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The concept of corporate social responsibility (CSR) suggests that the company voluntarily assumes additional obligations to society. That is, it not produces high-quality and safe products, but also invests additionally in its employees, the environment, and the territory of its presence. In addition to the fact that the company must bring money to its shareholders, it must also improve the environment around it through its activities, both in terms of compliance with environmental standards and the development of the social sphere (Lindgreen & Swaen, 2010). The policy of socially responsible business allows the company to achieve a stable position in the market through the implementation of measures (Hinson et al., 2016). In turn, this helps to build trusting relationships with customers and partners, as well as to form a loyal attitude of the companys employees and increase the involvement of employees in the organizations work processes. The trust of customers and the loyalty of employees make it possible to attract additional investments and expand the business.
The doctrine of social responsibility has become an integral part of the corporate culture of many modern companies, and it is fundamentally changing the role of corporations in the capitalist economy. The ideas of corporate social responsibility reflect the aspirations of many business people to fulfill the desires of a wide range of citizens (Hinson et al., 2016). It is doubtful that the managers of companies that claim to be socially responsible are able to predict how to make the world a better place in any way (Lindgreen & Swaen, 2010). At the same time, they clearly contribute to weakening public support for the ideal of a free market economy.
Nevertheless, it is necessary to consider the phenomenon of collective social irresponsibility, which is directly opposite to the previous one. Social irresponsibility can also manifest itself on a global scale. The most effective way to consider such a strategy is the example of the pharmaceutical industry. Many giants of this market, such as Merck, Bayer, and Pfizer, are involved in scandals related to the inefficiency of their drugs (Antonaras & Dekoulou, 2019). In one of the latest lawsuits against Merck Corporation, allegations were made that the high effectiveness of the companys mumps vaccination of children with the companys drugs was falsified (Antonaras & Dekoulou, 2019). The companys virologists confirmed that their supervisor manually altered test results that showed the vaccine was not working (Antonaras & Dekoulou, 2019). The whole truth was revealed when virologists filed a lawsuit against their company. The reason for this irresponsibility is the desire of management to earn a large amount of profit. For example, if tests showed that the mumps vaccine was ineffective or far from what was claimed, Mercks licenses to manufacture this vaccine would be revoked (Antonaras & Dekoulou, 2019). Because of this, competition from other vaccine manufacturers could greatly worsen its position in the pharmaceutical market.
The more the positions of large corporations in the global economy are strengthened, the greater the effect of the negative consequences of their activities. Over the past five years, both the US and Europe have seen steady growth in corporate profits (Antonaras & Dekoulou, 2019). At the same time, it overtook the growth of wages, as a result, the share of profits in GDP increased, while wages fell. By definition, such a trend cannot continue indefinitely, and the backlash is already beginning in society (Tengblad & Ohlsson, 2010). Thus, the steady rate of profit growth cannot be characterized as an exclusively positive phenomenon. It will be difficult for managers and owners of companies to avoid feeling guilty towards society for their economic success (Antonaras & Dekoulou, 2019). Pressure from politicians and the media will lead business leaders to proclaim their companies as companies of corporate citizens who assume corporate social responsibility.
On the other hand, corporate social responsibility does nothing to make corporations more efficient. Any firm is already socially responsible in the sense that it serves society by producing goods and services, as well as contributing to the development of innovation and technology. Corporate social responsibility also interferes with the work of company leaders, namely to earn as much money for shareholders as possible (Tengblad & Ohlsson, 2010). Whether its protecting the environment or fighting poverty, in one way or another, corporate social responsibility actions are aimed at improving the world (Lindgreen & Swaen, 2010). More importantly, corporate citizen status is fundamentally changing the role that private companies play in a market economy. In addition, the principles of corporate social responsibility are united by another feature, they are not free. They will have to pay for either high costs or low returns, or both.
However, these conclusions should not be decisive for corporations. The fact is that on this issue, I share the position on the need for corporate social responsibility. Indeed, without this institution, corporations would receive more revenue, but this is the wrong priority from the point of view of society (Antonaras & Dekoulou, 2019). For example, the caffeine chain Starbucks voluntarily pays Central American coffee suppliers at a price higher than the market price (Antonaras & Dekoulou, 2019). Thus, the policy of Starbucks is likely to make it difficult to structurally change the industry. Nevertheless, the corporation maintains a leadership position in its niche, has a huge capital and protects potentially vulnerable groups of the population (Antonaras & Dekoulou, 2019). It is clear that the losses are not critical, but the contribution to social well-being brings important and positive consequences. Control and awareness of current issues is not a specific knowledge that only highly qualified specialists possess (Tengblad & Ohlsson, 2010). Moreover, one of the effective tools for the implementation of social responsibility is public opinion and the needs.
References
Antonaras, A. & Dekoulou, P. (Eds.). (2019). Cases on corporate social responsibility and contemporary issues in organizations. IGI Global.
Hinson, E., Renner, A., & Helena, v. Z. (2016). Bank customers preferences and responses to corporate social responsibility (CSR) initiatives in Ghana. African Journal of Business Ethics, 10(1).
Lindgreen, A., & Swaen, V. (2010). Corporate social responsibility. International Journal of Management Reviews, 12(1), 1-7.
Tengblad, S., & Ohlsson, C. (2010). The framing of corporate social responsibility and the globalization of national business systems: A longitudinal case study: JBE. Journal of Business Ethics, 93(4), 653-669.
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