Significance of Corporate Social Responsibility in Business

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Significance of Corporate Social Responsibility in Business

A sustainable trend in the modern world is the expansion of the social function of business beyond the minimum obligations defined by society. Business today pays more attention to social responsibility programs and improving the quality of corporate governance. For modern business, the coordination of interests with other participants in social interaction is one of the key elements of the development strategy. Corporate social responsibility (CSR) and modern social and labor relations form a new system of social and economic relations not only at the municipal, regional and national levels but also at the international level.

Currently, most experts consider social responsibility in the context of the desire of companies to voluntarily and independently solve the most pressing problems of society. It is recognized that corporate social responsibility is inherently a concept that reflects the voluntary decision of companies to participate in the improvement of society and the protection of the environment (Carroll, 2021). This definition of CSR emphasizes the voluntary nature of socially oriented activities carried out by companies.

CSR is a regularly reviewed and dynamically changing set of obligations that meets the specifics and level of development of a corporation and is voluntarily and consistently developed with the participation of key stakeholders. These obligations are accepted by the companys management, taking into account the opinions of the staff and shareholders, and carried out mainly at the expense of the corporations funds. They are aimed at the implementation of significant internal and external social programs, the results of which contribute to the development of the company, improving its reputation and image, establishing a corporate identity, and developing corporate brands. CSR leads to the expansion of constructive partnerships with the state, business partners, local communities, and civil organizations.

Social responsibility involves some kind of voluntary response to what lies outside the requirements defined by law or regulatory bodies or in excess of these requirements. It is the voluntary duty of corporations to pursue such policies as are desirable in terms of the goals and values of society (Carroll, 2021). In this expanded understanding of CSR, it is assumed that most of the noted areas contain the economic principles of entrepreneurial activity and ethical and legal norms for doing business. The social component is presented here through investment in human development and contribution to the formation of civil society through partnership programs and local community development projects.

Thus, CSR is a voluntary contribution of business to social development through the mechanism of social investment. Social investments of business are material, technological, managerial, and other resources, as well as financial resources of companies, directed by the decision of the management to the implementation of social programs. They are developed taking into account the interests of the main internal and external stakeholders (Carroll, 2021). It is assumed that, in a strategic sense, the company will receive a social and economic effect. Another important definition of the problem under study is a social investment, which is understood as a purposeful long-term policy of the company in relation to local communities in the territories of presence and society as a whole.

The practice of corporate social reporting began to spread widely in the mid-1990s (Carroll, 2021). However, individual corporations and even entire countries have tried to implement non-financial reporting with varying degrees of success. Most companies publish social reports annually, and some even undergo an independent assessment of social responsibility a social audit. In the world, social reporting according to international standards is now represented by over 400 largest companies.

The principles of social responsibility are formed at the expense of numerous public expectations. Today, public expectations for modern corporations have shifted visibly. Society has become not indifferent to how the company conducts its activities, what it is guided by, and how it manages its income. Thus, there was a need to develop principles for the activities of companies within the framework of corporate social responsibility (Carroll, 2021). This serves as a foundation for good relations with a customer base, as well as for modern international cooperation. Socially responsible companies work in conjunction to overcome challenges within the scope of poverty, environment, labor, etc.

Here, it should be noted that the breach of the mentioned CSRs principles by companies in todays world inevitably leads to spoiled reputation, decreasing popularity, and as a result declining profits. The presented cases scenario reflects this state of affairs to a great extent. OnePlus has not been following CSRs standards, which led to undesired outcomes in terms of the corporations image in public mind (Chinese phone giant, 2021). There are other examples of companies that has not been adhering to these principles. For instance, Walmart s popularity has been considerably decreasing, given their insignificant CSR practices (Lake, 2022), which is confirmed by numerous customer reviews and feedback (Customer Service Scoreboard, 2022). On the other hand, socially responsible companies such as Apple, Adidas, or Microsoft have significant reputation and sales. Thus, for Oppo and OnePlus, it is essential to develop CSR and implement its internationally established standards.

References

Chinese phone giant cuts jobs after going up against Apple. (2021). Bloomberg. Web.

Carroll, A. B. (2021). Corporate social responsibility: Perspectives on the CSR constructs development and future. Business & Society, 60(6), 12581278.

Customer Service Scoreboard. (2022). Walmart customer service. Web.

Lake, A. (2022). Walmart was just ranked dead-last in this customer survey. Eat This, Not That! Web.

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