Corporate Social Responsibility which is popularly abbreviated as “CSR”, can be defined as an initiative taken by a business organization to take responsibility for the effects of company’s operation on the society and environment as a whole. CSR is also referred to as “corporate citizenship”. When companies do CSR activity for the benefit of social well-being, then they can experience short-term costs which do not give them a financial gain, but instead, it promotes the company’s image for a positive change in society and environment.
Why must the organizations do CSR activities?
Companies may have many harmful effects on the environment. The changing climatic conditions can be attributed mainly to various manufacturing, chemical, mining and agricultural corporations. Organizations should take responsibility for these effects and must take actions to compensate by preserving the environment and society.
Different CSR activities which are practiced by the organizations
Many companies now are taking this initiative for saving the environment at their start-up stage only. The organizations can consider the following practices to become a helping hand to societal development.
- Companies in education industry can offer a free learning program to the underprivileged children.
- Many automobile organizations induce different skill development programs for those adults who could not complete their studies which can also be considered.
- The manufacturing and chemical based companies can get into a regular activity of planting trees, for saving the marine life or preserving the wildlife.
- Few organizations voice their opinion on women rights and their empowerment also.
- Many organizations provide free healthcare facilities and opportunities for sustainable livelihood
To the deprived people.
- Preservation of the aboriginal communities and their culture is also considered by some corporate houses, especially when they think that due to their operations and plants the indigenous people have suffered in some way.
- Few companies take initiatives for preserving the non-renewal resources like water, petroleum etc. by educating people about how to use them wisely.
- Many top corporations indulge themselves in helping people fighting with different diseases like AIDS and Cancer etc. They spread awareness about these conditions and also help many victims financially for their treatments.
Company X’s CSR practice:
Company X is a prestigious hotel chain, and the management wants to initiate a CSR activity for societal well-being. It can take the following steps for formulizing and execute an impactful CSR activity.
According to O’Riordan and Fair brass, (2008), there are two stages of applying CSR can be identified that are strategy development and strategy implementation
- Strategy Development: In this phase, the higher management of company X will formulize a policy by analyzing and recognizing the issue.
- Strategy Implementation: In this stage, the company will execute its detailed plans for the CSR practice.
The management theories for successful CSR practice:
According to Clark, (2000), a CSR practice should follow four steps for being successful:
- The organization should identify and recognize an issue (this can be connected with the detrimental effect on the environment due to company’s procedures)
- The company management has to formulize a strategy by carefully planning all the activities.
- The policy is developed along with delegating the responsibilities to different departments.
- The policy is implemented with careful execution.
CSR helps to increase the organizational sustainability:
CSR has a significant positive effect on the financial performance also. These social initiatives help the organizations build a positive brand image. According to Becker-Olsen et al., (2006) CSR acts as a link between company’s social initiative and improved financial performance.
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