Corporate Public Responsibility Definition

Before we commence to explore the cultural responsibility of a given company we need to understand what the word actually means and therefore this paper starts off with a few definitions. Regarding to Dr. John Schermerhotn's "Exploring management" (2012) corporate sociable responsibility "is the responsibility of a business to serve its own interests and those of its stakeholders. " In Oct 2011 the Western Commission published a fresh policy on commercial social responsibility, which states that to fully meet their social responsibility, corporations "must have in place an activity to integrate communal, environmental, and ethical and human privileges concerns to their business procedures and core strategy in close collaboration using their stakeholders". (Commission rate, 2011)

A Carroll's four - part meaning of CSR targets the types of interpersonal responsibility a business has. They can be economic, legal, honest and philanthropic. The monetary responsibilities a firm has are to produce goods and services that culture desires and deliver them to the consumers at a fair price. The legal responsibilities of your company are to obey the guidelines and mechanisms posed by the contemporary society. But laws and regulations cannot cover the full range of habits expected of the business enterprise by the society. Thus come the honest tasks - they embody the entire opportunity of norms, worth and prospects that represent what the community regards as reasonable and just. And also important the fourth kind of responsibility regarding to Carroll is philanthropic - not a responsibility in the true sense of the word but is view as one as a representation to the expectations to the present business by the community.

In other words CSR policy is an built in, self-regulating mechanism, by which companies screens and ensures that they act in accordance with the laws, ethical expectations, and international norms. CSR is a process which main goal is for the business to accept responsibility for its actions and encourage a positive impact through its activities on the environment, stakeholders, consumers, employees, and all other members of the city who can also be affected by the company's actions.

Development of CSR 3

The concept of corporate social responsibility is a comparatively new one but the meaning behind the word has gone through a great deal of changes. And although the term CSR is becoming popular in the 1960s, it is correct to say that communities through history experienced some goals to the organizations.

In the 18th century Adam Smith manifested his traditional or traditional economic style of business. The classical view held a population could best determine its needs and wants through the marketplace. And by acting in a self-interested manner, individuals could produce and deliver goods that could earn them a income, but also meet up with the needs of others. But even 200 years ago Smith accepted that the free market could not perform correctly if the individuals didn't act frankly and justly towards each other and intervention was needed to ensure that.

After Smith emerged the Industrial revolution and with it radical changes throughout the market - technology allowed for more efficient production, people started out living better and large organizations obtained great power. This was the time of "Social Darwinism" - the idea that the concepts of natural selection were suitable to business and public insurance plan. Thus, even though a lot of people were great philanthropists at that time, the firms that made them wealthy were practicing business methods which were exploitative to the workers.

Around the start of the 20th century the community changed contrary to the large organizations and their exploitation of personnel and regulations were enacted to safeguard employees, customers and contemporary society most importantly. Between 1900 and 1960 the firms gradually began to accept additional responsibilities apart from making a income and obeying the law.

In the 1960s and 1970s the civil protection under the law movements, consumerism, and environmentalism damaged society's objectives of business. It had been expected of companies never to cause societal problems but to also learn to participate in fixing the already existing problems. This is predicated on the view that corporations should go beyond their financial and legal responsibilities and accept duties related to the betterment of contemporary society. This view of commercial sociable responsibility is the prevailing view in much of the earth today.

CSR guiding principles and aims

The main guiding key points and aims of corporate public responsibility we mentioned previously in the two previous elements of the paper but now they will be summarized. Among the guiding principles is a company should conduct its business in an ethical way and with the interest of the complete community in mind. Another basic principle is that a company should reach positively to emerging cultural priorities and targets and try to answer them ached of regulatory confrontations. And maybe the most important of the guiding key points of CSR for a business is to balance the shareholder pursuits against those of the city.

The goal of CSR plans is to enhance companies form polluters and expositors, which they have been around in days gone by, to good residents of the community, that have the ability to balance their pursuits with those of the community and have an overall positive impact on the contemporary society.

