Corporate Social Responsibility (CSR) refers to modalities and initiatives enterprises use to help boost their relationship with their immediate society. According to Rendtorff (2009), the relationship between businesses and societies has to remain objective at all time. Enterprise managers continue to prioritize the need for extending beneficial ideas to reach the local communities through projects targeted at alleviating the local communities’ welfare (Campopiano & De Massis, 2015). CSR initiatives take different forms with the most pronounced efforts by businesses categorized in aspects of economic, social, and environmental. The evolution of the global business space has worked towards shaping how firms relate with the local communities (Noe et al., 2017). The change in perspective of the interaction between businesses and society plays a crucial part in establishing a harmonious coexistence with businesses taking a lead role in contributing to welfare issues that spur development (Vallabhaneni, 2008; Voegtlin & Greenwood, 2016). A significant move to this aspect of businesses has been in the manner in which businesses have consistently sought to create awareness on issues of the environment such as appropriate labor relations, global warming, and conscious economic development (Famiola & Adiwoso, 2016). This paper discusses the impact of CSR initiatives on the workforce, the corporate world, and how such initiatives contribute to organizational ethicality from a stakeholders’ perspective.
The current structure of global business sees organizations project themselves as institutions capable of sustaining both internal and external stressors. The ability to redefine models of doing business has created a paradigm shift that sees businesses interact more closely with social players as key stakeholders (Famiola & Adiwoso, 2016). The modalities under which such models exist have a definitive mode that sees businesses prioritize not only the investor interests but also guarantee interests of society as a major stakeholder in its operations (Voegtlin & Greenwood, 2016). Today, business policymakers are keen on the formulation and implementation of socially conscious policies that prioritize the wellbeing of the community as compared to a century ago (Wang et al., 2016). Responsible corporate governance has since become a leading driver of social change in organizational decision making as firms seek to leverage on their acceptability as conscious contributors to population wellbeing (Famiola & Adiwoso, 2016). The outcome of the push has been a significant impact of corporates on both the immediate workforce as well as the corporate world.
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Impact of CSR on the corporate world
Successful businesses in the 21 st century attribute their strides to various aspects that all have communities at the center of their synergy. Firms and other leading brands such as Tesla, Amazon, Wal-Mart, Ford automobiles, and Microsoft all have one thing in common; these organizations have witnessed the transition of the corporate world from an investor-centric model to a society-centric model (Gherghina & Vintila, 2016). In this new regime of the corporate world, businesses have evolved from being platforms of earning profits to agencies of change propelled by the need of prioritizing policies on stakeholder participation (Phillips & Freeman, 2010; Flammer & Luo, 2017). The model of doing business has changed, and with it has come to a variety of ways in which entrepreneurs view and relate with the communities they operate (Story, Castanheira, & Hartig, 2016). Businesses have now moved to invest in adding value to customer products as opposed to limiting risks. It is such deliberate efforts to strike a balance between meeting consumer demands and ensuring return on investment that has to a large extent entrenched CSR as a principle in the current corporate world (Gherghina & Vintila, 2016). Customers in the current market dynamics are willing to pay for value and make their choices on products based not only on their satisfaction but to the threshold to which such products are conscious of the community in which they are originating.
Large corporations such as Toyota, Volkswagen motors, and lately BMW have all found themselves on the receiving end of consumer protest after it emerged that a number of their vehicles released into the market had flouted allowable carbon emission limits. It is such conscious decisions such as regulating carbon emissions to combat global warming and adopt green energy that significantly influence competition in the current corporate world (Monshipouri, Welch, & Kennedy, 2017). Multinational companies such as Tesla, Amazon, and McDonald's have had to redefine their corporate policies to appeal to customers in a bid to remain competitive (Story, Castanheira, & Hartig, 2016). Tesla, as a pioneer manufacturer and assembler of electric vehicles, has seen sales of its Model X and Model S cars grow amid negative publicity based on their safety. Tremendous growth registered by such companies that take deliberate efforts considered socially conscious remains central as a feature that determines their growth trajectory (Monshipouri, Welch, & Kennedy, 2017). Competitively, companies that consider CSR-oriented actions have a competitive edge against companies concerned with producing products for purposes of profits.
CSR has significantly impacted how companies as business entities interact both with governments and other local authorities. Governments have moved to show a level of leniency on taxation and other revenue collection tools on businesses that participate effectively in community empowerment projects (Doh & Guay, 2006; El Ghoul et al., 2019). Firms have reported tax subsidiaries and rebates from governments and other local authorities that recognize their effort in social investment (Story, Castanheira, & Hartig, 2016). CSR has, therefore, had a significant impact on the corporate environment with a resultant close relationship recorded between governments and businesses (Liang & Renneboog, 2017). The adoption of CSR as a corporate governance tool has further altered the current corporate strategy with its inclusion and adoption by several firms confirming how competitive firms can be for continuously engaging the society.
The Impact of CSR on the workforce
Businesses operate in societies and, to the context of their existence, their success lies in how adaptable they can incorporate their workforce as primary communities around their products. It remains imperative that companies’ aspirations are reflected among its immediate community that is the workforce (Baumgartner, 2008). Labor is crucial as a factor of production, investing in human capital for purposes goes a long way in guaranteeing a balanced strategy to success (Grayson & Hodges, 2017). CSR strategies are aligned to communities whose sole representatives in any firm are the workforce. Conscious firms first invest in providing their employees with a favorable working environment, making them appreciate and relate to the principles of the firm (Story, Castanheira, & Hartig, 2016). As a crucial component of the corporate structure, workforce plays a key role in determining if the firm’s intentions and products would resonate with the customer.
According to Epstein (2018), implementing effective CSR strategies by businesses allows the firm to attract quality talent, increasing their competitiveness in the market based on higher retention rates. The study Baumgartner (2008) acknowledges that companies implementing robust CSR strategies allow firms to consistently prioritize their corporate strategy as the workforce effectively implements and relates to the vision and mission of the company. According to Jamali and Karam (2018), having a workforce supported strategy allows the company to operate effectively within its confines and attract a larger customer base based on employee approvals. CSR allows firms not only to invest in their employees but strategically endear themselves on the local community that forms a core part of its customer base in the market (Snider, Hill, & Martin, 2003). Implementation of CSR as a business strategy has significantly changed the rules of doing business globally.
Businesses and investors remain driven to increase the stake on businesses that consciously regards the society in both its decisions and activities. Such businesses are regarded to generate higher value on investment as opposed to profits. In earmarking employers, CSR-oriented firms continue to attract quality talent from the available workforce as they define business purpose providing employees with a form of career satisfaction. Objectively, CSR strategies allot precedence to firms based on their ability to offer solutions to social problems through products that add value to customers’ lives.
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