Objectives of Corporate Responsibility
The objective of Corporate responsibility is a part of business approach that primarily helps a business organization to establish their brand in the global market with the help of maintaining some of the major corporate ethics and responsibilities. People belonging to different geographical market cannot be aware of the products and service process of an organization (Dhaliwal et al. 2012). Therefore, in order to grab the attention of people belonging to different geographical market corporate responsibility can be considered as one of the most effective business strategy and policy. The primary goal of corporate responsibility approach is constituted with two factors. On one hand, the organization like Red Cross gets the scope to achieve the recognition of their brands and products. On the other hand, the business organization helps to resolve the emerging social problems in order to maintain balance within the society (Lee & Park, 2013). In general, However, the primary objectives of CR approaches are as follows:
- To gain the organizational reputation in the international market by spreading their hands towards the development of society
- To educate the society so that the people can get the right path for their further progress
- To provide some of the major recommendations on how the society can be developed by taking some of the most effective measures
Aguinis & Glavas (2012) argued that the policies and strategies towards Corporate Social Responsibility could be beneficial for different stakeholders only when the steps towards CSR are sustainable in nature. It can happen when organizations do not compromise on their profitability for sustainability. The CSR pyramid for the organizations in contemporary business environment can be shown as:
The specific arguments for and against CSR activities can be discussed as:
Brammer & Jackson (2012) argued that organizations should practice CSR for ethical considerations. In order to run the business process in the market every organization must follow a proper ethics, values and beliefs. People belonging to different geographical boundaries tend to face the CSR issue like child labor, pollution, etc. Therefore, it can be said that the emphasis towards the ethical considerations is one of the biggest arguments in favor of CSR. Another argument in favor of CSR is that it helps to protect the interests of stakeholders. Labor force is united into unions which demand protection of their rights from business enterprises. To get the support of workers, it has become necessary for organizations to discharge responsibility towards their employees.
The CSR Pyramid
Mirvis (2012) argued that the focus on CSR activities enables organizations to survive long term in the industry. The forces of CSR can be considered as the dynamic forces that helps organizational leaders to develop positive rapport with consumers. It is also believed that the focus on CSR can actually motivate employees to work to achieve the business goals. In order to enhance the performance level of employees the business leaders of organization tends to follow some of the major values in order to get quality service from the employees. Value creation is the business strategy and policy with the help of which the performance level of the employees can be enhanced. This particular strategy motivates the employees towards reaching the business goal (Bank 2012). As per the value creation strategy of organizations, it is undeniable that employees play a major role in rendering the performance of an organization. Therefore, employees motivation is one of the most effective factors based on which employees can be encouraged towards the business process (Hopkins 2012). Employees of organizations get incentives and other rewards and recognitions while providing good services towards the business organizations. On one hand, the organization is getting benefited. On the other, employees receive immense courage for performing well towards the business process.
Lee & Cho (2015) argued that the focus on CSR is important for organizations as it helps them to avoid any government or legal issues. In some countries, government demands that organizations should comply to certain legal guidelines. The policies of CSR help organizations to position themselves as responsible corporations. It is believed that the customers and the consumers want to associate with the organizations that are socially responsible.
Berg & Sheehan (2014) argued that business is an economic activity and CSR is a social activity. Both of these activities should be practiced but individually. There is no point in mixing these activities. There are chances that the organization would not be able to achieve their economic goals if they focus more on social goals. It is argued by the opponents of social responsibility that basic function of a business enterprise is to look into economic viability of its operations. It is for the government to look after interests of the society. Another argument against CSR activities is the cost aspect. The efforts on CSR activities demands investment from the side of organization. Therefore, it is important that organizations should take a call. Any investment on CSR activities should be justifiable and it should not eat into the profitability of the company. There is always a possibility that all the internal stakeholders of the organization may not want to compromise on their profitability or income and contribute to society. Therefore, it does not make sense to make CSR as a mandatory policy in the organization. Andersen & Nielsen (2017) argued that CSR should be practiced as an optimal practice within organizations. It is important that the leaders should not force the ideas to internal and external stakeholders.