Approaches of CSR

In his publication "The Civil Corporation" Simon Zadek has recognized four different strategies by which businesses react to CSR and they're defensive, cost - profit, strategic and invention and learning methodology. The defensive methodology is made for companies that are prepared to do only the bare minimum in neuro-scientific CSR to avoid pressure that makes them incur costs. The cost - benefit procedure entails a company will take on sustain activities only if they visit a direct benefit from them for the business in case this benefit exceeds the expenses incurred by executing this activity. Companies, which discover the changing environment and build relationships CSR as part of a deliberate emergent strategy, are functioning under the tactical approach. And lastly, in the development and learning approach an active proposal with CSR helps the business to understand the marketplace and enhances organizational learning, which over time contributes to competitive edge.

Models of CSR

There are extensive models of CSR just as there a wide range of differences in the way people understand the word CSR and what it requires. In this paper there will be only three models discussed - Carroll's CSR pyramid, the intersecting circles model and the concentric group model.

Carroll's pyramid

The leading model of CSR is Carroll's four - part pyramid. It presents all anticipations the contemporary society has of the companies and defines them in individual categories. "It really is intended to illustrate that the total cultural responsibility of business comprises particular components that, when used together, make up the whole. " The components of the pyramid have been cured as independent components in practice they aren't mutually exclusive and are even linked. The separating of the components is done mainly to be able to help the professionals see that the several types of responsibilities are in constant and dynamic stress with each other. The most significant tensions naturally are those between your economic domain name and the other three domains of CSR according to Carroll - legal, honest and philanthropic. "The traditionalist might see this as a conflict between a firm's "concern for income" and its "concern for world, " but it is suggested here that can be an oversimplification. "

The intersecting circles model

The Intersecting circles model is completely different from the Pyramidal one and the two main variations are which it recognizes the likelihood of intersection between your CSR domains and it removes the hierarchical structure. Since the interconnection between the several domains of CSR is one of its essential characteristics and is also of great importance Carroll, as well as Schwartz, modified his model and suggested an alternative procedure. The IC model retains that "the different tasks are in dynamic interplay with each other, which is the overall corporate and business responsibility to improve harmony and take care of conflicts between them. " This model cases that the economical responsibility is definitely not the most important, but all tasks a company has to the city are equally important.

The concentric circle model

The concentric-circle (CON) model is similar to both the pyramidal and the IC models. The similarities with the pyramidal are in that it views the monetary role of business as its core social responsibility. Along with the similarities to the IC model are for the reason that it emphasizes the interrelationships among the several corporate social tasks. But apart from those similarities this model is quite different from both the earlier models. The CON model identifies the corporate economic role in terms of enchasing the nice of society - "be constructively profitable", while the pyramid defines it in conditions of narrow self - interest - "be profitable". In contrast both with the pyramid and the IC model, the CON model describes the non economical social obligations as embracing and permeating the central economic duties.

Potential business benefits of CSR (Arguments for CSR)

There are lots of potential benefits an enterprise could get by employing a CSR insurance plan. Their effect on the said business can vary greatly depending on the nature and level of the business and on the level of the CSR insurance policy adopted by the business.

Some of the reasons a company chooses to put into practice a CSR policy are:

Enlightened Self-Interest

Or quite simply that businesses' long - term interest is to be socially in charge. The society faces some very serious problems helped bring largely by the surge of the large firms and the increased use of resources and in order for the businesses to have the ability for another development and in a more extreme matter for another they must try and do their best to solve or at least ameliorate those problems.

Also nowadays people are increasingly more concerned about the future of the Earth and the abovementioned problems and are inclined to look for a developed CSR program in the business they work with. This means that a CSR program can be an help to recruitment of new employees and retention of the prevailing ones. CSR can also help improve the perception of your company among its staff, particularly if said staff is involved in the policy through different benefits and activities provided by the business.

Government restrictions

Another reason companies implement CSR regulations are the Authorities laws and interventions and the benefits the Government authorities has for "model citizens". Companies are keen to avoid disturbance in their business through taxation or laws. They prevent them by firmly taking substantive voluntary steps, whit that they can persuade governments and the community that they are taking issues such as health and safety, diversity, or the environment seriously.

Brand differentiation

A good CSR insurance plan can also help a company improve its ranking with the community. In the modern current market companies look for ways to create themselves apart from their competition and a CSR policy can have a large role in building customer devotion. Within the past 10 years a poll uncovered that, with a 95 percent majority, the public believes not just that companies should focus on gains for shareholders but also that companies should be dependable to their employees and areas, even if making things better for workers and neighborhoods requires companies to sacrifice some income.

