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Corporate Social Responsibility Practices: Benefits and Costs

Introduction

The present paper is devoted to the benefits and costs of corporate social responsibility (CSR) practices. CSR presupposes responsible, ethical conduct that requires taking into account various impacts of organizational activities (Yang, Colvin & Yim-Yu 2013). CSR also involves the idea that the shareholders are not the only group of stakeholders that a company is responsible for and should take into account (Armstrong 2006, p. 181).

My personal experience of contributing to the CSR activities practiced in my organization is limited: as a healthcare worker, I was involved in our effective resource management practices and, therefore, sustainability efforts. Apart from that, I am not certain that our policies were very successful, which is why I am going to use Microsoft, which is one of the most reputable CSR-savvy organizations (Smith 2012), as an example.

Organizational Perspective

CSR requires expenses of various resources and effort dedicated to CSR strategy development (Caldwel et al. 2010; Gond et al. 2011). For example, Microsoft (2015) is involved in multiple humans rights and environmental sustainability activities as well as humanitarian and disaster response missions. These efforts do not bring profit, but they are rewarded with public acclaim and improved brand reputation.

Moreover, the moral satisfaction of doing the right thing is shared by the employees: 93% of Microsoft employees report that their company acts as a responsible member of their communities (Smith 2012, para. 17). As a result, their commitment, motivation, and job satisfaction are likely to grow, and the same outcomes can result from ethical human resources management (HRM) practices (Greenwood 2002; Shen 2011). Similarly, CSR may be used to imply or prove the quality of the product: for example, Microsoft (2015) demonstrates its responsible business practices to inspire trust and improve reputation.

Since reputation and trust are difficult to trace, it is questionable if CSR practices can be directly connected to profitability, but Microsoft is certain that they contribute to the financial success of the company (Smith 2012, para. 19).

Stakeholders’ Perspective

CSR is beneficial for the majority of stakeholders, and the benefits typically improve their trust, which makes CSR beneficial for the company again. For example, Microsoft (2015) makes a point of ensuring and enhancing the transparency of its activities, which improves the trust of the shareholders. Similarly, CSR presupposes ethical HRM, including appropriate compensation, workplace safety, the lack of discrimination, and other benefits (Guest & Woodrow 2012), all of which are promised by Microsoft’s (2015) CSR principles. As mentioned above, these CSR practices lead to positive HRM outcomes (Greenwood, 2002; Shen, 2011).

However, CSR may also presuppose responsibilities for employees. For instance, Microsoft (2015) demands that all employees complete training on the Standards of Business Conduct that were specifically developed to ensure respectful and ethical conduct at every level of the organization. For the employees who take managerial roles, these responsibilities become especially acute.

Finally, some CSR efforts reach extensive populations to fight global issues, which also improves the reputation of a brand. Environmental sustainability activities can be regarded as a form of such an effort. Another example is Microsoft’s (2015) YouthSpark initiative that is aimed at creating educational and professional opportunities for youths, especially those who are disadvantaged in any way. Thus, Microsoft (2015) contributes to the elimination of global issues like poverty, unemployment, discrimination, and disparity, which are of importance to every citizen of the world.

Reference List

Armstrong, M 2006, Armstrong’s handbook of human resource management practice, Kogan Page, London.

Caldwell, C, Truong, D, Linh, P & Tuan, A 2010, ‘Strategic Human Resource Management as Ethical Stewardship’, Journal of Business Ethics, vol. 98, no. 1, pp. 171-182.

Gond, J, Igalens, J, Swaen, V & El Akremi, A 2011, ‘The Human Resources Contribution to Responsible Leadership: An Exploration of the CSR–HR Interface’, Journal of Business Ethics, vol. 98, no. 1, pp. 115-132.

Greenwood, MR 2002, ‘Ethics and HRM: a review and conceptual analysis’, Journal of Business Ethics, vol. 36, no. 3, pp.261-278.

Guest, D & Woodrow, C 2012, ‘Exploring the Boundaries of Human Resource Managers’ Responsibilities’, Journal of Business Ethics, vol. 111, no. 1, pp. 109-119.

Microsoft 2015, Citizenship Report. Web.

Shen, J 2011, ‘Developing the concept of socially responsible international human resource management’, The International Journal of Human Resource Management, vol. 22, no. 6, pp. 1351-1363.

Smith, J 2012, ‘The companies with the best CSR reputations‘, Forbes. Web.

Yang, N, Colvin, C & Yim-Yu, W 2013, ‘Navigating corporate social responsibility components and strategic options: the IHR perspective’, Academy of Strategic Management Journal, vol. 12, no. 1, pp.39-58.