CSR DEFINITION

Corporate Social Responsibility is the continuing commitment by business to behave ethically

and contribute to economic development while improving the quality of life of the workforce &
their families as well as of the local community and society at large.

Types of Corporate Social Responsibility

In general, there are four main types of corporate social responsibility. A
company may choose to engage in any of these separately, and lack of
involvement in one area does not necessarily exclude a company from being
socially responsible.

Environmental Responsibility
Environmental responsibility is the pillar of corporate social responsibility
rooted in preserving mother nature. Through optimal operations and support
of related causes, a company can ensure it leaves natural resources better
than before its operations

Ethical Responsibility
Ethical responsibility is the pillar of corporate social responsibility rooted in
acting in a fair, ethical manner. Companies often set their own standards,
though external forces or demands by clients may shape ethical goals.

Philanthropic Responsibility
Philanthropic responsibility is the pillar of corporate social responsibility that
challenges how a company acts and how it contributes to society. In its
simplest form, philanthropic responsibility refers to how a company spends its
resources to make the world a better place.

Financial Responsibility
Financial responsibility is the pillar of corporate social responsibility that ties
together the three areas above. A company make plans to be more
environmentally, ethically, and philanthropically focused; however, the
company must back these plans through financial investments of programs,
donations, or product research

Why Is CSR Important?

The movement toward CSR has had an impact in several domains. For
example, many companies have taken steps to improve the environmental
sustainability of their operations, through measures such as installing
renewable energy sources or purchasing carbon offsets. In managing supply
chains, efforts have also been taken to eliminate reliance on unethical labor
practices, such as child labor and slavery.

Although CSR programs have generally been most common among large
corporations, small businesses also participate in CSR through smaller-scale
programs, such as donating to local charities and sponsoring local events.

What Are the Benefits of CSR?

CRS initiatives strive to have a positive impact on the world through direct
benefits to society, nature and the community in which a business operations.
In addition, a company may experience internal benefits through the
initiatives. Knowing their company is promoting good causes, employee
satisfaction may increase and retention of staff may be strengthened. In
addition, members of society may be more likely to choose to transact with
companies that are attempting to make a more conscious positive impact
beyond the scope of its business.

The Difference Between Business Ethics And CSR

Doing the right thing, which means engaging in good business ethics, is not
the same as corporate social responsibility. CSR is the onus on a business to
act in the interest and for the benefit of the community whenever possible—
sometimes even at the detriment of a profitable opportunity that may have
adverse outcomes for the environment or people.

Business ethics is a broader concept that should govern everything a business

and its people do. A company that operates ethically often makes decisions
that support strong corporate social responsibility.

In short, if you were trying to re-create a pyramid of CSR with the

understanding that profitability cannot be the base, business ethics might be a
suitable replacement. When ethics inform everything else up the pyramid,
businesses create more consistent approaches to modern CSR, from profits to
corporate environmentalism.

Business ethics is sometimes confused with corporate social responsibility (CSR). Although the two are
related, they are not quite the same. It is important to understand how they are different as well as how
they are related to each other. We will begin by clarifying what CSR is because this will help us
understand how business ethics and CSR are related.
https://hi-static.z-dn.net/files/dc5/c09c98ce437f05a0a24698a250777681.jpg
The Stakeholder theory is the predominant paradigm governing corporate
social responsibility. The corporations are now aware that they cannot
survive and prosper without the support of society. The growing demand
that corporations should look beyond their business interests and
prioritize interests of society has made it clear that in the form of social
responsibility, companies should look beyond their profi t-making motive
and make sustainable use of the environmental resources in which
society has a signifi cant interest.   Since businesses host their company’s
operations in society, in return, society also expects the business to show
responsibility for aspects of their operations. Managing a quality
relationship with the key stakeholders is crucial for the success of
a ;trfcorporation. One of the company’s key stakeholders is its immediate
communities that suff er the direct impact of its operation.

CSR is referred to the enterprises’ s responsibility for their operational

impact on society; and the consequences of integrating social,
environmental, ethical, and customer and human rights concerns into its
core strategy and business operations in close collaboration with
stakeholders.[4]  Therefore, corporate social responsibility calls for a
responsible behavior integrated into the management system that
operates within society’s interests, sustainably using the environmental
resources. It can be done by integration of corporate ethical standards
and sustainable management practices in the corporation. In this view,
CSR’s exercise must be consistent with the corporate objective of earning
a satisfactory level of benefi t, with an equal willingness to relinquish
some degree of benefi t to achieve its set non-economic goal. [5]

CSR and Business ethics

Managing corporate social responsibility should be seen in the context of
an overall paradigm of business ethics. The normative stakeholder theory
of corporate governance draws its philosophy from ethics. It means that
business corporations are ‘morally’ responsible for looking after a larger
group of stakeholders’ concerns. The theory says that an organization’s
internal process aff ects its identifi ed stakeholders and hence must be
based on moral-ethical standards.

Does CSR practice necessarily involve business ethics?

The concept of CSR and business ethics has distinct identities, yet often
they are used to refer to the same argument. But would compliance with
the norms and regulations of corporate social responsibility practice
necessarily mean that corporation is also following sound business
ethical practice? Let’s understand whether the business activities of the
fi rm in the context of CSR are necessarily related to business ethics:

As, Mallen Baker, a CSR specialists states that “CSR is no longer defi ned-if
it ever really was-by the process of how much money a business gives
away, but by how that business makes its money in the fi rst place”. [6]

In 2001, Enron’s famed energy major, a leading proponent of CSR,

collapsed, following a corporate scam in the company. It was a wakeup
call for the observers of CSR to look deeper into CSR’s corporate claims
and their compliance with legal procedures, in reality. Enron, which
emerged as the USA’s seventh-largest company in mere 15 years,
benchmarked a new success story which later turned out to be a false
narrative. The company’s fi nancial statements indicating profi tability were
false with the doctored accounts concealing overwhelming debts that
toppled Enron over into a massive collapse. [7]

In its social and environmental report, the company listed its CSR
practices eff orts, including the environmental impact, and the CEO
detailed Enron’s vision and values as mutual respect, integrity, and
excellence. Further, the accomplishments listed by the CSR task force of
the company proved out to be nothing but irony. Similar was the scenario
in the Satyam scam of India.

Satyam’s CSR eff orts were acclaimed universally, and the company
received many prominent awards; however, it collapsed due to its
management’s fi nancial defrauding practices against the company and its
stockholders. There was extensive falsifi cation of accounts, showing large
cash and fi xed deposits in the company’s balance sheets when, in reality,
the balance fi gures were a complete sham. In addition to Satyam, India
also faced corporate scam of the National Stock Exchange Limited (NSEL),
highlighting the need for built-in mechanisms for rewarding corporate
governance norms and punishing those violating the same. The instances
discussed suggest that no prior telltale signs of unethical practices in a
corporation are visible until the ‘house of cards’ collapses.

Support for the Stakeholder View of Corporate Social Responsibility Two main kinds of arguments
support the stakeholder view of CSR: instrumental arguments and normative arguments