There is no doubt that the global companies’ impact on diverse aspects of life is enormous – social and environmental, as well as political and economic ones experience an immense contribution on behalf of the corporations. Be it an airline company or a coffee distributor – regardless of their realm, the corporations contribute to society in many ways, including their end-product and the way they produce it. To engage corporate social responsibility (CSR) business models means to be conscious of a company’s impact on the environment and society – to reduce the damage to the first, and contribute positively to the second. Nonetheless, such consciousness might be controversial due to the possible low profitability of companies and, in some areas, impossibility to incorporate these models. Despite its possible inconveniences, the companies should engage the CSR as soon as possible since the impact they have on the whole world is enormous.
The influence of the company’s policies on the environment
The companies applying the CSR concept reduce the possible damage to the environment. The United Nations Industrial Development Organization (UNIDO) (2020) provides the following definition of CSR: “Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations” (UNIDO para.1). Currently, the global community is well aware of the impact they have on the environment – be it air, water, or plastic pollution. Morrison provided research among the European community on whether the people are environmentally educated and aware of the environmental contribution of the corporations. The investigation shows that 55% of the European community is aware of the ecological impact of the product they purchase or use (Morrison and Beer 87). The author states as well that a product eco-label is of importance to 50% of the consumers when acquiring a product (Morrison and Beer 89). To boost the company’s profitability level, the organizations should meet the customer’s demand, which may motivate them to consider their policies towards the production carefully, and, thus, reconsider their contribution to the environment.
The influence of the company’s policies on its stakeholders’ lives
The companies engaging the CSR contribute positively to both external and internal stakeholders’ lives. The stakeholders are defined as the groups that can be affected by the company’s internal and external policies or can affect them by their working or social activities. The internal stakeholders are managers, executives, or employees, and external ones are individuals, communities, and society (Yoon and Chung 92). Corporate social responsibility concerns a large number of people involved: employees, investors, stakeholders. Yoon states that McDonald’s company engages the CSR models by delivering housing and medical insurance to its external stakeholders, and Sturbucks (2017) – by providing educational support to its stakeholders (89). The companies, therefore, ensure the well-being, personal and professional development of the stakeholders and their family members, offering them the necessary medical and educational support (Yoon and Chung 89). These companies, thereby, are conscious of how their policy affects the people involved in their business operations, be it a purchasing of a product, or its delivery, and provide favorable conditions for the people engaged.
The influence of the company’s policies on the working environment
The companies involving the CSR business models elaborate, improve, and promote a healthy working environment. The corporations’ employees are engaged in social interactions every single day. The working climate, as a matter of fact, defines the individual’s life in many ways – it forms their psychological condition and willingness to strive for better results, develops their knowledge, and boosts the working experience. Lee conducted research focused on corporate organizational behavior (OCB) as an essential factor in increasing a company’s profitability level (Lee and Ha-Brookshire 939). OCB is defined as an individual’s voluntary commitment to the goals of an organization that is not part of their assignments. OCB underlies the creation of a supportive working environment where one is more inclined to offer help and receive it if needed. Such an environment may motivate the workers to improve their personal and professional performances and engage more in the work process.
Thus, by contributing to the elaboration and operation of a healthy working climate, the companies impact on many aspects of one’s life. The authors claim that the employees are willing to take necessary measures to develop a healthy working climate that, in turn, helps to build OCB despite the size of the company (942). The company executives have incentives to elaborate and promote OCB, which underlies a positive and supportive working climate. Mental and physical health (the psychosomatic has to be taken into account), which are a consequence of the working environment, are one of the main reasons why the CSR should be incorporated.
The possible counterarguments
While the incorporation of the CSR business models shows credible results, some may say that it remains ineffective, not profitable, or impossible to be applied to in some companies. Before engaging the CSR models in the organization’s policies, the company executives should ensure the employee’s favorable working conditions and, if needed, cover some of their medical insurance and other expenses. If a company creates insufferable working conditions knowing that the employees will not leave, the positive contribution to the environment is no longer possible. For instance, a company that prolongs the working day without raising the salary, and not providing the employees with the necessary equipment, can scarcely be interested in contributing positively to the environment. At the moment, this kind of company exists, and the counterargument is fairly reasonable.
Others may claim the CSR is not profitable for companies. The experts still argue on the issue, and they did not come to any conclusion. Since the investors constitute the major and, at times, moving force of the organizational business operation, low profitability may undermine the company’s activities. If a corporation is not able to gain a benefit, it may stop operating completely, and will no longer contribute to society in any way. Thus, the correlation of the company profitability level and the application of the CSR models should be considered.
With this in mind, one may consider the importance of engaging corporate social responsibility in the company’s policies. The organizations’ business operations, their internal and external policies, undoubtedly, make a significant impact on all aspects of the life of every individual. They may affect our daily activities, our physical and mental health, and our aspirations and worldviews. Incorporation of the CSR business models may lower the damage to the environment, create a favorable working climate for their internal stakeholders, and provide them with medical and educational support. Some may claim the CSR models are low profitable for the companies and, thus, not suitable for some of them and unnecessary. Others may say that CSR is not applicable to companies that are not capable of creating favorable working conditions first. While the counterarguments may indeed be reasonable, the companies now have the opportunities to develop and grow. With the responsibility the corporations have towards the society, they should engage the CSR models as soon as possible.
Lee, Ha-Brookshire. “The effect of ethical climate and employees’ organizational citizenship behavior on U.S. fashion retail organizations’ sustainability performance.” Corporate Social Responsibility and Environmental Management, vol. 25, no. 5, 2018, pp: 939-947. Web.
Morrison, Beer. “Consumption and environmental awareness: Demographics of the European experience” Socioeconomic environmental policies and evaluations in regional science: Essays in honor of Yoshiro Higano, Springer Science+Business Media Singapore, 2017, pp: 81-102.
United Nations Industrial Development Organization. Web.
Yoon, Chung. “The effects of corporate social responsibility on firm performance: A stakeholder approach.” Journal of Hospitality and Tourism Management, vol. 37, no. 1, 2018, pp: 89 – 96. Web.