How an ethical and socially responsible approach to business could

improve organizational performance.

The topic of CSR has been widely proposed and used in the corporate organizations as by the
name of corporate citizenship, strategic philanthropy, social responsibility and other monikers.
Each of it has different implications on the society. Anyhow, the dominant archetype underlying
Corporate social responsibility is focused to the philosophy to create a “shared value.” Shared
value model illustrates that a value should be created for shareholders but also creating value for
society simultaneously, making shared value model as a win -win situation for both the
corporation and to the society. (Rangan et. al, 2012) Various theories has been proposed to date
to define the stance of CSR whereas the widely accepted definition of CSR is the dedication by
the organization to function ethically and provide to economic development while enhancing the
quality of life workforce and their families as well as the local community and society at large
(Pearson, 2008).

CSR is concerned with the ways in which an organization exceeds its minimum obligation to
stakeholder specified through regulation. However, social responsibility has different stances
according to the organizational viewpoint. This viewpoint will reflect how the organization will
be approaching such responsibilities. However, the stereotypical view of social responsibilities is
laissez faire, enlightened self-interest, Forum for stakeholder interaction and shaper of society.
Laissez faire viewpoint is that business should be making profit, pay taxes and provide jobs.
(Friedman et.al, 1970)32. Enlightened self interest viewpoint is to create long term financial
benefit to the shareholder as well managing a good relationship with the stakeholders (Macloed
et.al, 2001). A forum for stakeholder interaction viewpoint is to explicitly incorporate multiple
stakeholder interests rather than just shareholders as influence on organizational purpose and
strategies. Such organizations adopt principle of sustainability strategy one that ensures a better
quality of life by attending to all of three dimension of environment protection, social
responsibility and economic welfare (Hummeles,1988). Shaper of society viewpoint regards
economic consideration as a constraint or secondary importance. An organization with such
viewpoint has strategic purpose of ‘Changing the rules of the game’ through which they can
benefit but keeping the societal benefits as their top priority (Vogel et.al, 2005).

Acknowledging the contrasting drivers of CSR inside the company, and the disparate catalyst
determine the various initiatives, we find it naïve to presume and expect a company to somehow
braid all this mutually and assimilate it as part of business strategy. However, stances of social
responsibility provide a progressive more comprehensive ‘list’ of stakeholder’s interest and
vaster breadth of standards against which strategies and performance will be judged. Social
responsibility stances provide the progressive way to craft CSR programs that resonate the
company’s business value while addressing humanitarian, social and environmental challenges.

Sustainable public relation: Business engages in CSR because it’s a noble thing to do, motivated
by the logic that is the integral part of the society a corporation has to contribute to the cause of
community needs.13. for example, “grow up great” by PNC’s early ‘childhood education
programs’ and Goldman Sachs “10,000 women” initiative to support and train women
entrepreneurs in developing countries. Which is the direct expression of their collective business
strategies (Ridurnolu et.al, 2009). Integrating the corporate budget for Social responsibility has
its perks to an organizational value in such a way by creating a positive brand image and
increasing public relations with the people. For example, Microsoft’s past CEO “Bill Gates”
donated his 2/3rd of his income to the charity, forming an intangible Brand equity by increasing
brand awareness and improved social capital, which is later translated to business profits. which
can be either goal of an organization in the name of social responsibility, or to improve societal
and environmental aspect along with the company’s finance or maybe a form of the
philanthropic act. Definitely benefitting the Organizational outcomes. (Marquis, et.al, 2009)

Achieve symbiotic goals: Marketing manager and operation manager often create a realm of
CSR were creating social and environmental benefits, while also increasing business profitability
and opportunity, by improving value chain of the upstream or downstream supply chain
furthermore, improving operational effectiveness (Ridumolu et.al, 2009). Example, Nike creating
a code of conduct governing, where employees should be compensated fairly, employee should
not be exposed to harmful or unhealthy environment as well as launching an initiative to reduce
its negative effect on environment of its value chain by changing material sourcing to
manufacturing, shipping and product delivery (Nike, Inc, 2011). Once Nike realized supply chain
issues, it launched a supply chain initiative that had a significant and industry-leading impact
moreover motivated by its conceitedness rather than social conscience (Smith, 1990).

