Corporate Social Responsibility Practices †Myassignmenthelp.Com

Question: What Is The Corporate Social Responsibility Practices? Answer: Introduction 'Corporate social responsibility strengthens corporate reputation and performance This essay is based on the importance of corporate social responsibility (CSR) in the business operations. From many years, CSR is the important part of the business activities. There are many companies which are dedicated towards such activities. Such kinds of activities create values for the shareholders in the company as well as focuses on the various groups of stakeholders. Along with this, by the CSR activities, those companies are able to improve their value in the market (Arora Rana, 2010). By various researches, CSR activities are positively related to the companys value and the performance of the company. The relation between the CSR practices and the companys value is quite uncertain and unclear. It might be because there is the lack of understanding related to the channels by which the CSR practices affect the value of the company. There are many theoretical models which assume that there is the direct connection between the companys value and CSR activities. The aim of t his essay is to explore the relationship of companys value and its performance with the CSR in the company. The value of the company is based on the ability of the CSR activities to influence the group of stakeholders in the company (Bird, Moment Reggiani, 2012). CSR and companys value Defining CSR- Before providing the detail of CSR activities in any business, it is important to understand the concept of CSR in the company. Baron (2001) stated that corporate social responsibility is an incompletely defined concept. A broad definition of CSR is given by World Business Council for Sustainable Development i.e. CSR is the kind of promise of a company to contribute for the ecological development, working with the people, and the local society to improve the quality of life (Bird et al, 2007). The definition depicts the accountability of any company towards the environment, treatment of the employees, the society and the human rights. Basically, CSR is concerned about the various groups of stakeholders. CSR is the important factor which ensures the growth of a company in terms of sustainability which is the basic concept of growth. CSR is the commitment of the companies including the external citizen of the community, stakeholders, legal agreements and regulations (Groening Kanuri, 2013). It includes the legal, ethnic, economic and environmental management by the company. CSR is the essential concept which makes sure that the companies must be responsible for the impact of stakeholders which is the obligation from the company. Under CSR activities, the companies should do their work with justice, accountability and the efforts to develop and improve the quality of the lives of the staff as well as the society (Cordeiro Tewari, 2014). A study done by Larsen (2001) stated that consumers are always interested in the companies having environmental protection activities, CSR and ethics in the business operations. There are four responsible dimensions in the CSR practices i.e. legal, ethical, economic and philanthropic responsibility. There are two different views regarding CSR i.e. classical view and stakeholder view. In the classical view, the CSR activities are based on the neoclassical economic theory which includes economic profit making terms and focuses on the profit maximization of the stakeholders. On the other hand, stakeholder view is based on the stakeholder theory including social responsibility of the company which is required to understand the interests of all the stakeholders by the actions. So, it is understood that CSR is the effective practice for the companies to improve their value and the performance in the operating market as the customers always consider those companies which exercise CSR practices for the welfare of the society. Role of CSR in enhancing corporate reputation Based on past and recent researches, it is clear that corporate reputation is the base of getting competitive advantage in the market and this is the strategic success factor for the company. Reputation cannot be defined easily as it is based on various factors i.e. stakeholders views, expectations from the companys performance and intension. Having good reputation in the market is essential for the growth of the company. Corporate reputation is one of the most valued assets and it has importance in the growth of the company and its performance (Jacobs, Singhal Subramanian, 2010). Corporate reputation and the financial performance of the company have direct relation with each other. There are various studies which have confirmed that improved brand and corporate reputation is one of the most important motivations in the CSR practices. According to Wang (2003), business reputation plays an important role in terms of strategic marketing and the markets because service quality is important factor to attract the customers. Corporate status can influence the behaviors of the employees in the company. So, reputation can be described as the important feature of the company which differentiate one company form another in the operating market. A strong and positive corporate reputation is the important competitive advantage in terms of product differentiation. The reputation of the company is one of the most crucial aspects which are associated with the CSR practices. The consumers, suppliers and the society generally want to stay connected with the CSR practices in the company. The high level of motivation and the stakeholder concerns provide the outcome of good citizenship. The overall effect of CSR practices is based on the corporate social performance which impacts the reputation of the company in the society. Connecting the corporate reputation with the CSR practices, many researchers have realized that the companies are able to improve the brand and corporate image in the society which are the important parts of the corporate reputation. Along with this, having good brand name, companies are able to support social causes by the ethical business practices. By focusing on the stakeholders impact, companies can also improve the reputation in the society. Basically, the reputation and the success of the company depend upon demand of the stakeholders and meeting their expectations in the business. So, according to Donaldson and Preston (1995), CSR is the essential for building and enhancing the reputation of the firm. For instance, Barmer and Prevelin (2006) stated that having positive reputation, a company can make the stakeholders in the CSR practices. To get higher profit and to survive in the market for long-term basis, company should have higher reputation in