Establishing Whether Corporate Social Responsibility Should be a Priority for Companies

 



Establishing Whether Corporate Social Responsibility Should be a Priority for Companies

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	Introduction
	Corporate social responsibility refers to the obligation that companies have, which is also a legal requirement, to respect for people, environment and the communities surrounding them, through engaging in activities that preserve the environment and better the lives of people in the community that they operate. There has between growth in emphasis for companies to engage in corporate social responsibility, and as a result, this is affecting the relationship between different companies and their stake holders, such as the customers, employees, communities, government and investor (The Economist 2005, p. 2). This is mainly because corporate social responsibility is an added cost to the company and hence it reduces the company expected profits.
	Due to the complaints on profits reduction due to the companies’ participation in corporate social responsibility, there has been argument that corporate social responsibility should not be a priority to organisations as it detracts from the primary aim of doing business, which is to make money. This paper aims at finding out how accurate this statement is. 
	Elements of corporate social responsibility
	There are four different elements of social responsibility, which are divided in to two broad groups for clear distinctions. These are the external and internal environment of the company. The external environment includes elements such as the rule of law, regulation, competition and standards and the complementary CSR institutions. On the other hand is the internal element, which is the internal structure and policies of an organisation (Fontenea 2003, p. 4). When a company is planning to participate in a corporate social responsibility, it is the role of the management to ensure that all the elements of the social responsibility are met. 
	Corporate social responsibility is seen as rule of law, where all the companies operating in a region are supposed to give back to the community and to take care of the environment for sustainability. This is usually done through involvement in project that preserves the environment. As a form of competition, those companies getting involved in corporate social responsibility are seen to have an edge other their competitors as many people like to identify with them. When looked at internally, every company has a way of giving back to the society and different companies have policies put in place that are followed to guide on when to do a certain project the shows gratitude to the society. Outwardly, corporate social responsibility it is used to gain an edge over the competition and to fulfil government set policies, while internally, is used to win loyal customers, and as a source of employee pride as their perspective for the organisation changes (Stawiski, Deal and Gentry 2010, p. 2). 
	Corporate social responsibility is a way of a company giving back to the society. This is an expensive way for any company to use in creating a name in the society. The companies are involved in sponsorship programmes, environmental preservation programs, among others that are meant to attain benefits for the society (Mofid 2003, p. 11). These results in reduction of benefits to the company stake holders and has resulted in different feelings. Those opposing company participation in corporate social responsibility argue that the main role of any business is to make money and if the company uses its money in charity programs, it reduces the amount of profits made and hence goes away from the key principal of running business (Mofid 2003, p. 11). On the other hand, there are those who support the participation of companies in corporate social responsibility arguing that is more beneficial to the company as compared to the resources spent on it.
	Benefits of corporate social responsibility to the company
	Companies that perform corporate social responsibility benefit in many ways than those that are not concerned with giving back to the society. There are companies, which have reported high benefits from their participating in corporate social responsibility, such as Indian company, the TATA group that is involved in many projects to benefit the local community (Hohnen and Potts 2007, p. 12). Among the ways through which these companies benefit from their actions are.
	Achieving pride among the people or the society due to the benefits that the people gain from the company actions, they are usually proud to be associated with the company. This makes it easy for the company when hiring and to retain employees (Hohnen and Potts 2007, p. 10). Due to the good reputation of the company, the employees are motivated and the company wins loyal customers in the market. This in turn translates to better performance and an edge for the company above its competitors. Th