Corporate Social Action in the 21st Century and Its Impacts and Benefits on Local and Global Communities
Many well known companies across the world have impacts on our lives every single day. Without knowing, we often interact with these institutions as customers, workers, or just as members in our overall economy. Many of our interactions are quite explicit as we can either personally experience them or they are made public through the media whether it be directly from the company, the news, or other media sources. However, many people still question whether or not companies have a positive or negative impact on their lives and oftentimes hope something can be done in this regard. This poses the important question of what can companies change about their practices to help society and their communities on a greater scale?
This brings up the concept of Corporate Social Responsibility. Corporate Social Responsibility, often shortened to CSR, is an important concept in not only the business world but in our general society. It helps guide how we interact and coexist with corporations in a way that is mutually healthy and allows for companies to thrive but also for their people as well as people in general to thrive and live better lives. Both the external and internal efforts of companies are vital for them to remain as a consistently growing and successful company that is well respected in the eyes of the government and the public. Internal efforts include workplace reforms and the treatment of employees. External efforts include charity work, community outreach, accountability, and transparency. All of these come together to form a company’s CSR strategy. Therefore, to help society and their communities, companies should change their practices so that they are more involved in the local areas they work and also are more invested in the quality of their workplace so that they can spread opportunities and prosperity.
Oftentimes, companies are focused on simply outputting goods to customers and profits to shareholders. However, outputting other assets may in fact be more beneficial to a company’s vision in the future. External CSR efforts can allow a company to thrive in the long-term in terms of growth, revenue, and eventually profit. However, many companies do not look at their practices in this lens and are very focused on short-term thinking as they look to present the best quarterly results they can. Oftentimes, and understandably so, companies are focused on maximizing their profits at every turn they get. Whether it be making cost cuts, or squeezing revenue out of every last resource and employee they have, companies go through great lengths to secure short term profits.
Obviously, the quest for profit is a good thing. It promotes innovation and it encourages companies and people to create and build so that we have a brighter future waiting for us. However, excessive focus on short term profits may be detrimental not only to an individual company, but also to the overall society in which the company operates within. Instead companies need to focus on their long-term goals for growth and how those may fit in within the existing societal and social structures we have. In Accountable the authors say: ““[w]e should build a financial system that grows corporations for the long term in ways that have a positive impact on society and the environment (168).” This quote demonstrates the importance of building companies and systems that are beneficial to the greater society for the long-term. Instead of just serving the needs and wants of people now, we can harness the market system to instead focus on the future and make sure that the future is brighter and more prosperous for the generations to come.
External CSR efforts can be shaped around a company’s long-term mission and current business models so instead of interrupting the work of a company, it builds around it and blends well with work of the business. In “The Truth About CSR” V. Kasturi Rangan explains that “It’s neither practical nor logical for all companies to engage in the same types of CSR, since CSR programs are driven by diverse factors including the industry and the societal environments in which businesses operate and the motivations of the people who staff, run, and govern each company.” This demonstrates that CSR efforts do not have to be very standardized across the board but instead can be unique and tailored to the unique needs of the communities that companies serve and the niches that each company chooses to specialize in. There are various examples of what types of measures companies can implement into their main systems of management and organization so that the functions that promote corporate responsibility are much more effective and efficient. The actions a company takes will and must vary based on the specifics of the firm such as its industry, its location, its size, and many other important and vital factors.
For example, a Sporting Goods company may not be the best sponsor to improve access to banking service however, a large financial institution could take on such an endeavor to improve access to banking services which serves not only the communities in need, but also helps the company grow in the long-term by widening and strengthening their consumer and customer base. The Sporting Goods store, however, could focus their interests on enhancing access to physical education and sports so that more students and people are able to be active and healthy. Through these actions, the company would be able to spread and encourage involvement in sports and physical activity, which helps clarify their overall vision and mission while also making a statement about them being a leader for enhancing opportunities in athletics. Most importantly of course, these efforts would mean that many people who are underprivileged will have access to services and goods that would have otherwise not been affordable or at access to them.
