In the 21st century, companies are concerned with social responsibility to offer conscious products, services and positive engagement with the environment. CSR integrates voluntary social and environmental concern through a unique perspective as applicable to a company. It involves different stakeholders that determine ethical, legal and economic decisions and actions by an entity. For firms which adhere to ethical practices, they yield numerous benefits including employee retention and positive image. However, with emerging guidelines regarding business practices, companies that do not adhere to practices are at risk of legal issues and financial losses.
The impact of corporate social responsibility policy on the workplace and the corporate world
Corporate social responsibility (CSR) policy positively impacts employees’ retention. Internal and external CSR promotes the wellness of employees and ensures equal opportunities which, leads to loyalty to work in an environment where they are appreciated. Still, Companies that engage in CSR create a sense of oneness with the local communities in sharing common developmental goals that helps to attract skilled workers. When companies accomplish social and environmental goals, they encourage positive working morale through concerns for community wellbeing.
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Social responsibility policies lead to ethical business practices that promote a positive image of entities in the corporate world. CSR creates a point of social collaboration with stakeholders to enable effective coordination to the greater good of society. As a result, consumers appreciate the social initiatives which guarantee that the positive brand of companies thrives that ensures positive returns. Ideally, organizations can integrate CSR ethically, economically, and legally which becomes the fundamental of a company’s brand. For instance, Sehgal (2019) argues that Microsoft's implementation of CSR has been a major determiner of its competitive technology advantage. When the public can relate to quality products, services, and disposal of resources for the greater good, companies can position themselves through held positive public perception.
How, and to what extent, corporate social responsibility can be coordinated with an organization's obligation to maximize profits for its shareholders.
In the global business world, CSR can be coordinated with consumer needs to build on a firm's reputation to create value and shareholder returns. A positive reputation offers a variety of benefits including loyal customers and product differentiation. For instance, Microsoft CSR efforts in developing nations ensures central positioning to influence buying behavior through community involvement. As such, for shareholders, especially in socially conscious industries, spending consciously on CSR means higher returns through an increased market share, accessibility, and quality products. Khalil et al (2016) suggest that consumers take into account a company CSR before evaluation and purchasing products. For-profit maximization, integration of needs fulfillment and CSR, and shareholders’ interests are vital to greater profits.
Identify a potential ethical issue at a real-world organization
As a retail company, Tesco faces potential unethical practices in waste management of toxic substances. In 2019, the company received one of the worst ratings from the ethical consumer for lack of policy in handling toxic chemicals such as Phthalates and Triclosan in electronic products (Jasper, 2019). Still, the retail allows plastic packaging that makes their products unrecyclable. For a retail shop that focuses on consumer goods, lack of concern for environmental conservation presents risks for consumers and the surroundings.
Identify the major stakeholders and their roles and responsibilities regarding the issue
The major stakeholders at Tesco include shareholders who must ensure that conscious profitability thrives through ethical environmental practices. Owners have a mandate to ensure that the stores have a policy that guarantees the safe handling of products. Additionally, diversifying the products ensure that products do not favor specific suppliers that offer a higher return. Through the implementation of a feedback mechanism from other stakeholders, shareholders are informed on the relevant approaches to profitability.
Employees have a transformational role to play towards sustainable business practices. Employees include all levels of management that offer advice to the owners on the best practices towards customer satisfaction. Managers must ensure the fairness of contracts with an emphasis on recyclable products. To tackle waste management, better packaging is needed which increases transparency and reduces adverse ecological impact. Ideally, setting ambitious but ethical targets is a step towards motivating shareholders to increase their profit margins ethically.
Also, customers must ensure they purchase quality products with value for money in line with environmental conservation. Buyers' perception of social responsibility should drive their consumption responsibility in electronic products. As such, it is their role to purchase goods from companies that value their wellness in the long run. Also, they have to demand accountability from their retailers in providing goods from companies that adhere to ethical practices. By holding Tesco accountable, they are capable of driving positive change in what is offered on the shelves.
Suppliers have a mandate to adhere to ethical rules and regulations to supply ethical products. Supplies are in charge of internal and external transportation inventory management, packaging, and assembly of products. Therefore, Suppliers have all the information regarding materials and quality of products that are up to standards. Their role is to reduce waste, ensure rightful packaging and handling of products and at the same time reduce costs and maximize profits. They should also implement processes that are sustainable even in the handling of electronic gadgets.
The financial and legal impacts of this choice on the organization, employees, and other stakeholders
Failure to address the issue could lead to lawsuits due to violations of safety and health practices. The misconducts can result in legal hearings for months and years. All workers have a right to a safe working environment that ensures that in the stipulated working period. At the same time, consumers have a right to access healthy products failure to which they can sue an entity for the violations. Indeed, through legal proceedings, the company risks losing money and time that could inform layoffs.
The loss of public credibility is inevitable which lowers profitability. Publication of unethical behavior attracts public scrutiny that adversely impacts the brand of an entity. The aftermath of a case where hazardous waste is involved could result in consumers abandoning sales and shift of loyalty to other retail shops. Still, the negative image lowers the enthusiasm of investors to buy stocks for a company with a damaged reputation. Without corrective measures, Tesco risks losing customers and a lowered stock price.
Conclusively, CSR incorporates encourages philanthropic business practices that best fits society. CSR has become part of organizations mission to make potential impact on the communities they operate in. With immense pressure from the public, social responsibility is a core practice that ensures sustainability, value and idealistic public relations. However, for multinationals such as Tesla which are struggling for a balance, failure to implement ethical practices could result in legal problems and negative reputation.
References
Jasper, J. (2019). Tesco promises to ban brands that use excessive packaging. https://www.theguardian.com/business/2019/aug/22/tesco-promises-to-ban-brands-that-use-excessive-packaging
Khalil, G., Nemar, S., & Sankari, A., (2016). The Impact of CSR on Buying Behavior: Building Customer Relationships. Management. 6. 103-112. DOI 10.5923/j.mm.20160604.02.
Sehgal. G et al (2019). Corporate Social Responsibility: A Case Study of Microsoft Corporation