Risk management

Risk management is a central part generally in most commercial strategies. Reputations that take generations to develop can be ruined in time through occurrences such as corruption scandals or environmental crashes. An excellent CSR program and a culture of "doing the right thing" can offset these hazards and prevent from sketching unwanted and negative attention from the Government and the regulatory organs.

Criticisms and concerns (Arguments against CSR)

Even though there are extensive supporters of CSR, gleam whole lot of criticism and concerns. A few of them are:

Nature of business

In the traditional economics the key purpose of an organization is to earn profit. Milton Friedman, argued that sociable issues are not the concern of business people and these problems should be resolved by the unfettered workings of the free-market system. If the free market cannot solve the problems then the authorities and legislation should do it. Friedman also says that since only people can have cultural responsibilities, corporations are only responsible with their shareholders rather than to society as a whole.


Some critics believe that CSR programs are undertaken by some businesses merely to distract the general public from the main functions of the said business. They argue that some businesses start CSR programs for the commercial gain they enjoy through elevating their reputation with the general public or with government and claim that corporations which can be found solely to increase profits are unable to advance the hobbies of society all together. One such company is McDonald's.

Since the 1970s, the McDonald's Corporation's connection with Ronald McDonald House has been considered CSR and relationship marketing and recently the business has strengthened its CSR programs related to its labor, environmental and other procedures. Nevertheless, in the case of McDonald's Restaurants v Morris & Steel it was ruled that to state that McDonald's employees worldwide do badly in terms of pay and conditions and this if one eats enough McDonald's food, one's diet may well become saturated in unwanted fat etc, with the real risk of heart disease holds true.

Dilutes Business Purpose

Another criticism id that businesses and specifically managers are definitely more focused on finance and operations and are not equipped to take care of social decisions. This causes dilatation of the business' goal. Critics claim that putting into action a CSR plan would put business into fields of effort not related to their "proper goal" - to earn profit.

Too much power

Another discussion against CSR is that businesses curently have enough vitality in their hands - monetary, environmental and technological. Why should they have even more? In reality this debate is void because businesses have this communal power and furthermore this view ignores the option that businesses might use their social electricity for the public good instead of their personal gain.

Social Accounting and Auditing

Social Accounting and Audit establishes a construction for ongoing monitoring, evaluation and accountability to stakeholders both inside and external to the organization. It can help companies to examine their performance and endeavors at reaching sociable, environmental and financial targets and ensure that it's working corresponding to its worth. A number of the key rules of Social Accounting and Auditing are encompassing the views of individuals that are essential to the business; comprehensiveness; capacity to be viewed in comparison with others; done on regular intervals; checked by the third person and readily available to people in and outside of the business.

There are three main steps in Social Accounting and Auditing. Before the actual process begins there's a step called Getting ready and stands for the period in which a company discovers how Sociable Accounting works, what recourses it requires and exactly how it is been able. The first step is Planning - the business clarifies its mission, objectives, activities and values. The second step is the real Accounting - the company decides the concentrate of the public accounting, collects relevant information and analyses it. The ultimate step is Reporting and Auditing - the information collected and examined in Step two 2 is helped bring together within a document, which then is reviewed by people for beyond your company and shown to the wider consumer.

Practical part

JUNG - Company's history

JUNG is a limited liability company set up in 1994. It possessed been founded by Nikolay Penev and Hristofor Naydenov. The company's main scope of activities includes engineering and trade.

In 2004 Jung Task is recorded and in 2007 the business reorganizes. Both core activities of the company are split into different companies with JUNG undertaking only commercial activity and JUNG Project - only development activity.

Nikolay Penev and Hristofor Naydenov become Chief executive officers of JUNG Task and develop the building services of the company. JUNG Task offers many services - turn-key development, making and mounting of metallic structures, roof and faade products and elements, design work, etc.

Ivo Georgiev and Tinka Dimitrova were appointed for CEOs of JUNG to be able to carry on the trade related activities of the previously signed up with business. They trade with building products, construction chemistry and mixtures, heating insulations, dry development systems, paints, varnishes and coatings, doors, bathroom furnishing, drainage systems, tools, roof lamps.

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