These examples demonstrate the importance of companies looking outward onto their current impacts on society and possible areas for them to make changes to help better the world around them while also enhancing their corporate goals. Taking account of these goals and interests and understanding the importance of short-term versus long-term thinking can provide companies with the opportunity to flourish for years to come while also positively impacting the communities they serve. Whether it be sponsoring charitable hackathons for students, an initiative of World Wide Technology, or assisting medical missions in foriegn countries, as was the case with Stryker, a medical products and technology company, companies can take on philanthropic and impactful CSR efforts that not only have lasting positive effects on the populations that they serve but also work to clarify and enhance the long-term msissio of their companies helping them reach those goals quicker and more effectively so that they can continue to innovate and make changes in the world around them.
Additionally, CSR efforts should not be limited just to the external facing fronts of a company. CSR efforts should also focus on transforming and changing the workplace so that it is more conducive and productive to creating change and value for the company, the employees, and the greater society. Internal CSR efforts range from helping change and shape corporate culture and attitudes to directly working on new programs aimed at improving the quality of life and working conditions of employees. Oftentimes, these measures tend to be to the strategic business advantage of companies because they allow for the employees to work in ways that are more productive as it creates an environment that is more conducive to collaboration and innovation.
Additionally, providing benefits to one’s employees also makes sure that employees are able to provide their full potential at the workplace. Oftentimes, issues and factors outside of the workplace can cause employees to be unable to give their full efforts at work. However, when the employer is able to provide resources that help solve or mitigate the issue, they can help make sure that their employees are in better shape to work and contribute positively to the work environment. Treating employees to positive experiences can not only help keep them productive and retain their talent, but it can also be used as a force to encourage new talents to join. Both of these ideas are key to a good internal CSR strategy. CSR strategy can consist of various initiatives including “treating employees to days off to explore nature, helping veterans climb the corporate ladder, or teaching children a world away to read.” (Egan, Nicole) This demonstrates the importance and ability of companies to use positive and constructive activities to harness and foster a workplace and company culture that can help bring out the best efforts of their employees and future employees as well. Giving opportunities to make it up the corporate ladder can help people find a sense of motivation so that they will work harder and be a better team player who contributes to the work around them.
In the fictional novel, The Circle, author David Eggers describes a company that shows full and thorough dedication to making sure that its employees are treated well. In the story, we are given an inside look between a fresh hire and one of her managers when she was presented with a situation where her father was in poor health and needed to be treated with medical care. While the fresh hire was initially very nervous and worried about the repercussions of this event, the manager made it clear that the company was dedicated to making sure that their employees did not feel that way. “Anything that makes our Circlers’ lives better …” She seemed to be waiting for Mae to finish the sentence. Mae had no idea. “… instantly becomes possible. You should know that!” (91) This shows how the company puts a high emphasis and value on the good of their employees and how they care about making sure that they can succeed. Instead of worrying about how the lack of an employee’s time will affect the company’s bottom-line, the company was very proactive about making sure to take actions that would help alleviate the situation for their employee so that they could feel taken care of and not have to worry about such issues. This goes to show how a company taking action in helping its employees can pay off by making them more happy to be at work and more likely to be able to work given the presence of external issues in their life.
According to Tejedo-Romero in “Transparency, Social Responsibility and Corporate Governance: Human Capital of Companies”, companies need to think about how their public image looks in the face of their CSR efforts so that they can better connect with the communities they serve and the population and world as a whole. A company making their efforts public allows individuals to better assess which businesses they support and by putting out this information companies can make sure their image to the public is also more positive. Additionally companies need to work to disclose how they function so people have a better understanding of the institutions around them. Human capital disclosure involves companies publicizing and presenting the workforce they lead through the lens of various factors including talents, diversity, work environment, innovation, employee retention, and multiple other factors relating to a company’s workforce (Tejedo).
All of this comes under the umbrella of proper and thorough corporate governance. “Corporate Governance of companies must provide the necessary means to increase the degree of transparency and the quality of information disclosed, in order to reflect the true image of a company’s assets (Tejedo).” This demonstrates how companies need to do a better job at disclosing their composition and choices so that they can demonstrate their commitment to becoming an institution that wants to promote good and positive change in society. Disclosures can be used as a way for companies to also publicize their choices to move away from negative business practices, such as those that harm the environment, to demonstrate to customers and fellow institutions that they are a leader for change and can be a company who is invested in the future.