Arguments for CSR activities
PepsiCo has been labeled as the most successful beverage and snack Food Company in the world. It started out in the year 1965 and since then such has been its growth that in the present scenario it is available around 200 countries. It strives hard in creating diversified food and beverage products manufactured to pacify the taste of their consumers. This is an American multinational beverage corporation having its headquarters in New York. Some of its best known brands are Pepsi-Cola, Diet Pepsi, Frito-Lays products, Ruffles potato chips, Lays’ potato chips and Rold Gold pretzels. PepsiCo expanded more with the acquisition of Tropicana in the year 1998 and merging with Quaker Oats in 2001. The company has got its existence in over 200 countries and its global presence makes it way more important in contributing something back to the society. It has been doing its bit in creating a positive impact on the environment and community at large. It has been helping out farmers and other people in the community in reducing waste and preserve water more for purpose such as irrigation. It has also involved itself in school matters where it is working on developing the future of younger generation towards a brighter future.
PepsiCo has also been investing heavily through its PepsiCo Foundation with the belief of positive community change can only happen with strong partnerships. The PepsiCo Foundation works well with some of the significant partners in matters related to school wellbeing and wellness pitch. Its $1.25 million Foundation grant enlarging valuable relationships of Quaker and Frito Lays establishing GENYOUth Foundation. PepsiCo School is mostly for focusing on the development of endowed and competent human resources, a voluntary corporate accountability that cropped up from the idea and wish of the employees of PepsiCo.
PepsiCo has been fighting hard to give back something to the society and much of their success depends on the well-being of their consumers. This is the reason why PepsiCo is working hard in establishing a healthier lifestyle customary. PepsiCo has been driving innovation through their proceedings, systems and progression to restrict their costs and the impact of environment like effective use of energy, solid treatment of waste, recycling and packaging materials (Lopatta, Buchholz and Kaspereit 2016). Their self-commitment towards the environment is immense.
Conclusion
The above essay discusses the pros and cons of corporate social responsibility. With the above discussion, it can be said that organizations should focus on CSR but not at the cost of their profitability. It can be said that the advantages of CSR are more than the disadvantages. Moreover, the disadvantages can be worked upon with an integrated effort from different stakeholders. Therefore, it is suggested that organizations should have dedicated CSR policies in place. It is also important that the organization should take the support of both internal and external stakeholders before developing and implementing any CSR policy.
References
Aguinis, H. and Glavas, A., 2012. What we know and don’t know about corporate social responsibility a review and research agenda. Journal of management, 38(4), pp.932-968.
Andersen, S.E., Nielsen, A.E. and Høvring, C.M., 2017. Communicative Dilemmas of CSR: Towards an Integrative Framework of CSR Communication. In Handbook of Integrated CSR Communication (pp. 51-69). Springer International Publishing.
Brammer, S., Jackson, G. and Matten, D., 2012. Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-economic review, 10(1), pp.3-28.
Berg, K.T. and Sheehan, K.B., 2014. Social media as a CSR communication channel: The current state of practice.
Dhaliwal, D.S., Radhakrishnan, S., Tsang, A. and Yang, Y.G., 2012. Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The Accounting Review, 87(3), pp.723-759.
Lee, E.M., Park, S.Y. and Lee, H.J., 2013. Employee perception of CSR activities: Its antecedents and consequences. Journal of business research, 66(10), pp.1716-1724.
Lee, G., Cho, S.Y., Arthurs, J.D. and Lee, E.K., 2015, January. Keeping up the Fame: Celebrity CEOs’ Engagement in Earnings Management and CSR activities. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 14117). Academy of Management.
Lopatta, K., Buchholz, F. and Kaspereit, T., 2016. Asymmetric information and corporate social responsibility. Business & Society, 55(3), pp.458-488.
Mirvis, P.H., 2012. Corporate Social Responsibility. The Encyclopedia of Human Resource Management: Short Entries, pp.153-159.
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