Evaluate the Relative Importance of Corporate Social Responsibility Relative to Other Corporate Objective
Q2) “Evaluate the relative importance of corporate social responsibility relative to other corporate objective” (40 Marks)
Corporate social responsibility (CSR) is a firm’s decision to accept responsibility for its social, environmental and ethical actions. A firm’s decisions whether to adopt and rank importance to CSR should be due to a variety of reasons, like the financial stability of the company aswell as the culture of the organisation. But one definitive factor would be a firm’s corporate objectives, corporate objectives are a quantifiable statement of a business’s goals which should include measurable targets. Essay will look to examine the relative importance of CSR in relation to other corporate objectives.
Many companies underlying corporate objective is profit maximisation, with this goal ranking higher than any other. This party due to the share holder value theory which makes profit a priority, therefore resulting in many firms questioning whether to become more socially responsible is worth the additional costs which would result in reduced profit for the company and key stakeholder’s groups. Primark offers a perfect example to this point, Primark is a retail firm in which offers exceptionally low prices through exploiting cheaper labour from abroad. If the company was to become more socially responsible they would have to sacrifice their unique selling point of low prices which may cause the company to fail. Thus proving how many businesses will see little importance in CSR relative to profit maximization.
On the other hand companies whose key corporate objective is profit maximisation should take into account that CSR represents a long term commitment which can help to improve reputation and image of the company. This is due to consumers becoming more and more aware and concerned over where goods are sourced from and how they are made. CSR is therefore likely to route to profit maximization in the long term due to consumers now looking for
Corporate social responsibility (CSR) is a firm’s decision to accept responsibility for its social, environmental and ethical actions. A firm’s decisions whether to adopt and rank importance to CSR should be due to a variety of reasons, like the financial stability of the company aswell as the culture of the organisation. But one definitive factor would be a firm’s corporate objectives, corporate objectives are a quantifiable statement of a business’s goals which should include measurable targets. Essay will look to examine the relative importance of CSR in relation to other corporate objectives.
Many companies underlying corporate objective is profit maximisation, with this goal ranking higher than any other. This party due to the share holder value theory which makes profit a priority, therefore resulting in many firms questioning whether to become more socially responsible is worth the additional costs which would result in reduced profit for the company and key stakeholder’s groups. Primark offers a perfect example to this point, Primark is a retail firm in which offers exceptionally low prices through exploiting cheaper labour from abroad. If the company was to become more socially responsible they would have to sacrifice their unique selling point of low prices which may cause the company to fail. Thus proving how many businesses will see little importance in CSR relative to profit maximization.
On the other hand companies whose key corporate objective is profit maximisation should take into account that CSR represents a long term commitment which can help to improve reputation and image of the company. This is due to consumers becoming more and more aware and concerned over where goods are sourced from and how they are made. CSR is therefore likely to route to profit maximization in the long term due to consumers now looking for