Why Are 'corporate Social Responsibility' Strategies Important for Enterprises?

Hochschule für Wirtschaft und Recht Berlin

Berlin School of Economics and Law

Nilay BIÇAKCIOĞLU

310978

Title of Essay: Why are 'Corporate Social Responsibility' strategies important for enterprises?

Prof. Dr. Jose M. Magone

LV 400591.01

Work, Business & Society

Berlin, 2011

Abstract

Nowadays, the importance of social responsibility activities is growing awareness for companies.It is directly related to your business and if you want to have long term business success, you have to create value for the society.People are aware of the social and environmental problems of society.In this technology time, it is so easy to reach the information whatever they want They always follow the daily news from the world and care about them.Due to the fact that paying for the strategies of CSR increases attention to the corporation.Companies' understanding of social responsibility should always be the part of their investment strategy.They should regard the "Corporate Social Responsibility" as a business management philosophy not as a social activity.It definitely provides sustainability to the business.The purpose of this essay is to explain why "Corporate Social Responsibility" strategies are so important for enterprises.Firstly I will explain the theoretical information about criterias and framework of CSR and then I will support the facts by giving examples from the international companies to clarify the reasons of importance well.

Index of Abbreviations

The abbreviation used throughout on this essay is presented below;

CSR - Corporate Social Responsibility

OUTLINE

Chapter 1: Theoretical Background...............................................................4

Introduction.....................................................................................4

Definitions of CSR...........................................................................4

Level of CSR Engagement..................................................................5

Legal criteria.........................................................................6

Economical criteria..................................................................6

Ethical criteria........................................................................7

Philanthrapic criteria................................................................7

Chapter 2: Importance of CSR ...................................................................7

The reasons for companies to engage in CSR ...........................................8

Chapter 3: Areas of CSR............................................................................8

Governance....................................................................................9

Risk Management............................................................................9

Social and Employees........................................................................10

Environment.................................................................................10

Chapter 4: Conclusion..............................................................................10

Chapter 1: Theoretical Background

Introduction

This chapter will present the theoretical background of "Corporate Social Responsibility". Firstly, definitions of CSR will be presented and then a well-known CSR model in business area will be shown to understand the background knowledge of CSR well.

Definitions of CSR

There are infinite number of definitions of CSR that are ranging from the simplistic to complex and many names for the same concept such as Corporate Citizenship, Corporate Responsibility, Corporate Social Performance and Business Sustainability.

Generally, CSR is doing the right thing when nobody looks at you. It is an obligation to have a resposibility for providing more benefits to your employees, environment, corporate governance, human rights, cultural differences, non-disciriminatory activities and fair trade than profit for your shareholders.European Commission defines CSR as , 'A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.' (European Commission 2001, p. 5) and according to Aaronson, 'Business decision making linked to ethical values, compliance with legal requirements, and respect for people, communities, and the environment around the world.' (Aaronson 2003, p. 310). The term of CSR seems new to the corporate world. Nowadays, it looks so popular.Lots of company try to emphasize that they care about it.But actually, it has taken place over than fifty years. In 1953, Bowen conceived the CSR as a social obligation and also Peter Drucker emphasized the importance of society in his book which is called "The Practice of Management" in 1954 by writing that 'The social dimension is a survival dimension. The enterprise exists in a society and an economy. Within an institution one always tends to assume that the institution exists in a vacuum. And managers inevitably look at their business from the inside. But the business enterprise is a creature of a society and an economy, and society or economy can put any business out of existence overnight. The enterprise exists on sufferance and exists only as long as the society and the economy believe that it does a necessary, useful, and productive job.' (Drucker 1954, p. 28). Lots of people