Management Theory Of Corporate Social - Myassignmenthelp.Com

Question: Discuss about the Management Theory Of Corporate Social. Answer: Introduction: The importance of Corporate Social Responsibility in determining the sustainability of a company cannot be overrated. The idea behind implementing CSR activities, is that a business organization cannot be guided by profit motive only, and rather it should choose to conduct business in a responsible way, so that it does not harm the interest of any of the stakeholders (employees, shareholders or consumers), nor does it harm the interest of the community, it is serving. Thus, it is expected that an organization should carefully evaluate the impact of its business activities on the stakeholders, communities as well as the environment, it is conducting business in. While in some countries, the engagement o a company in CSR activities in an integral legal requirement for conducting business there, in case of CSR, the obligation is expected to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees as well as for the local community and society at large (Tai Chuang, 2014). The engagement of an organization in moral, ethical and philanthropic activities has become an important part of the business strategy of many organizations, and this is exactly the reason why most of the companies issue a CSR report, that offers an elaborate idea of the companys social, non-financial activities. This report intends to carefully analyse the importance of CSR practice in an organization, how reputed Australian organizations like Woolworths implement and benefit from CSR activities, and finally to evaluate the various perspectives of the stakeholders regarding the incorporation of CSR activities in business. Discussion: CSR Efforts of Woolworths: Founded in the year of 1924, Woolworths has emerged to become one of the most recognized Australian companies with extended interest in retail trade in Australia and New Zealand. Apart from the implementation of effective business strategies, Woolworths has been able to sustain its brand recognition, because of its increased engagement in CSR efforts. The management authority of the company has always been aware that its organizational success cannot be measured only in terms of profitability and growth, but it is to be gauged in terms of the well-being it brings in the society. The company has incorporated CSR activities as part of an important business action, and has eve announced the recent Corporate Social Responsibility Strategy 2020, that announced the companys decision to implement 20 sustainability goals that it intends to accomplish by the end of 2020 (Devin Richards, 2016). CSR Efforts to Ensure Environmental Sustainability: One of the most important aspects of its CSR strategy is its collaboration with the suppliers, service providers as well as operations, so as to innovate sustainability plans to ensure a healthy planet. Accordingly, the company has already stopped offering its customers free plastic bags, so as to stop contamination of the environment by the non-biodegradable substances. On the contrary, the consumers have been advised to bring in their own carry bags, or they can buy more durable bags at 15 cents per piece from the retail stores of Woolworths only (Santos et al., 2013). Further, the company has also funded its own awareness raising campaigns to make the consumers aware of the importance of quitting plastic bags, and looking for alternatives. The company has also invested to reduce the food wastes going to the landfill, and has even reduced its carbon emission by 10% (Klettner et al.,2014). CSR Efforts to Improve Community Well-being: It is important for organizations to integrate societal impacts of business on the members of certain communities in its business plans, and address vital issues such as poverty and unemployment infesting the community. Since the last sixteen years, Woolworths has been engaged in community services in Australia. The company regularly donates a lump sum amount of money to Foodbank, an organization that utilizes the grant received, for providing hunger relief to the impoverished Australians. In order to contribute to the spread of educational opportunities in the backward communities, the company has also introduced MySchool Fund Raising Programs, and Making the Difference Educational Program for uplifting educational opportunities amongst the young children of the disadvantaged communities of Australia (Balmer et al., 2016). Most importantly, in order to ensure food security, the company has established a system of diverting surplus food from the Woolworths stores from going to waste. The company donates this surplus food to needy communities with the help of structured charity organizations. CSR Efforts to Ensure Employee Well-being: The employees, the human resources of an organization, are the real assets of any organization and hence promoting their well-being is an important aspect of the CSR strategy as well. As the second largest private employer of Australia, the company ensures 100% workplace diversity. Accordingly, it not only hires old and disabled people (18,000 employees above the age of 55 years), and offers them relevant training, but has also appointed as many as 78, 848 young employees below the age of 25 years (Smith, 2014). At