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

Table of Content List of Abbreviations ..................................................................................................................... iii 1.0 Introduction ............................................................................................................................... 1 2.0 Analysis..................................................................................................................................... 1 2.1 Interpretations of CSR ........................................................................................................... 1 2.2 Pros and cons of CSR ........................................................... Error! Bookmark not defined. 2.3 Practical examples of CSR .................................................................................................... 3 2.4 Author’s reviews and analysis ............................................................................................... 4 3.0 Conclusion ................................................................................................................................ 4 4.0 List of references....................................................................................................................... 6 ii

List of Abbreviations CSR: Corporate Social Responsibility iii

1.0 Introduction The objective of this report is to provide the reader with a broad understanding of Corporate Social Responsibility as an important management concept, and analyse its impact on organisations and other stakeholders. Accordingly, Schwartz (2011, p.18) suggests that CSR is the ‘duties and obligations of an organisation to carry out their bu siness operations in a manner which promotes the interest of the society as well as the stakeholders of an organisation.’ The first section of this report will provide a brief introduction on the concept of CSR and the various definitions and frameworks pertaining to it. Secondly the importance of CSR, its advantages and disadvantages will be discussed. In addition, this section also analyses the impact of CSR on organisations and other stakeholders. For example, Urip (2010, p.13) believes that CSR has the ability to ‘optimise the core features of an economy through sustainable benefit to all’ which further implies the value created by CSR. Finally, the author’s views and analysis on the topic as well as any significant points discovered will be highlighted thus concluding the assignment. 2.0 Analysis 2.1 Interpretations of CSR European Commission (2012) defines CSR as an organisation acting in a socially responsible manner towards its stakeholders by voluntarily adopting social and environmental concerns in their business operations. Similarly, Sims (2003, p.43) depicts that CSR is ‘the obligations made by organisations to uplift the quality of life of the workforce and their families as well as the community.” In addition, Kotler and Lee (2005, pp.3) illust rate that CSR is where an organisation takes steps to uplift the standard of life of the community by adopting flexible business practices and through the donation of corporate resources. These authors (Sims, 2003; Kotler and Lee, 2005) emphasise that CSR is about a business giving back to the society. Furthermore, the World Business Council, (2005, cited in Banerjee 2009, pp.16) suggests that CSR is when an organisation takes measures to improve the quality of life of the society and contribute towards sustainable economic development. However, Mullerat and Brennan (2011, pp.545) define CSR as ‘an organisation acting in an ethically or socially responsible manner towards its stakeholders’. Further, they infer that an organisation must take measures to impro ve the standards of living whilst conserving the profits of the organisation for its stakeholders. In 1

addition, CSR is where an organisation exceeds expectations with regards to the obligations towards its stakeholders through regulation and corporate governance (Johnson and Scholes 2002, cited in Banerjee 2009). In contrast Carroll (1979, cited in Banerjee 2009, pp.16) suggests that CSR is the legal, economic, ethical and discretionary expectations of the organisation in the minds of the society. Additionally, she states that an organisation has an obligation to act in the best interests of the society. While a majority of academic researchers (European Commission, 2012; Sims 2003; Kotler and Lee, 2005) share the same opinion pertaining to CSR there are diverging opinions relating to the topic (Mullerat and Brennan, 2011; Johnson and Scholes, 2002). In the meantime, the following section will examine the pros and cons of CSR. 2.2 Pros and cons of CSR Fernando (2011) states that the organisations in general execute CSR in a manner which aims to create a balance between fulfilling business objectives and satisfying the diverse needs of the community. In fact, it is said that an innovative CEO who understands the importance of CSR will be able to utilise it in a manner which would enable the company to maximize profits and obtain competitive advantages in the market place (Werther and Chandler 2010). Keinert (2008) states that CSR aids in the expansion of a business towards new market segments and boost opportunities in forming new strategic alliances. Also, he states that CSR enables a business to benefit internally through enhanced labour relations and employee commitment which in turn generates better financial and strategic outcomes. Additionally, Smith (2005, cited in Okpara and Idowu, 2013) contends that a firm practicing CSR attracts more investors as these firms exhibit a sense of ethical guarantee. Further, he claims that investors prefer to engage in businesses that have excellent employee relations, environmental stewardship and corporate governance. Similarly, Mullerat (2010) CSR encourages a company’s innovation as it helps comprehend the influence of business operations on the society and thus promotes the production of innovative and profitable products and services. However, he argues that although companies who adopt CSR have enjoyed many benefits they have also suffered from drawbacks as well. For example, Mullerat (2010) argues that the main critic with regards to CSR is the time required to monitor and regulate the implementation of such practices. Similarly, Spence and Painter – 2

Morland (2010) stress on the fact that organisations who practice CSR found time to be a major drawback when attempting to execute CSR policies efficiently and effectively. Furthermore, they suggest that although businesses portray the impression of ill- using time it was more of a case of them not having sufficient time to apply such policies within the organisation. Carroll and Buchholtz (2014) state that another downside faced by organisations involved in CSR is that they may be placed in a vulnerable position when competing in the global market. They claim that the increased cost of production caused by considering social and ecological factors would compel organisations to increase the prices of their products thus diminishing their competitiveness in the international market. However, they (Carroll and Buchholtz , 2014) argue that this criticism cannot be justified after taking into consideration the fact that CSR has become a worldwide phenomenon rather than only being practiced by a single firm. 2.3 Practical examples of CSR Examples of organisations that have benefited from CSR include businesses like Brandix who have taken steps to become the most eco – friendly company in Sri Lanka (Brandix, 2009). For example, the establishment of the ‘Brandix eco – center’ in Seeduwa contributed greatly towards achieving these objectives. It helped to reduce Carbon emissions by eighty percent, Sulphur emissions by seventy one percent and reduced portable water usage by sixty three percent. As a result, Brandix was bestowed with the “Energy Globe Award” w hich is recognized worldwide and they were one of the few contenders to be labeled for the Energy Globe World Award in the ‘Air Category’. This has in turn uplifted the status of Brandix to a global level as well as helped increase their customer base considerably. Similarly, Disney (2010) has conducted its operations successfully whilst acting in a socially responsible manner towards the environment. For example, they have put into operation a number of measures aimed at safeguarding the environment such as providing financial assistance, conserving wildlife and creating awareness among the general public. As a result of Disney’s successful use of resources aimed at conserving the environment their corporate image has improved significantly. For this reason, the net sales of the company increased substantially in 2010, recording a twenty percent increase in net income whilst enjoying a five percent increase in revenue during the period under consideration. 3