Contents List of abbreviations - PDF document

Qualification Level Module Name Module Number Project Title Name of Candidate Candidate No. Submission Date Word Count

Contents List of abbreviations .............................................................................................................................. 2 List of tables ........................................................................................................................................... 2 1 Introduction .................................................................................................................................. 3 2 Analysis .......................................................................................................................................... 3 2.1 An Organisation being socially responsible ....................................................................... 3 2.2 What organisations gain from CSR .................................................................................... 4 2.3 Practical application of CSR ............................................................................................... 6 Authors’ View ....................................................................................................................... 7 2.4 3 Conclusion ..................................................................................................................................... 8 4 References ..................................................................................................................................... 9 1

Lis ist of abbreviations CSR- Corporate social responsibility BMW - Bayerische Motoren Werke CBL – Ceylon biscuit limited FMCG – Fast moving consumer goods SLIM – Sri lanka institute of marketing Lis ist of tables Table 1:- Advantages and Disadvantages ............................................................................................... 5 2

1 Introduction The ways that an organisation handles their relationships with groups that has a legitimate interest is called the corporate social responsibility of an organisation (Moon, 2014). Similarly, Hohnen (2007, p.2) suggests that CSR is how an organisation develops their products, processes and services concentrating on their stakeholders, in an environmental friendly and economical way. Furthermore, McWilliam, Siegal and Wright (2005, p.3) state that CSR is the extra effort that a company performs beyond their corporate expectations, to do good for the society. However, Horrigan (2010, p.34) elaborates that in the twenty first century it is important for an organisation to follow good CSR practices to gain corporate sustainability as CSR is largely discussed in the present world. The purpose of this essay is to understand what CSR means and how CSR can be used for the betterment of an organisation. First, CSR will be defined by the author. Secondly, the advantages and disadvantages will be discussed along with business examples for benefits of CSR. Finally, the author’s views on CSR will be illustrated. 2 Analysis 2.1 An Organisation being socially responsible Hopkins (2012, p.15) states that corporate social responsibility is treating the stakeholders of an organisation in an ethical and responsible way to make them feel accepted. Similarly, Mullerat (2010, p.14) suggests that CSR is an attempt of an organisation to protect and to keep the legitimate interests of all its stakeholders. Furthermore, Werther and Chandler (2012, p.5) indicate that CSR as the responsibility of an organisation to not only earn maximum profits but to be accountable to its stakeholders while achieving the corporate objectives. Similarly, Simpson and Taylor (2013, pp.204- 205) define CSR as ‘organisations considering and managing their impact on a variety of stakeholders’. Likewise , Okpara and Idowu (2013, p.4) 3

illustrate that CSR is, organisations identifying the values and needs of their stakeholders in order to give them some attention in the organisations habitual activities. However, Sims (2003, p.44) in his work identifies that organisations perform different activities in order to achieve their goals and that these activities have an impact on several parties who are interested in the business. He further interprets that CSR is the organisations ’ obligation towards the parties who are affected by the organisations ’ activities. In addition, Cavusgil et al. (2014, p.145) suggest that CSR is to operate in an ethical and legal manner that would meet or exceed the expectations of interested parties which will eventually satisfy the stakeholders indirectly. In contrast, CSR is what an organisation returns back to the community and society where they operate and earn profits (Idowu and Filho, 2009). Although authors share similar definitions about CSR (Mullerat, 2010; Weber and Chandler, 2012), there are differences between them (McWilliam, Siegel and Wright, 2005). Built on the above argument advantages and disadvantages of Corporate Social Responsibility is discussed in the next section. 2.2 What organisations gain from CSR Organisations gain advantages and disadvantages by practicing CSR (Smith, 2011; Mullerat, 2010). Consequently, Spence and Morland (2010, P.202) state that CSR is important for an organisation to build a good company image. Similarly, Hohnen (2007, p.11) illustrates that CSR helps an organisation to uplift the reputation by good governance. Furthermore, Paetzold (2009, p.8) states that long term wealth of an organisation can be secured if they practice CSR because the developed corporate image will result in repeat purchases. In addition, Frank (2005, p.67) explains that if a company practices CSR, they can recruit highly qualified employees easily and that the loyalty of customers will develop. Likewise, Smith (2011, p.11) states that CSR builds a relationship between the organisation and the society that creates a positive impact. Furthermore, Hohnen (2007, p.11) explains that innovativeness, competitiveness and the position of the market can be influenced by CSR. However, William, Werther and Chandler (2010, P.19) state that CSR is important for organisations as it affects 4

every aspect and activity of the company. However, there are disadvantages of practicing CSR as well (Mazurkiewicz and Devcomm, 2004; Mullerat, 2010). Spence and Morland (2010, P.202) illustrates that the main disadvantage of CSR for a company is the rise of the cost in its operations. In contrast, Mullerat (2010, p.264) states that less supervision and monitoring of CSR projects is a disadvantage as they do not meet the expected performance levels. On the contrary Mazurkiewicz and Devcomm (2004) elaborate that small and mid-sized organisations often suffer from the cost of CSR and that small firms are squeezed as a result of the greater production of larger firms due to CSR. Similarly, Henderson (2002, Ch.6) cited in Peil and Staveren (2009, p.73) believes that CSR leads to resource misallocation as the bigger firms are more capable to adopt than the mid and small sized firms. Moreover Brejning (2013, p.126) declares that organisations use CSR for promotion purpose rather than to do good for the society and Brejning also claims that it is one of the biggest negative impacts of CSR. Built on the above argument it’s understood that although different authors share different views about the advantages and disadvantages of CSR there are certain similarities (Spence and Morland, 2010; Hohnen, 2007). The table below illustrates them further more. Table 1:- Advantages and Disadvantages ADVANTAGES DISADVANTAGES  Builds a good company image  Costly  Builds relationships with customers  Pressure to small firms  Secured long term wealth  Cost suffered by small firms  Can recruit qualified employees easily  Used for promotion purpose  Competitive advantage  Resource misallocation  Innovativeness [Source: - Author developed (2015) based on (Frank, 2005; Hohnen, 2007; Brejning, 2013)] 5