Additionally, companies should also work to do a better job at clarifying their beliefs and targets for how they want to make a change and improve their world around them. These messages need to not only be directed towards the public but also towards their clients and the other companies they work with. Some business leaders have already worked towards this and made such statements. For example, “[o]n 16 January 2018 Larry Fink, the CEO of $6 trillion investment firm BlackRock Inc., made headline news by sending a letter to the world’s biggest corporations with the strong advice that they need to actively contribute to society rather than just focussing on profitability (Rhodes).” This is a clear and significant example of how companies are working to spread their message and make it clear what they believe in and what they want to see in the world around them.
Additionally, this example specifically made sure not only to clarify BlackRock’s expectations for themselves as an institution, but also demonstrated how they had expectations about the responsibility and the social efforts of the companies that they work for and work with. This is an excellent example of a company using their publicity and status to lead by example and promote social good. With this messaging and action, companies can lead themselves and their competitors to become focused on more than just profit and instead become aware of the world around them and the communities they serve and how their actions can have an impact on or effect on these communities. Instead of relying on a government body or a regulatory body to encourage more companies and firms to take action, companies who are already engaging in CSR work need to be more vocal about encouraging their partner and peer firms to also commit to making sure that their work has the face of social good work and long-term thinking.
Companies need to be aggressive about making sure that these efforts are known across the industry and across the general society. We see news about the stock market, the labor market, regulatory actions, congressional bills regarding Wall Street and the economy, and news about corporate scandals and misdoings. However, we rarely see news on the positive steps companies are taking to improve communities and society. This therefore strengthens the argument of how we need to do a better job at highlighting these positive actions so that more companies will be cnoruagemented to take on such ventures and projects to increase their impact to the overall social good of their communities and the overall society.
Overall, we see how important and impactful disclosures and public image can be to a company and to consumers and the greater society. Disclosures and better publicity regarding the workings and commitments of a company can help a company grow into more communities and further their outreach from both a social impact strategy perspective as well as a business strategy perspective. If a company can enter and be welcomed into more communities, they will have the ability to bring prosperity with them whether it be in terms of bringing jobs and employment or other efforts such as charitable giving, volunteer work, and helping build and revitalize the infrastructure of struggling communities.
Although my paper only covered the work that companies and businesses will need to do, the work is more involved and requires the efforts of every sector of our society. According to José Carlos Marques and Henry Mintzberg in the “Why Corporate Social Responsibility Isn’t a Piece of Cake” from the MIT Sloan Management Review, “Reform will only happen when governments, businesses, NGOs and other associations of the plural sector join forces.” This demonstrates how the mission of enhancing and bringing CSR efforts across our entire global economy is a very difficult and arduous challenge. This emphasizes how important it is for CSR to be a goal that is sought after and worked on by more than just companies or just the government, but instead all parts of our society.
Bringing together companies are sectors of our global economy and political atmosphere is an extremely difficult endeavor but working towards such a goal is definitely possible and definitely doable. To reach that point, we all need to work to be more collaborative when it comes to working on solutions to these complex, multifaceted, and multi-dimensional issues. The effort to make companies socially responsible and in a position where they can positively contribute to their communities as well the general society falls on not only the companies but also the government, social organizations and nonprofits, and people themselves who are in the positions of employees, consumers, clients, and partners with many of these firms.
It appears clear that Corporate Social Responsibility efforts can provide significant benefits not only to companies, but also the general society which they serve. Instead of keeping their activities limited to business ventures that provide short term profits, they should look into ventures that provide social value, and opportunities for long-term growth and expansion. Social value can come in various forms but can be encompassed by the description of how companies manage to integrate and involve themselves within communities and also be conscious of their actions and impacts on the general society. Whether it be taking steps to fund programs that help local students attain a better quality of education or optimizing their regular business practices to better serve and protect the environment, all of these fall under the values of being socially conscious as a business.
Through my research, I am confident that I was able to bring out a range of ideas and perspectives on the topic of CSR so that it can be used in a constructive way that builds solutions that can be applied and accepted by a broad and diverse array of people, companies, and leaders. These are all important topics that need to be further researched in depth and must also be applied properly so that they can have the greatest impacts.
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