THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ON ORGANISATIONS AND THEIR STAKEHOLDERS (Term Paper Sample)

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The Impact of Corporate Social Responsibility (CSR) on Organisations and Their Stakeholders
Introduction
Companies' decisions on how much to invest in socially responsible programs and activities, as well as their financial performance, are profoundly affected by the degree to which they engage in corporate social responsibility (CSR) (Lin et al., 2015, p.8292). However, academics have differing views on how CSR impacts businesses and those who have a stake in them (Nalband and Al Kelabi, 2014, p.237). The primary goal of this paper is to analyze the influence of corporate social responsibility (CSR) on different groups inside an organization by applying various theoretical frameworks, such as the stakeholder theory and the shareholder theory. This essay will provide insight into what CSR is, a review of the concept of CSR, and a discussion of the effects of CSR on businesses and stakeholders.
A critical analysis of the CSR framework
CSR is a business strategy that entails accepting responsibility for the company's actions and their consequences for society, the environment, and stakeholders. CSR initiatives may include investments in local communities, the provision of sustainable products and services, the reduction of environmental effects, and the implementation of ethical business practices. Carroll's (1991, p.42) pyramid Model laid the groundwork for the current definition of CSR by emphasizing that businesses don't exist in a vacuum and that each given organization must consider how its operations would affect its employees, the community at large, and the natural environment (Nalband and Al Kelabi, 2014, p.237). According to this model, companies should prioritize their economic duties above all other considerations (Kaman, 2015, p.7). Consequently, charitable obligations are disregarded as unimportant.
This model does an excellent job of providing a broad introduction to CSR. However, it glosses over crucial information, such as the reader's beliefs and values (Nalband and Al Kelabi, 2014, p.237). A further flaw is that it needs to provide more information on recognizing environmental issues (Kaman, 2015, p.7). In terms of social and economic value, corporate social responsibility (CSR) initiatives by companies go well beyond what is mandated by law or even what is deemed "best practices" (Fonseca et al., 2016, p.155). This means that the stakeholder theory can be utilized to define CSR in more detail. Most firms participate in CSR activities and spend in CSR initiatives to placate stakeholders, which are a group that indirectly affects the attainment of a company's goals and objectives (Hamidu et al., 2015, p.89).
According to the stakeholder perspective on CSR, managers are responsible for implementing the proper systems and processes to ensure that responsibilities to stakeholders are fulfilled (Sheehy, 2015, p.628). The most important aspect affecting a company's CSR initiatives is the quality of its organizational governance (Fonseca et al., 2016, p.155). However, some scholars believe that CSR can mislead consumers into thinking that firms care about the environment when they actually do not (Brandt and Georgiou, 2016, p.7; Brandt and Georgiou, 2016, p.58).
The stakeholder approach is widely used in business as a strategic tool (Servaes and Tamayo, 2013, p.1045). In line with Brandt and Georgiou's (2016, p.7) description of the stakeholder approach, which states that its primary goal is "not merely to take into consideration the interests of society and taking responsibility," the findings of Hamidu et al. (2015, p.89) are validated. A key point made by the researchers was the importance of insider information about a company (such as the relationships between upper management and shareholders and workers) (Brandt and Georgiou, 2016, p.7). When an employer cares about its workers' wants and needs, it's more likely to see their complete long-term goals (Nalband and Al Kelabi, 2014, p.237). Based on findings from Fonseca et al. (2016), p.154, firms have begun placing a greater emphasis on satisfying their stakeholders, who represent a significant source of competitive advantage. On the other hand, the stakeholder paradigm is separate from corporate social responsibility.
The shareholder theory opposes the stakeholder theory by arguing that a firm should only care about making money for its shareholders and owners (Brandt and Georgiou, 2016, p.37). Fonseca et al. (2016, p.147) agree, arguing that enterprises improve society by creating new jobs. On the other hand, businesses with only stock price growth in mind hurt their stakeholders, which breaks the company's output and image (Brandt and Georgiou, 2016, p.37). Finding common ground between stakeholders and shareholders while optimizing financial results is a crucial management objective that is thought to contribute to the expansion and prosperity of any given business (Fonseca et al., 2016, p.147).
