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Increased competition among corporations and individuals fuels modern society. With the free movement of goods and services, globalization has improved the ability to exploit scarce resources on a global scale. Increased competition has had some negative consequences for society, prompting the government and businesses to take appropriate measures to protect the environment and ensure the availability of resources for future use. The term "corporate social responsibility" refers to the actions and activities that businesses take to integrate their markets' social and environmental concerns into interactions with various stakeholder needs. In a world where profit maximization is considered a winning strategy among shareholders, corporate social responsibility should go beyond obeying the law undertaken by entities to not only secure the interests of the larger community but also create a sustainable resource base for the respective companies.
The increasing interdependence between corporations and the society along with the growing population should be an issue of concern for companies seeking to maintain profitability in the long term. While the international and various government laws have been positioned to protect the environment and scarce resources, companies control a majority of resources that they to promote a favorable work environment. According to Lambooy (2014), companies owe it to its consumers, employees, and immediate surroundings to ensure that they have a sustainable environment and promote the continuity of the firm. While the legal concept of CSR is limited to protecting the environment and securing a favorable practice for employees, the companies are tasked with maintaining continuity and avoiding depletion resources including labor that would lead to their closure. The legal requirements protect the external resources while CSR policies should protect both internal and external aspects within the company.
In addition to the need to protect the company’s continuity, an elaborate corporate social responsibility program can serve in attaining the business benefits that drive up profits. Sarkis and Daou (2013), each company should preserve a favorable relationship with its various stakeholders including employees, community, public pressure groups, suppliers, and competitors effectively and ethically thus promoting its competitive advantage and fostering their ability to maximize profits. For example, a company that adheres strictly to set government policies such as the minimum wage for employees is less likely to attract a highly productive workforce compared to a company that exceeds the required minimum wage and offers additional employee incentives. In this scenario, a company’s CSR policy is directly related to its productivity levels and subsequently its profitability. Similar scenarios can explain businesses’ profitability based on their relationship with the community including offering programs such as environmental conservation, financial community aid programs, and participation in social activities such as sports.
In conclusion, corporate social responsibility should extend beyond the legal limitations serving as a guiding framework for organizational activities. Corporations should endeavor to make their businesses profitable and sustainable through the implementation of equitable social, economic, and ecological environments that fulfill all stakeholder concerns. The interdependence between corporations and their target market and the larger society can benefit significantly from a voluntary act of corporate social responsibility creating a highly conducive relationship both at the internal and external levels of operation. The voluntary perspective creates an enabling environment for external stakeholders and increases the profit margins that benefit the shareholders.
Lambooy, T. (2014). Legal aspects of corporate social responsibility. Utrecht Journal of International and European Law, 30(78), 1-6.
Sarkis, N., & Daou, L. (2013). “Giving back to the community, an obligation or an option today?”- Case of the educational sector in Lebanon. International Strategic Management Review, 1(1-2), 59-64.
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