Corporate Social Responsibility (CSR) (Essay Sample)

Corporate social responsibility (CSR)
Corporate social responsibility means interacting ethically with the community by not only focusing on maximizing profit but by voluntarily carrying out activities that can benefit the community. CSR helps the companies to succeed through maintaining a good image of the company. In this century, CSR is not optional choice because the governments from all over the world force the companies to adapt the principle.
Theories of CSR:
There are several approaches or theories of viewing CSR. In this report we will consider the most important theories, stakeholder's theory, monetary theory and managerial theory.
Stakeholder's theory:
This theory focuses on the stakeholders in the company. Stakeholders are any party or parties affected by the activities of the company. In the traditional system, companies focused on the shareholders who were the owners of the business. However, this theory makes it prerequisite to identify those who are stakeholders in the company and take measures to ensure that their needs are met CITATION Fre84 \l 1033 (Freeman, 1984). Thus, all other parties affected by the company, including the competitors, are considered as stakeholders and it is important to take into account their interests.
Monetary theory:
A company first responsibility is economic or monetary responsibility. In this case, the company should ensure that it has achieved its monetary obligations and therefor be able to turn up a profit CITATION Por06 \l 1033 (Porter & Krammer, 2006). In simple terms, a company should be able to make as much money as is necessary to run it. If a company is unable to make enough money; it cannot cater for its employees, it is a liability to partners and shareholders and it cannot even raise enough money to cater for the other corporate social responsibilities. Thus, the importance of this theory is emphasized.
Managerial theory:
In this approach, social responsibilities are considered by the firm in an internal perspective.