COMPANY LAW: A REPORT ON CORPORATE SOCIAL RESPONSIBILITIES Free essay! Download now
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COMPANY LAW: A REPORT ON CORPORATE SOCIAL RESPONSIBILITIES
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DescriptionCOMPANY LAW: A REPORT ON CORPORATE SOCIAL RESPONSIBILITIES
CORPORATE SOCIAL RESPONSIBILITY (CSR)
is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and the environment in all aspects of their operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking steps to improve the quality of life for employees and their families as well as for the local community and society at large.
Now the question arises that why should companies whose major objective has been to maximize profits for the benefit of their shareholders worry at all about serving the interest of society at large? The answer is simple . A business cannot succeed in a society which fails.
The broad rationale for a new set of ethics for corporate decision making, which clearly constructs and upholds a company's social responsibility arises from the fact that a business enterprise derives several benefits from society, which must therefore be reciprocated by companies.
However,the practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses. Others argue that it is nothing more than superficial window-dressing, still others argue that it is an attempt to pre-empt the role of government as a watchdog over powerful multinational corporations.
While the interests of shareholders and the actions of managers of any business enterprise have to be governed by the laws of economics, requiring an adequate financial return on investments made, in reality ,the operations of an enterprise are being driven by much larger set of objectives that are today being defined under the term Corporate Social Responsibility (CSR).
This, therefore, clearly establishes the stake of a business organization in the good health and well being of a society of which it is a part. More importantly, in this age of widespread communication and growing emphasis on transparency, customers of any product or service are unlikely to feel satisfied in buying from a company that is seen to violate the expectations of ethical and socially responsible behavior. We find, therefore, that to a growing degree companies that pay genuine attention to the principles of socially responsible behavior are also favoured by the public and preferred for their goods and services.
The current concept of CSR covers a range of issues that can be covered and linked to the fabric of sustainable development.Protection of the environment and a country's natural resources are certainly a paramount element of this concept of sustainable development.
But what would be equally important is the need to ensure that society does not suffer from disparities of income and provision of basic services like health care, education and literacy. To carry this list further, it could be argued that the United Nations' Millennium Development Goals (MDGs) and the WEHAB (Water, Energy, Health, Agriculture, and Biodiversity) agenda of the UN Secretary General are key essentials for bringing about a solution to the very basic problems facing society. Consequently, if corporate actions are to target the most fundamental problems facing a poor country like India, then the components of the MDGs, including water and sanitation, prevention of eradicable diseases and the items included in the WEHAB agenda in some sense become guideposts for corporate social strategy and action. It is often asked why a company should worry about anything other than the bottom line measured purely in financial terms.
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