CSR can be viewed as a management activity by business executives who can increase corporate results (Sheehy, 2015, p.628). As a result, management must figure out which CSR projects would have the most significant impact. To determine whether or not CSR is worth the investment, Jonikas (2014, p.190) developed a conceptual model that managers can use to calculate the return on investment and make adjustments as necessary. According to this theoretical framework, CSR programs have three main objectives. The company's goals are primarily promotional and financial, whereas the stakeholder goals focus on its relationships with its staff, customers, and suppliers (Nalband and Al Kelabi, 2014, p.237). Finally, the societal objective includes civic, political, and ecological issues (Jonikas, 2014, p.192). While this framework defines some financial goals and key performance indicators, it may be lacking in that it does not consider the needs of owners and shareholders.
Among the many advantages of Jonikas's (2014, p.190) model is its willingness to consider the interests of both stakeholders and shareholders. The measures of success proposed by Harrison and Wicks from their multi-stakeholder perspective are in line with the ones taken into account by this approach (2013, p.115). The fact that organizations might have disagreements with those who have a stake in them is an intriguing observation made by the researchers (Harrison and Wicks, 2013, p.117).
More attention must be paid to this problem, and companies should seek solutions to avoid conflicts with affected parties. With caveats (such as high customer awareness of a firm's CSR activities to create CSR value through customers as part of stakeholders and CSR activities being following this company's reputation), Servaes and Tamayo (2013, p.1045) confirmed that CSR activities were positively related to a company's value. Regarding corporate social responsibility (CSR) spending, managers should prefer stakeholder groups that produce value for the company instead of those that provide no such aid (Jonikas, 2014, p.192).
CSR's Influence on Stakeholders and Businesses
Most companies put money into corporate social responsibility (CSR) because they believe it will increase profits, which will benefit the company's stakeholders (Lin et al., 2015, p.8292). Organizational and Stakeholder Responses to CSR. Every stakeholder group will feel the effects of a company's CSR efforts uniquely and varying degrees. An organization's most valuable asset, its people, can be profoundly influenced by its corporate social responsibility (CSR) marketing initiatives in how they think, feel, and behave toward the company's mission (Makasi et al., 2014, p.2600). Furthermore, CSR marketing expenditures considerably affect target audiences, including customers and their brand loyalty (Kaman, 2015, p.7). Additionally, consumers who feel connected to a company's brand are more likely to purchase and develop brand loyalty (Chovanova et al., 2015, p.619). Therefore, a company's standing in the community is proportional to its corporate social responsibility (CSR) marketing spending. However, some businesses abuse CSR by spreading misinformation about how eco-friendly their products, services, and policies are (Makasi et al., 2014, p.2600).
Quantitative research was conducted by Makasi et al. (2014, p.2601) to determine the strategic CSR elements that impacted businesses. 15 of the 20 people polled by the researchers agreed with the statement that CSR efforts boosted both the company's public image and the morale of its workers (Makasi, 2014, p.2604). These results have helped close the gap between doing and not doing anything about environmental concerns that impact CSR. (Supanti et al., 2014, p.6), Who suggested that CSR programs could add to a firm's brand positioning and reputation. Therefore the results are consistent with their perspective. However, it should be noted that the small sample size raises questions about the validity and trustworthiness of the empirical conclusions presented by Makasi et al. (2014, p.2601).
Prutina's (2016, p.227) research confirms a beneficial link between CSR and employee loyalty to the company. This association was found to be mediated by two factors: CSR values and employee engagement in CSR (Prutina, 2016, p.227). CSR significantly affected workers, but only when the CSR values component was added. Given these findings, it's important to emphasize that CSR has little effect on loyalty outside of the realm of values. As Makasi et al. (2014, p.2597) point out, workers' motivation and willingness to do their jobs improve when they are given opportunities to participate in and contribute to corporate social responsibility initiatives. Si...