Meaning of CSR: CSR is the process of assessing an organizations impact

on society and evaluating their responsibilities. CSR begins with an

assessment of a business and their: Customers. Suppliers. Environment.
Definition:

1. Corporate social responsibility, often abbreviated "CSR," is a

corporations initiatives to assess and take responsibility for the
company's effects on environmental and social wellbeing. The term
generally applies to efforts that go beyond what may be required by
regulators or environmental protection groups

2. Different organizations have framed different definitions - although

there is considerable common ground between them. My own
definition is that CSR is about how companies manage the business
processes to produce an overall positive impact on society.
Take the following illustration:

Companies need to answer to two aspects of their operations.

1. The quality of their management - both in terms of people and processes
(the inner circle).
2. The nature of, and quantity of their impact on society in the various
areas.
Outside stakeholders are taking an increasing interest in the activity of the
company. Most look to the outer circle - what the company has actually
done, good or bad, in terms of its products and services, in terms of its
impact on the environment and on local communities, or in how it treats
and develops its workforce. Out of the various stakeholders, it is financial
analysts who are predominantly focused - as well as past financial
performance - on quality of management as an indicator of likely future
performance.

What is Strategic Corporate Social Responsibility?

By taking a strategic approach, companies can determine what activities
they have the resources to devote to being socially responsible and can
choose that which will strengthen their competitive advantage. By planning
out CSR as part of a companys overall plan, organizations can ensure that
profits and increasing shareholder value dont overshadow the need to
behave ethically to their stakeholders.
1. Strategic CSR provides companies with solutions for:
2. Balancing the creating of economic value with that of societal value
3. How to manage their stakeholder relationships (especially those with
competing values)
4. Identifying and responding to threats and opportunities facing their
stakeholders
5. Developing sustainable business practices
6. Deciding the organizations capacity for philanthropic activities
The strategic corporate social responsibility perspective is a more
modern one that combines the best of the efficiency and social
responsibility perspectives.
This perspective argues that three criteria can guide manager actions:
1. Inside-out approach: managers can look inside the company at issues
that are more rather than less important as a function of the
companys strategy and business activities. Example: Wal-Marts
labor-intensive nature places a heavy emphasis on workers.
2. Outside-in approach: managers can look outside the company at
issues that the company has an impact upon. Example: a firm whose
manufacturing plant could harm the environment would look at
specific issues regarding the environment.
3. Outside-out approach: look at social issues in general in terms of the
extent to which they are problematic. This approach does not
consider any kind of direct impact on the corporation.
Why is CSR important?

Social responsibility is important to a business because it demonstrates to

both consumers and the media that the company takes an interest in wider
social issues that have no direct impact on profit margins. These issues may
be local, national or global, but a concern for the health and wellness of
others that does not involve sales can be seen as commendable if done well.

For this reason, evidence of a healthy social responsibility policy can impact
buying decisions where customers seek to make an ethical purchase. This,
in turn, can lead to greater profits for a business. However, building a
highly regarded and trustworthy reputation is more valuable in this
instance, and observers appreciate that social responsibility initiatives take
time to establish and manage.

Furthermore, being part of a scheme that helps disadvantaged people or

those otherwise in need can help boost morale for employees within the
responsible company. Along with other methods of morale boosting, this
can lead to greater productivity among the workforce. Knowledge that a
product and service has a great influence on social causes can be a genuine
delight to employees, customers and business owners alike. Over time, the
business contribution to a charity, cause or community can be a significant
amount of charitable funds, product donations or other ventures.

When the importance of social responsibility is recognized as part of a

business's foundation, the impact of such endeavors can have life-changing
consequences for recipients of aid and, equally, instill a sense of pride in the
people who support and work toward its growth. A business can grow with
or without social responsibility, but doing well for others allows a business
to reap rewards in many ways.
 BEHAVIORAL VIEW

Arguments for and against CSR

FOR
1. The rise of the modern corporation created and continues to create
many social problems. Therefore, the corporate world should assume
responsibility for addressing these problems.
2. In the long run, it is in corporations' best interest to assume social
responsibilities. It will increase the chances that they will have a
future and reduce the chances of increased governmental regulation.
3. Large corporations have huge reserves of human and financial
capital. They should devote at least some of their resources to
addressing social issues.
AGAINST
1. Taking on social and moral issues is not economically feasible.
Corporations should focus on earning a profit for their shareholders
and leave social issues to others.
2. Assuming social responsibilities places those corporations doing so at
a competitive disadvantage relative to those who do not.
3. Those who are most capable should address social issues. Those in
the corporate world are not equipped to deal with social problems.