Meeting the benchmark: Companies are obligated to satisfy its customers and shareholders
primarily but for the companies with negative brand equity might have a hard time to match its
previous set of outcomes and results. Example, the case of Ncell mobile carrier which frauded
the government by avoiding millions of taxes, creating an anti-social mass movement against
using its product which was much hyped by the social media. So, for companies who are
culpable use the form of social philanthropy to fend up potential reputational damage and rebuild
its brand equity.

A corporation can serve to a social or environmental purpose also benefitting the corporation.
The organization performing social responsibility forms its core competencies in the form of
brand equity, goodwill, market disruption, increase in profits and increase the shareholder's trust.
Corporation’s employees and management can care about social responsibilities, while also
supporting and expressing company core business priorities no matter of the stances they have
for CSR.

The topic of CSR has been widely proposed and used in the corporate organizations as by the
name of corporate citizenship, strategic philanthropy ,social responsibility and other monikers.
Each of it has different implications on the society. Anyhow, the dominant archetype underlying
Corporate social responsibility is focoused to the philosophy to create a “shared value.” Shared
value model illustrates that a value should be created for shareholders but also creating value for
society simultaneously, making shared value model as a win -win situation for both the
corporation and to the society. (Rangan et. al, 2012) Various theories has been proposed to date
to define the stance of CSR whereas the widely accepted definition of CSR is the commitment by
the organization to behave ethically and contribute to economic development while improving
the quality of life workforce and their families as well as the local community and society at
large (Pearson, 2008).

CSR is concerned with the ways in which an organization exceeds its minimum obligation to
stakeholder specified through regulation. However, social responsibility has different stances
according to the organizational viewpoint. This viewpoint will reflect how the organization will
be approaching such responsibilities. However, the stereotypical view of social responsibilities is
laissez faire, enlightened self-interest, Forum for stakeholder interaction and shaper of society.
Laissez faire viewpoint is that business should be making profit, pay taxes and provide jobs.
(Friedman et.al, 1970)32. Enlightened self interest viewpoint is to create long term financial
benefit to the shareholder as well managing a good relationship with the stakeholders (Macloed
et.al, 2001). A forum for stakeholder interaction viewpoint is to explicitly incorporate multiple
stakeholder interests rather than just shareholders as influence on organizational purpose and
strategies. Such organizations adopt principle of sustainability strategy one that ensures a better
quality of life by attending to all of three dimension of environment protection, social
responsibility and economic welfare (Hummeles,1988). Shaper of society viewpoint regards
economic consideration as a constraint or secondary importance. An organization with such
viewpoint has strategic purpose of ‘Changing the rules of the game’ through which they can
benefit but keeping the societal benefits as their top priority (Vogel et.al, 2005).

Acknowledging the contrasting drivers of CSR inside the company, and the disparate catalyst
determine the various initiatives, we find it naïve to assume and expect a company to somehow
braid all this together and assimilate it as part of business strategy. However, stances of social
responsibility provide a progressive more inclusive ‘list’ of stakeholder’s interest and greater
breadth of criteria against which strategies and performance will be judged. Social responsibility
stances provide the progressive way to craft CSR programs that resonates company’s business
value while addressing humanitarian, social and environmental challenges.

