Corporate Social Responsibility in a Recession

Only available on StudyMode
  • Download(s) : 93
  • Published : May 14, 2010
Open Document
Text Preview
10/12/2009
Student Name: | Niall Byrne |

| Corporate Social Responsibility In A Recession |

Table of contents
Introduction3

Brief overview of CSR......................................................................................................3 CSR is an unnecessary expense 3

Reasons for continuing CSR5
What exactly does CSR improve about business Strategy6
Is there a happy middle ground8

Conclusion9

Reference list:...............................................................................................................10

Appendices12
Appendix 1: different stances companies have on CSR and their relationship with stakeholders12 Appendix 2: Nike Respect 12

Introduction
In times of economic down turn many businesses will want to cut unnecessary expenditure. This paper will look at two viewpoints related to CSR (Corporate Social Responsibility): 1. Is CSR a unnecessary expense for the modern day business 2. Is CSR a necessary expense for the modern day business The paper will include real life examples and view points from many sources, and then come to a conclusion regarding the effect which the economic down turn has had on CSR. Brief overview of CSR

According to (1)Johnson et al (2008) CSR is concerned with the ways in which an organisation exceeds its minimum obligations to the company stakeholders, normally each firm will have a different view point on its approach to CSR. Appendix 1 shows the different approaches business have and how they manage their stakeholder.

CSR is an unnecessary expense:
This point of view leads on from the definition of Corporate Social Responsibility, which states that CSR is concerned with the way in which the organisation exceeds its minimum obligations. The word exceed leads one to think that CSR is carried out as a process which is done as an extra on top of normal goals of the company/business. An article (2) (Economist, Nov 19th 2008) wrote that many companies pretend that their CSR strategy runs deeper in their organisation than it really does, and if pressed they would only be able to name a few ways in which the company is truly socially responsible. With companies viewing CSR in this way then they may see it as an expense that yes it would be “nice” if we done it but it doesn’t really make financial sense to incorporate or carry in on with the current business strategy. This way of thinking would apply most definitely in a period of economic down turn (3) Caulkin, (2009) “An economic recession would also be bad news for the CSR industry, parts of which might be seen as a luxury companies could live without” (2) (Economist, Nov 19th 2008)

Example of businesses cutting back on CSR in recession time: Asda/Wal-Mart in 2008 didn’t even mention the environmental factors in their company report. Instead they focused more on the "profitable growth", "Staff retention" and "customer focus". This is a change according to (4) Macalister (2008) who said that in the past this organisation never refused an opportunity to stress the importance of the green movement. The second example is that of BP. (4) Macalister (2008) talked about the fact that BP were considering the sale of its renewable-power business, and instead setting its focus on getting their profits and share price back on track. An interesting article written by (5) Tim Breitbarth (2009) argues the point that high levels of CSR can be seen as an international trade barrier. The reason why he says this is that some countries within the EU and also outside the EU don’t have as highly developed CSR culture, in other words some countries CSR development is still in its infancy stage compare to the EUs more developed understanding of it. This can be seen as a way in which CSR in the EU can prevent the global economy taking advantage of new opportunities and in turn slow down the movement out of the economic down turn. The World Bank (2002), WTO (2003) and...
tracking img