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Q :-What Is Corporate Social Responsibility?

Corporate social responsibility is a term that has come to mean whatever a company does to give back to the community in which it has a presence. Sometimes this involves grants, volunteerism or sponsorships. Other times, a company will choose to demonstrate its corporate social responsibility by a commitment to clean energy or some other laudable effort or cause.

Q :- What Are the Functions of Corporate Social Responsibility?

1.Ethical Function
Ethics are one of the most important aspects in corporate governance and therefore have an important function in corporate social responsibility. A company must have internal controls regarding the expected ethical behavior and consequences of unethical business practices of its top executives and employees. Behaving ethically makes the company as a whole accountable to its investors, shareholders and consumers. The ethical function of corporate social responsibility helps to prevent conflicts of interest between earning corporate profits and maintaining the integrity of the company and the goods and services it produces.

2.Legal Function
The legal function of corporate social responsibility is to encourage transparency in a company's business practices and financial reporting. Maintaining high levels of legal business practices, such as adhering to Occupational Safety and Health Administration, or OSHA, regulations promotes goodwill toward employees. Maintaining high levels of legal financial practices maintains good will among investors, stakeholders and government financial-reporting regulatory agencies such as the Securities and Exchange Commission, or SEC.

3. Societal Function
The societal function of corporate social responsibility is to respect and invest in the communities in which the company operates. Companies are aware of how the production of their products affects the local community. These companies take necessary actions to diminish the negative impacts of factors such as increased traffic, noise and pollution for the communities in which they operate. The societal function of corporate social responsibility also includes companies reinvesting in the communities in which they operate, such as donating money to local charities.

4. Ecological Function
The ecological function of corporate social responsibility is to not only respect the immediate environment in which the company operates but also to respect the company's effect on the global environment. Companies are aware of the environmental impact the production of their products have on their local communities. In corporate social responsibility, these companies adhere to strict standards in an effort to diminish the negative impact of the environmental

byproducts such as air and water pollution from the production of their products. Having such standards impacts both the local and global environments.

Q:- Four Types of Corporate Social Responsibility

Environmental Responsibility
People expect businesses to exhibit environmentally responsible behavior, as evidenced by a PricewaterhouseCoopers survey that found that the No. 1 issue for companies in the future, according to U.S. respondents, is carbon emissions reductions. Specific environmental issues that affect businesses include global warming, sustainable resources and pollution. Businesses are being urged by environmental groups and governments to reduce their carbon footprint, to obtain their materials from sustainable sources and to reduce their pollution.

2. Human Rights Responsibility

The 21st-century marketplace is highly global. This means that when a product is purchased in the United States, for example, it may have been produced in China, or have components from South America. The ethical issue for corporations is ensuring that human rights are respected throughout all levels of the supply chain. Major companies have received criticism for their use of sweat shops and for sourcing resources that are harvested by unfairly treated workers. This has lead to a push for the use of strict labor standards to be applied to suppliers, and a demand for fair trade products such as chocolate and coffee.

3. Financial Responsibility
Financial responsibility is an important issue in corporate social responsibility. In the wake of the accounting fraud perpetrated by Enron and Arthur Andersen and Ponzi schemes orchestrated by the likes of Bernie Madoff, businesses are questioned about the accuracy of their financial reporting by increasingly skeptical shareholders and government officials, as evidenced by the Sarbanes-Oxley Act. Employees are expected to act as whistle blowers in such situations, and white collar crime is seeing high-profile prosecutions like that of Martha Stewart or former Worldcom CEO Bernie Ebbers.

4. Political Responsibility
Trading with repressive regimes is a difficult issue in corporate social responsibility. Some businesses argue that working with these regimes will help to advance them and bring rights to the countries. People and governments have demanded that businesses stop trading with repressive regimes, which was most notably observed when several western governments launched an embargo against the Apartheid government in South Africa during the 1980s. Shell Oil received considerable consumer backlash during the 1990s for its complicit involvement with the Nigerian government that murdered anti-oil activists. These issues make doing business with certain governments an important consideration for corporate social responsibility.

