Corporate Social Responsibility

-it also called corporate responsibility, corporate citizenship, responsible business

-refers to the strategies corporations of firms conduct their business in a way that is
ethical, society friendly and beneficial to community terms of development.

Corporate Social Responsibility can be explained as:

*Corporate - organized business

*Social - everything dealing with people
*Responsibility - accountability between the two

The practice of CSR is subject to much debate and criticism.Proponents argue that there
is a strong business case for CSR, in that corporations benefit in multiple ways by operating
with a perspective broader and longer than their own immediate, short-term profits. Critics
argue that CSR distracts from the fundamental economic role of businesses; other argue that
it is nothing more than superficial window-dressing; still others argue that it is an attempt to
pre-empt the role of governments as a watchdog over powerful multinational corporations.

Business Benefits of CSR

The scale and nature of the benefits of CSR for an organization can vary
depending on the nature of the enterprise, and are difficult to quantify, through there is a
large body of literature exhorting business to adopt measures beyond financial ones. Orlizty,
Schmidt, and Rynes (in CSR network) found a correlation between social/environment
performance and financial performance.

However, businesses may not be looking at short-run financial returns when

developing their CSR strategy

The definition of CSR used within an organization can vary from the strict
“stakeholder impacts” definition used by many CSR advocates and will often include
charitable efforts and volunteering. CSR may be based within the human resources business
development or public relations departments of an organization, or may be given separate
unit reporting to the CEO or in some cases directly to the board. Some companies may
implement CSR-type values without a clearly defined team or programme.
 The business care for CSR within a company will likely rest on one or more of these
arguments:

 Human Resources
 Risk Management
 Brand Differentiation
 Licence to Operate
 Critical Analysis
 Disputed Business Motives
 Self-interest

Other views from this perspective include:

* Corporations really care little for the welfare of workers or the environment, and given the
opportunity will move production to sweatshops in less well-regulated countries.

* Companies do not pay the full costs of their impacts. For examples, the costs of cleaning pollution
often fall on society in general. As a result profits of corporations are enhanced at the expense of social
or ecological waste.

Hindrance of Free Trade

These critics are generally supporters of Milton Friedman, who argued a corporation's principal
purpose is to maximize returns to its shareholders, while obeying the laws of the countries within
which it works. Friedman argued that only people can have responsibilities. Because of this, moderate
critics suggest that CSR activity is most effective in achieving social or environment outcomes when
there is a direct link to profit. This approach to CSR requires that the resources could generate if
applied anywhere else. This analysis drastically narrows the possible scope of CSR activities.

Critics who believed that CSR runs against capitalism would go further and sat that improvements
in health, longevity or infant mortality have been created by economic growth attributed to free
enterprise. Investment in less developed countries contributes to the welfare of those societies, not with
standing that these countries have fewer protections in place for workers. Failure to invest in these
countries decreases the opportunity to increase social welfare.