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Corporate responsibility



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A company’s obligations to society outside of its financial success are referred to as corporate responsibility, also known as corporate social responsibility. Corporate responsibility covers a wide range of topics, including as philanthropy, human rights, ethical labor practices, and environmental management. Corporate responsibility is becoming a higher priority for organizations as stakeholders and customers call for more openness and accountability from corporations. Companies are supposed to operate responsibly in a way that helps the environment, society, and all stakeholders in addition to making profits. Gilbert Lenssen, Francesco Perrini, Antonio Tencati, and Peter Lacy’s book “Corporate Responsibility and Strategic Management” offers insights on the idea of corporate responsibility and its significance in strategic management. This essay will explore the concept of corporate responsibility and why it is important, as well as the importance of transparency.

Companies have an ethical obligation to act in a socially responsible manner, according to the authors of the book “Ethical Decision Making for Business,” Fraedrich and Ferrell. The authors present a framework for making moral decisions that takes into account all the parties impacted by a company’s decisions, including its employees, clients, suppliers, shareholders, and the general public.

Ethical labor practices are a further aspect of corporate responsibility emphasized by Fraedrich, Ferrell, and Ferrell. Companies have an obligation to treat workers fairly and offer a safe workplace. This involves providing a safe and healthy working environment, paying employees a living wage, and giving benefits like healthcare and retirement programs. According to the authors, businesses must make sure that child labor and forced labor are not used in any form in their supply chains.

The importance of corporate responsibility

For a number of reasons, corporate responsibility is crucial. It provides initial help in developing stakeholder reputation and trust. Companies may improve their brand, draw in and keep customers, and boost employee loyalty by conducting themselves in an ethical and responsible manner. Increased profitability and long-term success may follow from this.

Second, corporate responsibility may boost productivity and reduce costs. Companies can save money on energy and materials, lessen their carbon footprint, and improve their competitiveness in the market by implementing sustainable practices and minimizing waste.

Third, corporate responsibility may increase creativity and create new business opportunities. Companies may develop new products and services that suit customer and societal demands, generate new revenue streams, and strengthen their brand by recognizing and dealing with social and environmental concerns.

Another significant aspect of corporate responsibility is human rights. Companies have a duty to protect and promote human rights, inside the company and throughout their supply networks. This involves making sure that workers are not the target of harassment or discrimination because of their color, gender, or sexual orientation. Additionally, businesses should take action to prevent their products from being used to support violations of human rights, for as by avoiding suppliers who participate in such behavior.

Another essential aspect of business responsibility is philanthropy. Companies have a duty to reduce their negative impact on people and the environment, but they also have the chance to improve society through charitable activities. This can involve financial contributions to charities and nonprofits, employee volunteerism, and the creation of environmentally friendly goods and services which help the society as a whole.

Corporate responsibility can also aid businesses in finding and keeping outstanding staff. Today’s workforce is increasingly interested in working for organizations that emphasize social responsibility and share their beliefs. Companies may create a healthy work atmosphere and attract people who are dedicated to having a positive impact on society by prioritizing corporate responsibility.

Corporate responsibility can assist businesses in following the rules and avoiding legal problems. There are laws in many nations requiring businesses to follow particular labor and environmental standards. Companies that prioritize corporate responsibility are making sure they comply with these laws, stay out of trouble with the law and keep their good name as responsible businesses while also avoiding fines and legal consequences.

Corporate social responsibility must include transparency. Companies can increase trust among their stakeholders by being open and honest about their processes and policies. This may result in more devoted clients, a better reputation, and ultimately more profits.

How can the connection between customers and businesses be improved by being upfront about corporate responsibility?  Customers are more likely to trust a company when it is upfront about its methods and rules. Customers who trust a business are more inclined to do business with them again and to refer others to that business. Increased sales and profitability for the business may result from this.

Additionally, a company’s reputation can be improved by being open about its corporate responsibility. Customers and other stakeholders are calling for corporations to be more open and accountable. Companies may show their dedication to corporate responsibility and gain the trust of customers and stakeholders by being open and honest about their practices and policies. This could ultimately boost revenue by drawing in more clients and staff.

In summary, corporate responsibility is a crucial factor in current company practices. Companies can improve their reputations, expand their commercial opportunities, and build trust with their stakeholders by conducting themselves in an ethical, open, and accountable manner. Publishing corporate responsibility reports, interacting with stakeholders and customers, using social media, and putting third-party verification into place are all ways that businesses can be more open. Companies may enhance their reputation, promote client loyalty, and ultimately boost profitability by being open. By ensuring that CSR is integrated into every aspect of the company, from operations to marketing and finance, strategic management may give businesses an edge over their competitors.

Sources

G lenssen, F Perrini, A Tencati, P Lacy. 2007. Corporate Responsibility and Strategic Management

Fraedrich, John (+ Ferrell, O. C.  Ferrell, Linda.): Ethical decision making for business (8th ed. South-Western,2011.)

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