Q:- Importance of Corporate Social Responsibility

Public Relations
In 2004, the Economist magazine conducted two online surveys of corporate executives throughout the world and a separate one of institutional investors. About 85 percent of the respondents indicated corporate social responsibility (CSR) was an integral part of their investment decisions. When you integrate CSR into your business model, you build a reputation as a responsible business. CSR is good for public relations and, subsequently, is free advertising.

Brand Enhancement
When CSR is embedded in an organization's business processes, it becomes part of a longer-term plan that drives competitiveness. For instance, a business that has moved its manufacturing plant to a poor country in order to produce goods cost-efficiently, has to make sure it does not exploit weaker labor laws in the developing world. A consumer in the United States does not want to hear that the suit he is wearing was manufactured by an exploited worker in Vietnam, China or Peru. Rather, a consumer would be happy to know that some of the money he spends on his clothes builds schools and hospitals in poor communities. The brand, its reputation and image cannot be separated.

The Environmental Impact of Your Business

Your business activities not only affect your employees, supplies and the local community, they have a profound impact on the environment. You can make a difference by taking energy efficiency measures, reducing the use of water or using recyclable materials. As more consumers become environmentally aware, they purchase goods from a company that takes into account the impact its business activities have on the environment. While you care for the environment, you save money on your gas or electricity bill because you are using materials and utilities efficiently.

Q:- Pros & Cons of Corporate Social Responsibility

Pro 1: Social Responsibility and Customer Relationships
One of the foundational elements of CSR is that it causes companies to reason beyond basic ethics to consider the benefits of active involvement in communities. In his article "The 7 Principles of Business Integrity," business strategist Robert Moment argues that 21st-century companies must prove themselves to customers to build long-term, trusting relationships. They must also get involved in the community to give back. This community connection endears your company to the local markets in which you operate.

Pro 2: Motivated Employees

Employees are a company's most valued asset. This is the premise of a company's obligation to this key stakeholder group with regard to CSR compliance. This means treating employees with respect and offering fair working conditions. It also means establishing fair hiring practices and promoting a non-discriminatory workplace. This improves morale within the workplace and encourages teamwork. Additionally, a writer on the As You Sow website stresses the importance of managing a diverse workplace so that you can benefit from a variety of backgrounds and life experiences.

Con 1: Expenses
The main reason any company would object to participating in CSR is the associated costs. With CSR, you pay for environmental programs, more employee training and efficient waste management programs. Proponents of CSR agree that any expenses to businesses are ultimately covered by stronger relationships with key customers. However, David Vogel indicates in his Forbes article "CSR Doesn't Pay" that investment in CSR programs may not necessary result in measurable financial results.

Con 2: Shareholder Expectations

Another challenge for companies when considering CSR is the possible negative perception of shareholders. Historically, publicly-owned companies had a primary focus of maximizing shareholder value. Now, they must balance the financial expectations of company owners with the social and environmental requirements of other stakeholder groups. Some shareholders are happy to invest in companies that operate with high integrity. Others may not approve of the aforementioned expenses of operating under CSR guidelines.

Q:- The Three Models of Corporate Social Responsibility

Traditional Conflict Model
In the traditional conflict model for corporate social responsibility, social values and benefits are seen as in conflict with shareholder profits. Under this model, corporations opting to practice forms of social responsibility are likely to see added costs for doing so. Proponents of this conceptual model generally argue that the nature of business is one of trade-offs between economic and moral values, and corporate managers will inevitably be forced to decide between their social and fiduciary responsibilities or their commitment to shareholder equity value.

Added Value Model

A second model for conceptualizing corporate social responsibility is to see social and environmental commitments as a means to increase profit. While proponents of this model tend to acknowledge that conflicts persist in business decisions, they also believe that CSR investments are also capable of generating new revenues. This model tends to focus on issues

like the value of CSR in attracting socially conscious consumers, finding socially conscious employees and managing the risks of negative press.

Multiple Goals Model

Finally, a third model for corporate social responsibility posits a role for social values in corporate decisions that are untethered to economic values. Under this model, corporations have goals beyond shareholder value, including the enhancement of their community without respect to monetary gain. According to Redman, this model is thought to be relatively radical, though some corporate officers have expressed support for it. Proponents of this model emphasize quality of life as the basis of economic activity.