There is no doubt that businesses play very important roles in the development of economic, social, cultural and other aspects of people and society. Businesses provide employment opportunities, provide revenue for the government and play roles in society in many aspects through their corporate social responsibility mechanisms. Consequently, the facilitation of businesses is very important in any country. But it is undeniable that many business organizations do not play their corporate social responsibilities and some business organizations play less, even if many other business organizations play their social responsibilities. Moreover, there are notable differences in playing corporate social responsibility by businesses in developed, developing and less developed countries.
It is notable that the term corporate social responsibility indicates the responsibility of companies to society. It indicates the ways of the functioning of a company that enhance society, not degrade it. It is also rendered as a business model. Depending on the company and industry, it can take a range of forms including, but not limited to, philanthropic activities and harm reduction policies for society. But it is a strategy that is mostly undertaken by large corporations, though smaller organizations can also implement it. The larger the organization, the more responsibility it takes for society with the setting up of standards for the practice of corporate social responsibility and its implementation.
No doubt, there are many factors that motivate companies including national and multinational companies to implement corporate social responsibility. Indeed, there are policy pressure, market pressure, and innovation and technology development that motivate for the implementation of corporate social responsibility. Financial benefits to companies and branding are important motivating factors. Besides, reputation and image, relationship building and organizational culture work as motivational factors for many companies. Company maturity, profitability, the size of the company and strategic business direction can also motivate some companies to implement corporate social responsibility. Of course, profitability is one of the key motivating factors for the implementation of corporate social responsibility programs. But motivational factors can differ across countries and organizations.
No doubt, corporate social responsibility not only helps society and others but also benefits companies too through a variety of means. With corporate social responsibility, companies and industries can build trust among buyers, suppliers, customers and others and create a positive image of companies. In addition, the implementation of corporate social responsibility increases the customer retention rate. Socially responsible companies can stand out from the competition due to their positive image and recognition. Moreover, there are many other benefits to companies that implement corporate social responsibility. Despite spending on corporate social responsibility, it consequently helps companies to earn more profit compared to those that do not implement it.
But there is a range of policy based, organizational, implementation oriented and other concerns with the corporate social responsibility of different companies. Some notable challenges are a lack of resources, low willingness to pay for corporate social responsibility, a lack of supportive policies, cultural differences, and a lack of understanding of the importance of corporate social responsibility. Indeed, many organizations lack enough resources to implement it. Besides, the culture of a country may also put a hindrance to the implementation of social responsibility, especially for multinational companies. Besides, the lack of management commitment, an absense of customer interest and unadequate scientific frameworks can also put barriers to some companies to the implementation of it.
Moreover, there are some other challenges including relations between government and business and high costs of sustainable products. Besides, a lack of understanding of the barriers to the implementation of it and a high percentage of debt to assets that can sometimes put a hindrance to the implementation of corporate social responsibility. High operation costs of corporate social responsibility and inappropriately developed mechanisms can also put significant barriers. Of course, the role and extent of barriers depend on the type of companies or industries. Because of such barriers, many companies cannot implement corporate social responsibility, though many others can implement it.
But corporate social responsibility can also have some disadvantages. These are especially the case when corporate social responsibility is not implemented as desired or a company acts irresponsibly. For example, it can incur extra costs leading to rising production costs and the reduction of profits, which are the goals of companies. Moreover, if companies act responsibly, they need to share information and shortcomings of products or processes to make them less vulnerable to negative impacts upon their own reputation. But another problem is that if companies act irresponsibly but play corporate social responsibility, it can still bring a negative image to the companies. Alternatively saying, the implementation of corporate social responsibility is desired as it is imperative to sustain companies in the competition.
Thus, measures are needed to address the above challenges and flaws to make sure that business organizations across countries implement their corporate social responsibilities. In this respect, it needs to be made mandatory for business organizations to spend a certain percentage of their revenue on the implementation of their corporate social responsibility. Moreover, they need to promote good initiative as part of their corporate social responsibility. In those countries, where business organizations do not play their corporate social responsibility, strict mechanisms need to be developed. Of course, some other measures are also important here. But it is important for companies to understand potential barriers and ways to overcome barriers to implementing corporate social responsibility.
Of course, some other measures including setting or improving standards of corporate social responsibility and the reflection of the willingness of companies to pay are also important to securing the implementation of corporate responsibility. Indeed, many companies can implement corporate social responsibility but they are unwilling to do so. Also, emphasis needs to be given to the implementation of it by multinational companies. But governments need to facilitate the implementation of it by making favorable policies. Besides, companies need to develop policies conducive to implementing corporate social responsibility in ways that help good initiatives in other countries too.
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