the same time, the company has appointed 33% of its female workforce in managerial and executive roles within the organization (Smith, 2014). Lastly, the company not only hires the employees belonging to indigenous communities, but also in the year of 2015 Woolworths has also supported two indigenous suppliers: Young Guns Container Crew, a Labour hire company and Message Stick communications, so as to extend help to them, and make them more self-sufficient (Santos et al., 2014). CSR and Stakeholder Interest Conflicts: Edward Freeman was one of the first persons to create an awareness regarding the idea of stakeholder interest, with the help of his Stakeholder Theory. According to Freeman, the stakeholder of any company possesses financial or non-financial ownership and while the material stakes can claim includes stock dividends or salary, while non-financial stakes may include the right of a consumer or a community member to enjoy access to clean water and air. It is the responsibility of each organization to create wealth in all forms for its stakeholders. Accordingly, the business ethics theory claims that the cumulative result of corporate performance over time, that may include all the assets, revenue and competencies of the firm, should be directed to the interests and issues of a wider set of stakeholders, such as the employees, consumers and community members (Jo et al., 2016). This in turn, does help in maximizing the intangible assets such as employer-employee or company-consumer relatio nships, goodwill and brand reputation, trust as well as opportunities for innovation. Considering the possibility of long-term sustenance, the management authority of Woolworths has been focusing on CSR efforts since a long time. Accordingly, the companys CSR performance (as described in the diagram below) is comparatively better than many organizations though there are still chances for improvement in areas such as community development initiatives: Figure 1: CSR Rating of Woolworths Source: (Methner et al., 2015) However, the very fact that an organization has multiple stakeholders is the reason why at times the stakeholder perspectives about a companys CSR efforts are at variance or even in long-term conflict with the CSR strategies of the organization. Often large and recognized companies such as Woolworths invest lump sum amount of money in CSR activities, simply because its internal stakeholders such as the corporate managers, directors or employees are expected to benefit from the huge CSR expenditure. Huge investment in CSR activities helps in enhancing the reputation of a company and improving its CSR score, which in turn improve the brand recognition of the firm, thereby ultimately benefitting the companys internal stakeholders. However, although a huge CSR expenditure easily benefits the internal stakeholders, the non-affiliated shareholders may not approve of the expenditure, as it may reduce the firms value. Thus, this often creates stakeholder conflict as well. It should be rememb ered that CSR is not just an initiative that an organization undertakes to improve social, community well-being and ecological balance, but it is essentially an integral part of the business strategy. Thus, if the stakeholders hold mutually contradictory attitudes towards a CSR initiative, the company may not be able to benefit from the implementation of CSR activities (Coopers, 2017). The organization will fail to accommodate these kinds of self-defeating contradictions in perspectives. Often organizations need to address issues that are of vital interest to the society, and yet end up being viewed negatively in the public eye, because of the erroneous perception of the organization. For example, 80% of the total spending by organizations on community issues go for charitable organizations spending the money on so called neglected diseases, such as HIV AIDS and Tuberculosis. However, as per the reports by WHO, these account for only a 10% of the diseases, in the entire world, and m uch awareness needs to be spread against the tendency to over-consume green products, that can lead to exacerbation of current environmental problems (Kotler Maon, 2016). However, if an organization invests a huge amount of money in spreading awareness against the over-consumption of green products, the consumers may not value and attach much importance to the CSR effort of the organization, due to sheer ignorance of the public. Conclusion: CSR is highly important in todays world, as it is mutually beneficial. While an organization is not any longer driven only by the profit motive, and actively contributes to promote the well-being of the stakeholders, the stakeholders are aware that the organizations have become morally aware and their duties are beyond the provision of goods and services. CSR score helps in improving the brand recognition of the company, offering it competitive advantage over the rival firms. Hence, in case any form of stakeholder conflict arises, during the implementation phase of the CSR strategy, the company needs to adopt either the CSR Pull strategy or the CSR Push strategy. In case of the CSR Pull strategy, the company has no a priori position of its own, and hence it must adapt its strategy matching the expectations of the stakeholders. 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