be socially responsible, it must prove to be responsible to the stakeholders first. (Cohen, 2012 ). Most of the companies that come up with CSR programs are well-established companies who can give back to society. Thus this can be termed as an approach for the big corporations. The corporate environment plays a major role when it comes to the development of a country. Because of globalization, many companies find it difficult to handle their stakeholders’ demand. Thus CSR needs to be implemented in companies to achieve sustainable growth and various societal objectives.
Starbucks
Before the initial public offering in 1992, Starbucks was popular because of its corporate social responsibility and commitment (Schultz, & Yang, 2017 pp.77). Starbucks has achieved various milestones such as coming up with a global network for farmers and green building across all its stores. Starbucks has greatly invested in community service activities. It has also come up with groundbreaking college programs meant for its employees.
One major advantage of corporate social responsibility in this company is that it helped Starbucks to grow its brand globally and ensure good relationships with its stakeholders (Schultz, & Yang, 2017 pp.79). However the major challenge for CSR program for this company is that it requires huge amounts of capital investments.
BMW
For BMW manufacturing, corporate social responsibility acts as a catalyst for change. The company is based in California and it has good relationships with the surrounding community (Kofler, 2010 pp.135).One major advantages of CSR for this company is that it has helped in promoting diversity through their environment, philanthropic efforts and initiatives. However, these initiatives are very much costly to the organization while only a few members of the society are said to participate in the CSR programs.
CSR has helped in finding and keeping talented employees it ensures that BMW is sustainable as well as responsible (Kofler, 2010 pp.130). Through CSR programs employees are retained in the business thus reducing the cost of recruiting new employees. One major challenge of CSR program for this company is that its reputation takes hit. Based on BMW CSR policies, they must disclose the shortcomings of their products. For example, BMW have to recall back their vehicles if issues are detected in the model.
Shell
Shells happen to be a multinational company whose headquarters are located in Nearthlands. The company is mainly involved in the production and marketing of oil and gas. The company has its operations in more than a hundred countries (O’Donnell, 2011 pp.146). Shell aims at protecting shareholders investments and ensuring long-term returns. Thus shareholders are recognized as the most important stakeholders of the shell. On the other hand, dormant stakeholders are thought to be host governments. In 1995 shell gained a bad name after it decided to sink the Brent Spar in Atlantic Ocean. Many NGO started a campaign against shell because of its decisions. This made very many customers in the European countries to stop buying products from the shell (O’Donnell, 2011 pp.112). The organization also aims at providing good working conditions for employees and employers. The manufacturing refineries have major effects on the environment in which they operate. Thus the companies have come up with performance loans and reviews. Through working with the local stakeholders, plans are executed to reduce disputes and also improve benefits .The companies hire local employees and local contractors for it to have a good relationship with the surrounding community. The company has also come up with various social investment programs for the community.it supports the community through social initiatives in the area of education, health and development. The company has also partnered with NGO such as the living earth foundation to ensure community development. The CSR initiatives for shell are achieved by coming up with social investment programs. The company has an initiative named as “the live shell wire” which encourages the youth to start their own businesses. This program is available in 24 countries across the globe. Shell also gives scholarships to students. Shell has also come up with an initiative to fight HIVAIDS. Many of the shell foundations focus on environmental effects and community welfare. Shell is said to use $4.5 million annually in community development. Shell also helps employees and employers to live healthy lives. Most importantly the company creates awareness on HIV/AIDS. This has greatly assisted in the fight against HIV/ AIDS. It has also ensured development in the society.
Starbucks Case Study: Advantages and Challenges of CSR
On the other hand reducing emissions, waste, and resources used helps in saving money and maintaining a clean environment (O’Donnell, 2011 pp.110). However, the CSR program for this company increases the cost of production. The increased cost of production normally manifest as the increased cost of products
A company cannot be run as an economic entity performing its duties in a remote society. The Coca-Cola Company is thought to have implemented the variables of CSR. In recent years corporate social responsibility is being tailored together with global business agenda. However to move from theory to actions a company has to beat many challenges. Many businesses like the Coca-Cola Company are torn between two poles; satisfying their shareholders by earning profits, and coming up with CSR initiatives (Isdell & Beasley, 2011 pp.154). However, it has been proved that CSR is able to improve profitability in the long-term because it is capable of reducing risk. Based on the Coca-Cola company corporate social responsibility the major objective of the CSR programs is sustainability. This is usually demonstrated by how the company acts in some departments such as employee development, packaging, recycling, and consumer health. Based on consumer health, Coca-Cola Company is always working to meet the modern life trends of its consumers. Because of this, the company is seen to have reduced the number of calories in its beverages. Based on recycling and packaging the Coca-Cola company has come up with what is termed as “plant bottle” which is recyclable. The company has also managed to achieve a high rate of recycling bottles. The company has also tried to improve efficiency on water consumption. It has managed to improve the use of water by 3.5 percent from 2008.developing employees is another objective of the CSR in the Coca-Cola Company. This company depends on its employees for its success.
In its CSR programs, the company has come up with programs to attract, retain and improve the skills of its employees. This gives employees a chance to be able to exploit their potential while still growing their talents and skills .Thus promoting sustainability in the company (Isdell & Beasley, 2011 pp.145). However, some major challenges facing the company is that employees are from diverse cultures. It is also difficult to come up with a CSR program that suits their audience since they are from diverse backgrounds.