the market. CSR is the most essential component of the reputation which builds up trust and goodwill among the group of stakeholders. Having good corporate policy in terms of environmental sustainability, a company is able to attract the stakeholders in the business. The initiatives of the company towards environmental protection are not accountable for the society but also improve the performance of the company by an improved image. The ecologically appealing actions by the company i.e. reduced emissions can be able to enhance the image of the company and attract the customers. So, it is clear that company is able to enhance its image and reputation by adopting environmental friendly activities or focusing on costly environmental practices in the business operations. Role of CSR in companys performance The various researches have mentioned that there is the positive relationship between companys performance and CSR activities. Many studies provide support to the existence of CSR practices in the business. The concept of CSR practice is not new in the companies. Most of the developed countries are aware about the CSR issues and they are concerned about that. The studies found that there is the positive relationship between the CSR and the companys performance. Having social responsibility, some companies have better results in terms of business performance. Companies can get better social responsibility by identifying and resolving the social issues which are closely related to the company. By focusing on the ethical responsibility, the company is able to get a better level of business performance. Social responsibility adopted by the companies can be described as the opportunity to gain good results in the business operations so; the companies have to implement all those activities which are in the welfare of the society. If an organization wants to adopt the practices related to social responsibility, then the organization will not only work for its employees, workers, clients, suppliers and society but also provide benefit to the environment surrounding to the organization (Amini Bienstock, 2014). There are two major theories which have supported the relationship between the performance and corporate social responsibility. Those theories are stakeholder theory and social exchange theory. Stakeholder theory provides the relationship of CSR practices with the relevant stakeholders such as employees, customers, shareholders and wealth maximization of the shareholders. According to Gherghina (2015), the instrumental stakeholder theory argued that there is the positive relationship between the value of the company and corporate social responsibility. Having ability of the company to be involved in the corporate social responsibilities, company is able to make the society to view the company in terms of good image and good reputation. Along with this, the theory explains that shareholders are connected with the company based on the returns provided by the company (Kansal Joshi, 2014). Thus, the stakeholder theory connects the shareholders and the society with the corporate performa nce. Further, the social exchange theory describes that the people in the society purchases from the companies and the companies can provide the values by engaging in the CSR activities and programs. So, the theories on the CSR practices explain the relationship between the CSR practices with the companys value and performance in the society. Thus, the engagement of the company in the corporate social responsibility has positively affects the value and performance of the company. Further, the CSR practices are also affects the financial performance of the company among the customers (Aras, Aybars Kutlu, 2010). It is the fact that the companies are the essential part of the society and the business activities of the company always impact the social and environmental groups within the specific community. By the CSR practices, companies are able to prevent the society form the harmful problems (Orlitzky, 2013). By the commitments, companies are able to solve the social and environmental problems to improve the quality of the life of the society. Because of these reasons, the companies having socially responsible behavior are acceptable everywhere in the society and they are able to improve their efficiency among the customers. From the many researches, it is observed that the companies which are generating the biggest profit in the business are more accountable and liable towards society and have greater value and improved performance in the society (Flammer, 2015). Conclusion The objective of this essay is to explore the importance of the CSR practices in the business to improve the performance as well as companys value in the society. Form the above analysis; it is observed that CSR is the important factor which ensures the growth of a company in terms of sustainability which is the basic concept of growth. It is understood that CSR is the essential concept which makes sure that the companies must be responsible for the impact of stakeholders which is the obligation from the company. CSR is becoming mandatory for the companies. Along with this, CSR is also important factor for enhancing the value of the company in the community as having good brand name; companies are able to support social causes by the ethical business practices. The reputation and the success of the company depend upon demand of the stakeholders and meeting their expectations in the business so many researchers have argued that to get higher profit and to survive in the market for lon g-term basis; company should have higher reputation in the market. Further, it is analyzed that, there is the positive relationship between the companys performance, value and the CSR practices as the customers always consider those companies which have socially responsible behavior. Thus, by CSR actions, companies are able to improve the brand and corporate image in the society which are the important parts of the corporate reputation. There are two theories which have provided in the support in the relationship of the CSR and the firms performance. So, in conclusion it can be said that having the CSR practices, companies are able to prevent the society form the harmful problems. References Aras, G., Aybars, A. Kutlu, O. (2010). Managing corporate performance: investigating the relationship between corporate social responsibility and financial performance in emerging markets: International Journal of Productivity and Performance Management. 59(3). pp.229254 Arora, D. Rana, A.G., (2010). Corporate and consumer social responsibility: a way for value based system: Aims International Conference on Value-Based Management Bird, R., Hall, D.A., Moment, F. Reggiani, F., (2007). 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