15th December 2015    4 minute read

Is Corporate Social Responsibility Just A Marketing Gimmick?

Is Corporate Social Responsibility Just A Marketing Gimmick?

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In today’s changing world, as a result of the rapid increase in globalisation, organisations have begun thinking on more productive ways to improve on their business operations, thus Corporate Social Responsibility (CSR) is seen as a means of addressing the issues that arise from rapid globalisation (Stiglitz, 2002). Due to bad publicity on human rights violation and environmental pollution, organisations realised that to consistently sustain their businesses in the 21st century, there is need to legitimise its practices to those outside of its shareholders (Crane et al., 2008). In 1999, the United Nations introduced its Global Compact, which was aimed at providing an avenue for all organisations, alongside with the UN agencies, labour organisations to advocate for responsible corporate practices and assist businesses focus toward proffering solutions to the challenges of rapid globalisation (Blowfield and Murray, 2008). However, the issue of CSR is very complex as while attempting to incorporate the perspectives of key stakeholders into organisations framework, there is need for organisations to strike a balance between meeting the needs of its shareholders and that of its non-shareholders (Godfrey, 2005).

According to Matten and Moon (2004) CSR can be referred to as a collection of different concept which entails business ethics, corporate philanthropy, corporate citizenship, sustainability and environmental responsibility. It cuts across social, political, economic and institutional context. Globalisation in the context of CSR is a topic that has brought about much debate in terms of if it has brought more good or harm to the society (Bhagwatti, 2004).This can also be seen in the rise of employment in different countries, technological advancement, industrial growth, and increase of capital inflow and also in immigration (Wolf, 2004). However, it has led to disparities in wealth creation, exploitation of workers in developing countries, environmental degradation due to lack of proper ecosystem services and also pressure on international cooperation (Najam et al., 2007). In Asia-pacific, over 2.5 million people die on a yearly basis as a result of environmental issues such as, air pollution, untreated water and lack of good sanitation. (Najam et al., 2007).

I do believe that the successful application and Management of CSR in the world will be effective only if the government laid more emphasis on transparency in corporate reporting. This requires that the government should expand financial reporting requirements to include more strict declarations on environmental, human and labour rights, liabilities and risks that are highly to impact on organisations profits both in the present and in the future.

These reports will prevent consumers from engaging in business deals with organisations that have been declared as high risk organisations and also enable shareholders ensure that they engage in appropriate business practices. An example of this can be seen in Canada where organisation’s reporting rate on the Toronto stock exchange has been on the increase, for instance in 2003, it was at 35%,  2007 at 80% and has consistently remained on the high side even till date. It is only organisations that have higher profit margins that can consider CSR.

The question that has been running in my mind is that do businesses actually think about CSR for doing well to its non-shareholders or as a business strategy to improve its profitability? The answer to that question in my opinion is that most organisations are concerned about CSR because of its long term benefits, in terms of good corporate image, employee and customer loyalty. This is because due to rapid globalisation, the competition for customers and employees with dynamic capabilities has risen and organisations have realised that to constantly remain in business and achieve huge profits, there is need for them to pay attention to non-shareholders. Thus, in my opinion it is a marketing gimmick since its use is mainly centered on how to move the organisation forward in terms of profit maximisation. Also in my perspective, CSR is actually a good thing but the intention within which it is been practiced is what should be questioned.

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