Business organisations function with a motive to earn more profits and market share without sharing any returns or benefits with society. If this aspect is inculcated in strategies by companies, then such business practises are considered as corporate social responsibility. Corporate image of a company is developed according to the response provided by different stakeholder groups. Often company heads perceive that there is no big difference made on the performance if CSR is adopted (Muller, 2014). They consider it as a draining situation in which benefits are shared and profits are decreased at the owners' and shareholder's end. Despite of this fact, there are some CEOs and Boards that have been leading their firms with incorporation of corporate social responsibility.
This essay presents the characteristics of CEOs and Boards who lead socially more responsible companies. The analytical views concerning this issue will be presented ahead which shall help in developing an understanding whether majority of business organisations can lead the markets with CSR approach (Servaes and Tamayo, 2013). Furthermore, there are some theoretical concepts which figured out to enhance the understanding. These include agency theory, stewardship theory and stakeholder theory. Companies like Thomas Cook Group, EE Limited, ASDA have been working with an objective to develop their approaches and strategies with an orientation to achieve sustainability. The reason behind this strategic thinking is growing environmental concerns and increasing ecological disturbances.
Every action and decision taken by business organisation has some sort of effect on the environment and society (Hopkins, 2016). The nature of impact helps in determining whether the action was beneficial or not. In the long run every organisation, irrespective of their working style should adapt to corporate social responsibility principles and dedicate some resources for upliftment of society (Christensen, Mackey and Whetten, 2014). A literature review regarding above stated fact and other analytical findings has been presented in this essay. It will help in strengthening the thought process regarding characteristic features of CSR.
Critical analysis of CSR
When a company seeks resources from the society for personal benefits and profits, then it becomes an unsaid responsibility of the particular organisation to return back these resources in some form or the other (Saeidi and et. al., 2015). This is the basic essence of corporate social responsibility. The CEO of Thomas Cook had developed CSR strategies in company's current functioning because he wanted to set an example for other organisations of this industry to work for the betterment of nature and society. Travel and tourism is all about the ecological beauty of the respective destinations (Mousavi and et. al., 2013). But this beauty is being damaged by unethical practises like littering waste or hurting culture and traditions of the local markets. Thomas Cook Group has developed strict guidelines for its customers which need to be followed.
This serious efforts for conserving the ecological balance has helped the enterprise to gain positive corporate image and customer share (Dam and Scholtens, 2015). Moreover, individual perception towards this organisation has changed. Social awareness and sense of responsibility is one important characteristic feature of CEOs who lead companies towards CSR. They do not neglect the harsh realities that come along side business activities. For instance, product manufacturing units especially the ones where plastic or chemicals are involved might be emitting dangerous effluents which are contributing to global warming and green house effects. In such cases, if CEOs consider their responsibility of modifying production methods then they are leading with CSR.
Apart from environmental impact, society is another aspect which is to be considered as a part of CSR. Businesses with philanthropic approach have genuine CEOs and Boards behind their leading back (Cavico, 2013). Pedigree the leading company for producing dog food is not only focused on its products but has developed a unique approach towards welfare of society. The organisation funds and sponsors national adoption drives which run for homeless dogs. About 1000 shelters and breed rescue operations have been conducted by the company. This implies, organisation holds a strategic CSR approach towards the society. On the contrary, the Boards of Body Shop developed a unique CSR strategy that focuses on animal rights, environment protection and builds self-esteem for those deprived of human rights.
Such activities in the business processing can be initiated only when leaders are concerned regarding the subjects. If a company doesn't care to make any efforts regarding society welfare, then there will not be as such any deep impact over its functioning (Moon, 2014). CSR is a technique through which brand value is enhanced. In countries were factors like poverty or ecological disturbances are prominent, business organisations must consider developing strategies which shall help in improving the status of individuals in the society.
CEOs and Board members are considered significant for incorporating corporate social responsibility in their governing structure because they are mainly the decision makers for every situation of the organisation. This implies the level of authority or power with these people is quite high. There is a probability that company might enhance its strategic position if they are led towards sustainability. The major characteristic trait that influence CEOs for making decisions with regards to welfare of society is ability to visualise or establish a vision. This vision or aim is just not limited to business operations but extended to external environment and the markets and society where operations are taking place. Hence, it is important for organisations to recruit leaders who are competent and thoughtful towards developing a better place in terms of both businesses and the society as a whole (Strandberg, 2015). It shall not only help in enhancing brand value but will also encourage economic growth of operational country.
- Muller, A. (2014). Corporate social responsibility. Wiley Encyclopedia of Management.
- Servaes, H., & Tamayo, A. (2013). The impact of corporate social responsibility on firm value: The role of customer awareness. Management Science. 59(5). 1045-1061.
- Hopkins, M. (2016). The planetary bargain: corporate social responsibility comes of age. Springer.
- Christensen, L. J., Mackey, A., & Whetten, D. (2014). Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of Management Perspectives. 28(2). 164-178.
- Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research. 68(2). 341-350.
- Mousavi, Z. & et. al. (2013). Corporate Social Responsibility. Life Sci J. 10(6s). 8-10.
- Dam, L., & Scholtens, B. (2015). Toward a theory of responsible investing: On the economic foundations of corporate social responsibility. Resource and Energy Economics. 41. 103-121.
- Cavico, F. J. (2013). Corporate Social Responsibility. ILEAD Academy.
- Moon, J. (2014). Corporate social responsibility: A very short introduction. OUP Oxford.