Mc Donald’s corporate social responsibility addresses the needs of the stakeholders. Stakeholders usually affect the firm especially when it comes to consumer perception. The company has come up with many programs to help address the stakeholder’s interest. Stakeholders are normally affected by the business as they also affect the business (Lee & Kotler, 2013 pp.306 ). This brings out the importance of MacDonald’s corporate social responsibility. The major stakeholders of the McDonalds are the customers and the employees. However, they also get to be affected by other stakeholders such as the investors and the community. McDonald’s sees employees as the top stakeholder’s group. Their interests are normally career development and good compensation. McDonald’s helps to meet the demands of its employees by coming up with initiatives and programs. The company owns Hamburger University as a training center for its employees. Customers are the number two stakeholders of the MacDonald’s, the interests of its customers are normally healthy and affordable food choices. Macdonald corporate social responsibilities can be thought to be considerable. The company is much effective when addressing the interests of the stakeholders.
BMW Case Study: Diversity and Reputation in CSR
The primary advantage of corporate social responsibility in this organization is that this company’s assets are inform of reputation, human capita and goodwill thus CSR approaches are essential for legitimization and organizational success (Lee & Kotler, 2013 pp.316). Corporate social responsibility has helped in building a reputation for this organization which has made the organization to have a competitive advantage. The major challenge of CSR programs for this organization is taking a good gauge of the audience to come up with a good CSR program that suits them. CSR programs are also associated with huge amounts of capital. MacDonald’s is thought to partially satisfy the interests of customers and employees (Haski-Leventhal, 2018 pp.313). Thus the company needs to improve its corporate social responsibility efforts.
Primark
Being an international business and having a global supply chain, Primark’s believes that businesses needs to act and also trade ethically. Primark has about 700000 employees across the globe. Thus the company has to ensure that their rights are protected. Primark’s does not own companies that produce its goods, but it has the responsibility of the workers working in the given factories (Wolf, Issa, & Thiel, 2015 pp.25) .it also has a responsibility on shareholders and customers to make sure that products are made accordingly. For example in it’s HER project in Bangladesh; most of the manufacturing workforce is made up of women. This job helps women to become independent and also to reduce their poverty levels (Kofler, 2010 pp.398). However, these women are usually not well educated because they dropped out of school in order to help their families. These women also lack good health, nutrition, and hygiene. Childbirth among these women is usually hazardous, and it also brings out post-birth complications. HER projects educate these women on the various issues facing them. Through these projects, women are usually given tools to take care of their personal lives while working.
The CSR program for this company creates positive publicity. This helps in separating the activities of the company with its competitors. However, the major challenge of the CSR programs for this organization is convincing customers of the outcomes of CSR programs (Wolf, Issa, & Thiel, 2015 pp.35). Due to little or no education to these women most of them are usually unable to grasp what is taught in these programs.
In Tommy Hilfiger corporate social responsibility covers a variety of issues which include suitable business operations, responsible employment of labor, management of the environment and ensuring a safety and a healthy workplace (Sanford, 2011 pp.67). Since apparel manufacturing usually needs a lot of labor, it is clear that production takes place, where there is the low cost of labor (Kofler, 2010 pp.34) .The Company, takes responsibility of educating its workers.
CSR has helped in attracting capital inflows from different sources. The image of a company helps in attracting investors (Sanford, 2011 p.66). People have invested in this company considerably because of its reputation. However, one major challenge for CSR activities in this company is that it means greater scrutiny. A failed CSR plan for a company can bring a lot of scrutiny to the company from the customers and the public.
Nike
Nike is one of the popular brands globally. The company is thought to have more than 50000 workers and mainly produces shoes though subcontractors (Brettman, 2012). Many of the factories belonging to Nike are mostly located in Asia because of the low cost of labor and high unemployment rates. Since 2005 Nike started talking of its CSR activities after many years of not talking about it. It first stated that many of its employees in oversee countries work in impoverished environments with very low pay. Nike started taking new strategies to correct these issues (Brettman, 2012). One of the significant initiatives Nike put in place is abolishing child labor and increasing pay for its employees who work overseas. This has greatly assisted in correcting the image of the company as well as understanding the different needs of their employees.
Corporate social responsibility has helped in improving the brand image of this company. It helps people to buy the product the company is selling, while other enterprises also want to be associated with the Nike. However, one major challenge of corporate social responsibility to this company is that projects are not always cheap.
Conclusion
In conclusion, corporate social responsibility is essential for every organization. It is just more than a business trend. Businesses aiming to stay relevant in this new era, while still increasing their revenues and efficiency are likely to benefit more by embracing CSR.
References
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https://sustainablebusinessforum.com/elainecohen1/74896/best-csr-report-2012 (Accessed 18th November 2018)
Haski-Leventhal, D. (2018). Strategic Corporate Social Responsibility: Tools and Theories for Responsible Management. London: SAGE Publications Retrieved from
https://www.worldcat.org/title/strategic-corporate-social-responsibility-tools-and-theories-for-responsible-management/oclc/1028769724 (Accessed 18th November 2018)
Isdell, E. N., & Beasley, D. (2011). Inside Coca-Cola: A CEO’s life story of building the world’s most popular brand. New York: St. Martin’s Press.
Kofler, M. (2010). BMW – Overview of Corporate Communication, Corporate Identity, Corporate Image, and CSR. München: GRIN Verlag GmbH. Hyperion. Star
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