Sustainable public relation: Business engage in CSR because it’s a noble thing to do,
motivated by the logic that being the integral part of the society a corporation has to contribute to
the cause of community needs.13. for example, “grow up great” by PNC’s early ‘childhood
education programs’ and Goldman Sachs “10,000 women” initiative to support and train women
entrepreneurs in developing countries. Which is direct expression of their collective business
strategies (Ridurnolu et.al, 2009). Integrating the corporate budget for Social responsibility has
its perks to an organizational value in such way by creating a positive brand image and
increasing public relations with the people. For example, Microsoft’s past CEO “Bill Gates”
donated his 2/3rd of his income to the charity, forming an intangible Brand equity by increasing
brand awareness and improved social capital, which is later translated to business profits. which
can be either goal of an organization in the name of social responsibility, or to improve societal
and environmental aspect along with company’s finance or maybe a form of philanthropic act.
Definitely benefitting the Organizational outcomes. (marquis, et.al, 2009)

Achieve symbiotic goals: Marketing manager and operation manager often create a realm of
CSR where creating social and environmental benefits, while also increasing business
profitability and opportunity, by improving value chain of the upstream or downstream supply
chain furthermore, improving operational effectiveness (Ridumolu et.al, 2009). Example, Nike
creating a code of conduct governing, where employees should be compensated fairly, employee
should not be exposed to harmful or unhealthy environment as well as launching an initiative to
reduce its negative effect on environment of its value chain by changing material sourcing to
manufacturing, shipping and product delivery (Nike, Inc, 2011). Once Nike realized supply chain
issues, it launched a supply chain initiative that had a significant and industry leading impact
moreover motivated by its consceitedness rather than social conscience (smith, 1990).

Meeting the benchmark: Companies are obligated to satisfy its customers and shareholders
primarily but for the companies with negative brand equity might have hard time to match its
previous set of outcomes and results. Example, case of Ncell mobile carrier which frauded the
government by avoiding millions of taxes, creating an anti-social mass movement against using
its product which was much hyped by the social media. So, for companies who are culpable use
the form of social philanthropy to fend up potential reputational damage and rebuild its brand
equity.

A corporation can serve to a social or environmental purpose also benefitting the corporation.
The organization performing social responsibility forms its core competencies in the form of
brand equity, goodwill, market disruption, increase in profits and increase the shareholders trust.
Corporation’s employees and management can care about social responsibilities, while also
supporting and expressing company core business priorities no matter of the stances they have
for CSR.

References

Christopher Marquis, V. Kasturi Rangan and Alison Comings, “PNC Financial: Grow Up Great”
(Harvard Business School case 9-409-108, April 28, 2009).

D. Vogel, “Is there a market for virtue? The business case for corporate social responsibility”,
California Management Review, vol. 47, no. 4 (2005), pp. 19“45.

For a comprehensive examination of the influence of consumer boycotts on corporate behavior,

see “The Boycott Tactic” in Morality and the Market: Consumer Pressure for Corporate
Accountability (N. Craig Smith, 1990).

H. Hummels, “Organizing ethics: a stakeholder debate,” Journal of Business Ethics, vol. 17, no.
13 (1998), pp. 1403“1419.

N. Craig Smith, Sean Ansett and Lior Erez, “How Gap, Inc. Engaged with Its Stakeholders” MIT
Sloan Management Review (Summer 2011)
Nike, Inc., “Code of Conduct,” accessed July 13, 2011, http://www.nikebiz.com/responsibility/
documents/Nike_Code_of_Conduct.pdf.

Often quoted as a summary of Milton Friedman’s argu-ment is M. Friedman: ‘The social

responsibility of busi-ness is to increase its proity, New York Times Magazine, 13 September
(1970).

Ram Ridurnolu, C.K. Prhalad and M.R. Rangaswarni, “Why Sustainability is Now the Key
Driver of Innovation” Harvard Business Review (September 2009), 57-58.

see S. Macleod, ‘Why worry about CSR?’, Strategic Communication Management, Aug/Sept
(2001), pp. 8–9.

V. Kasturi Rangan and Lisa A. Chase, “Societal Enterprise and the Role of Large Corporations”
(Harvard Business School Working Paper, July 13, 2911).