unit 10

Unit-10

Corporate Social Responsibility Definition

ü         A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources. See also corporate citizenship.

ü       Corporate social responsibility is the term used to describe the way that a business takes into account the financial, environmental and social impacts of decisions and actions it is involved in.

Importance of Corporate Social Responsibility

The Importance of CSR

“It’s all about the bottom line”. There are few people, whether in the private or public sector, who hasn’t heard that phrase. Because the bottom line refers to the last line of a financial statement – profit or loss – it has traditionally been the ultimate measure of short and long-term organizational decisions, referring to the economics of costs and revenue.

While economics is still important, the increased complexity of global markets and sophistication of consumers, as well as the increased importance of environmental and social impacts, has changed the way successful organizations look at what positively impacts their bottom line.

Today, organizations that want to achieve long-term success must consider what is known as the Triple Bottom Line: Economic, Environmental and Social. This Triple Bottom Line is also known as the 3Ps: Profit, Planet and People.

Corporate Social Responsibility (“CSR”), as a strategic practice, is key to organizational success because it is one of the few practices that can positively impact all three elements of the Triple Bottom Line, contributing to a healthy bottom line and long-term sustainability.

Because CSR can influence economic, environmental and social factors in a variety of ways, there is no “one size fits all” approach. An effective CSR strategy must consider alignment with the organization’s business strategy, commercial added value, and sustainability of impact. The benefits of an effective CSR approach to an organization can include:

• Stronger performance and profitability
• Improved relations with the investment community and access to capital
• Enhanced employee relations and company culture
• Risk management and access to social opportunities
• Stronger relationships with communities and legal regulators

Conclusion:- Thus, At Schema, it is our role to understand our clients’ short and long-term organizational objectives, and develop effective CSR strategies that are sustainable and can be implemented, measured and reported on.

What is Business Ethics? Write importance of Business Ethics.

The examination of the variety of problems that can arise from the business environment, and how employees, management, and the corporation can deal with them ethically. Problems such as fiduciary responsibility, corporate social responsibility, corporate governance, shareholder relations, insider trading, bribery and discrimination are examined in business ethics.

“ Some business ethics are imposed by law, while others are governed by morals that we have developed such as understanding what is right and wrong. ”

As part of Margot James MP’s Aspirations Programme for young people in the West Midlands in the UK, ACCA was invited along to tell them about a career in accountancy. We also held a blog competition about why ethics is important to business. The winner was Guvan Singh Riar, 16 years old, from West Midlands. Here is his blog

Ethics concern an individual’s moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.

Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may:

• Attract customers to the firm’s products, which means boosting sales and profits
• Make employees want to stay with the business, reduce labour turnover and therefore increase productivity
• Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees
• Attract investors and keep the company’s share price high, thereby protecting the business from takeover.

Knowing that the company they deal with has stated their morals and made a promise to work in an ethical and responsible manner allows investors’ peace of mind that their money is being used in a way that arranges with their own moral standing. When working for a company with strong business ethics, employees are comfortable in the knowledge that they are not by their own action allowing unethical practices to continue.  Customers are at ease buying products or services from a company they know to source their materials and labour in an ethical and responsible way.

For example, a coffee company which states all their raw beans are picked from sustainable plants where no deforestation has occurred, by people paid a good living wage, in an area where investments have been made to ensure that producing the coffee for a foreign market has not damaged the local way of life, will find that all these elements of their buying strategy becomes a selling point for their final product.

A company which sets out to work within its own ethical guidelines is also less at risk of being fined for poor behaviour, and less likely to find themselves in breach of one of a large number of laws concerning required behaviour.

Reputation is one of a company’s most important assets, and one of the most difficult to rebuild should it be lost.  Maintaining the promises it has made is crucial to maintaining that reputation.

Businesses not following any kind of ethical code or carrying out their social responsibility leads to wider consequences. Unethical behaviour may damage a firm’s reputation and make it less appealing to stakeholders. This means that profits could fall as a result.

The natural world can be affected by a lack of business ethics. For example, a business which does not show care for where it disposes its waste products, or fails to take a long-term view when buying up land for development, is damaging the world in which every human being lives, and damaging the future prospects of all companies.

Ethics is important to businesses for many reasons. Businesses can increase sales or increase their reputation.