CORPORATE SOCIAL RESPONSIBILITY 1

Corporate Social Responsibility

Student's Name

Institutional Affiliations

Date
CORPORATE SOCIAL RESPONSIBILITY 2

Corporate Social Responsibility

Stakeholder theory is a fundamental concept that is highly applied in a corporate strategic

management setting and closely associated with the premise of Corporate Social Responsibility,

(CRS). Stakeholder's theory and the concept of CRS can be seen as closely linked since they

have various elements in common. This is because, the two concepts have some elemental

ethical and moral principles. Most of the decisions that are CRS oriented are based on protecting

the interest of the public (Ferrell & Fraedrich, 2015). In this case, the public may imply a

consumer who is a stakeholder since they are directly affected by an organization's decision.

Moreover, CRS is significantly influenced by the strategic motive, a concept that is highly

upheld by the stakeholder's theory. Again, as earlier highlighted, the stakeholder's theory and the

CRS has moral and ethical principles which implies that some components of the CRS may be

relatively influenced by the stakeholder's theory by virtue of both concepts having similar moral

and ethical elements.

CNH Industrial is very keen in creating value for all its stakeholders. One way the

Company creates value for its stakeholders such as its customers is by establishing an extensive

network of its operations geographically and by creating additional product market segments.

These efforts are aimed at creating market convenience and efficiencies among its consumers

while reducing costs of its major product brands. Similarly, CNH Industrial through enhancing

steady and stable growth as well as cost management helps to promote value creation for its

stakeholders. This projects the Company's profit earnings which stimulates the firm's research

and development. On the other hand, LG electronics emphasizes a lot on its stakeholders by

making the company's key goal to be that of keeping its stakeholders happy by upholding

beneficial shareholder's values. Also, the LG has stakeholders consultation, a mechanism that
CORPORATE SOCIAL RESPONSIBILITY 3

enhances communication channels between them and the company, a move that promotes the

company's sustainable management and development.

CNH Industrial stakeholders aims at establishing the company in a multi - dimensional

angle that span beyond corporate transactions. However, to achieve this corporate milestone,

critical aspects related to corporate social responsibility have to be observed. These includes

labor, human rights and sound societal practices that are aimed at instituting higher corporate

ethical and moral standards. Furthermore, observing transparency among the stakeholders and

laying down a positive communication channel forms a very critical move for improving

efficiency, quality services and promoting the company in its bid to achieve their sustainability

goals in future. On the contrary, LG electronics has a Stakeholder Engagement, a strategic duty

that is aimed at enhancing stakeholder's communication programs, research and development,

production among other elements. Stakeholder Engagement strategizes LG's social

functionalities such as human resources while addressing CRS risk management through

collectively sharing information and exercising stakeholder's communication strategies.

Major school of ethics include Deontological, Utilitarianism and Virtue ethics commonly

referred to as Duty, Consequences and Character respectively (Von der Pfordten, 2012). In an

organizational setting, the Utilitarianism school of ethics is the most dominant one. The construct

of Utilitarianism argues that a business behavior is considered appropriate if the behavior draws

more benefits for the greatest number of people. Thus, Utilitarianism is mostly concerned with

those behaviors that derives benefits rather than harm. Corporate managers might act on

Utilitarianism basis due to the construct's ability to uphold professionalism, accountability,

honesty and the desire to care for others and trying to shun conflicts of interest. Again, corporate

managers tend to act in favor of Utilitarianism as it appears more flexible when responding to
CORPORATE SOCIAL RESPONSIBILITY 4

conflicting corporate situations (Kolb, 2007). Deontological and Virtue ethics cannot dominate

the world due to their conflicting premises. In Deontological ethics, rightness is determined by

the elements of act rather than the outcome. This sounds contrasting as we believe that the

rightness of an action is judged by both the act and the outcome thus the law violates normative

ethics. On the same token, the virtue ethics put less emphasis on personal conduct and more on

the inner feeling of an individual. This construct can view a person as innocent especially in

legal circles even when their intentions were ill. A term such as self-defense when an individual

kills another is promoted by the virtue ethics which conflicts with the societal definition of

character rather than inner feeling of an individual when acting.

In a corporate environment, shareholders may have little influence on an organization's

management. Shareholders may protect the interest of a company through leveling a claim in

case the company is undergoing management challenges. In case of such a situation, the

shareholders can evoke the provisions of the organization and call for action as they deem

necessary. Similarly, shareholders participate in voting on organization's decisions. These

decisions may include company acquisitions and on instances of liquidation of an organization's

assets. In addition, shareholders can keep track of corporate performance to enable them make

vital organizational decisions that are likely to influence the company's operations. On the

contrary, the shareholders can be protected by not being granted all the company's rights

especially in the creation of the company's policies and programs. Instead, a shareholder's value

approach should be adopted to limit the shareholder's corporate governance, a move aimed at

minimizing shareholders' capacity as potential risk bearers. Shareholders can promote corporate

social responsibility through voicing their social concern in situations where the company's

policies are not observed. Moreover, in case the company is spending its resources unprofitably,
CORPORATE SOCIAL RESPONSIBILITY 5

the shareholders can pressure the company's management to observe more socially responsible

ways in managing the company's assets.

CORPORATE SOCIAL RESPONSIBILITY 6

References