Corporate Social Responsibility (CSR) is referred to a business approach that focuses on sustainable development of social, environmental and economic benefits of each stakeholder. Effective compliance with corporate social responsibilities ensures that company is focusing on the health of customers, employee rights, protection of the environment and its resources and other aspects that promote sustainable development including promotion of education and reduction in poverty rates (Carroll & Shabana, 2010). Although corporations implement a CSR structure for achieving business interest and increasing overall profits rather than sustaining all stakeholders’ interest. The companies manipulate their CSR structure in order to focus on issues that fulfil their business interest rather than addressing major issues (Du, Bhattacharya & Sen, 2010). Consequently, organisations are taking steps towards adopting a suitable CSR model that assist them in fulfilling their corporate responsibilities and they are implementing new policies for sustaining the interest of each stakeholder. However, companies focus business interest rather than sustaining each stakeholder’s development, and they manipulate CSR approach in order to focus on specific issues rather than addressing major problems. Analysis of different examples from tobacco, transportation, and soft drinks industry shows clearly that a CSR approach has remained ineffectively for sustaining stakeholders’ interest, therefore, strict policies are necessary to be implemented by governments across the world. The arguments that support this position are companies focus on increasing profits rather than sustaining stakeholders’ interest, and they manipulate CSR model to focus on specific issues.
Organisations adopt a CSR approach in their business model since it creates a positive brand image which allows them to charge high prices for their customers rather than sustainable the development of each stakeholder. Implement a CSR structure for increasing business interest and profits rather than sustaining each stakeholder’s development. For example, companies invest in renewable energy sources for reducing their carbon emissions which create a positive brand image which allows them to justify charging high prices on their products. Apple Incorporation is a good example; latest iPhone launched by Apple costs more than US$1,000 whereas it costs around US$370 to manufacture (Escamirosa, Flores & Martinez, 2015). Similarly, corporations operating in soft drink sector misuse CSR model for achieving business interest. For example, soft drink industry is a major contributor to increasing obesity worldwide which negatively affects their sales. In order to address this issue, PepsiCo launched a ‘Refresh campaign’ through which they committed to donating $20 million for charitable purposes based on customers’ votes. The customers have to option to vote by purchasing a specially marked Pepsi bottle, and they can vote as much as they want by purchasing more bottles. This campaign resulted in increasing the overall sales of Pepsi because people were buying more soft drinks as they think it was for a social cause (Dorfman et al., 2012). While at the same time, the obesity rates continued to increase in the United States which is a major issue that negatively affects millions of people and soft drink companies are a major contributor due to which obesity rates increase. It shows how companies are avoiding CSR regarding customer health and using other welfare campaigns to increase their sales. Nevertheless, it is argued that even if these companies are charging high prices for manufacturing products using renewable energy sources, their carbon emissions have reduced, and funding for charitable purposes has increased as well (Emeseh, & Songi, 2014). Indeed, they also encourage other companies to establish a CSR model in order to increase their sales, for example, BMW raised awareness regarding social and environmental issues by launching programs such as ‘the Schools Environmental Education Development Project (SEED)’ (Janks, 2014). Although this is true to some extent, but it allows companies to create a monopoly in the market while at the same time use of cheaper products that are manufactured by non-renewable sources has increased. For example, Volkswagen cheated emissions tests and use a huge marketing campaign in order to push diesel cars that cause huge carbon emissions which is bad for the environment (Rhodes, 2016). Thus, the adaptation of a CSR approach has not been effective for sustaining stakeholders’ interest.
Another reason why the adaptation of CSR approach remains ineffective is that organisations manipulate their CSR structure to fulfil such social issues which increase their profitability while at the same time avoiding major ethical concerns that are necessary to be addressed by them. For example, tobacco industry faces pressure from consumers and public health advocates regarding health concerns. Tobacco companies implement CSR approach in order to avoid legal and regulatory actions, and they make charitable contributions for justifying their operations. The companies started ‘youth smoking prevention’ campaign which uses slogans such as ‘Tobacco is whacko if you’re a teen’. But, these advertising campaigns increase the sale of tobacco among teenagers because of forbidden fruit aspect of smoking (Fooks et al., 2011). However, a CSR approach assists companies in taking necessary steps for assessing and addressing the issues regarding different stakeholders that assist them in sustaining their future development. For example, Starbucks purchases 100 percent ethical coco beams and creates different campaigns for promoting their employees’ development. The CAF? program is a good example started by Starbucks for improving product quality (Gallaugher & Ransbotham, 2010). Similarly, the firm partnered with Ethos Water for bringing clean water to over one billion people (Brei & Bohm, 2011). It shows how companies are contributing to the development of societies and protecting environmental resources while complying with their CSR model. While this point has validity, however, it did not have a positive impact on the society because companies only focus on specific issues rather than addressing the major problems. For example, TOM’s shoes donate shoes in Africa for every pair that they sell which result in increasing their sales in western countries. However, their business model is negatively affecting the business of local shoemakers in Africa, and it is reducing their sales (Roncha & Radclyffe-Thomas, 2016). While at the same time, other major issues in Africa remain the same. Therefore, the adaptation of a CSR approach has remained ineffective because corporations are manipulating their CSR goals to focus on specific issues that increase their profits rather than addressing the major issues that are negatively affecting the society as a whole.
To summarise, this essay has shown that companies are using their CSR model to increase their profits rather than sustaining all stakeholders’ interest. Furthermore, organisations manipulate their CSR objectives to focus on specific issues that increase their profitability and create a positive brand image rather than addressing issues that are harming different aspects of society. Hence, it can be concluded that adaptation of a CSR model did not have a positive impact on the society and the environment. Different examples of companies from soft drink, tobacco, transportation, fashion, and manufacturing industry are provided in the essay that supports this statement. It is recommended that governments across the world should implement strict policies for mandatory adoption of a CSR model by corporations. The policies should ensure that companies are focusing on major issues that affect the development of different stakeholders rather than focusing on specific issues that in the long run generate more profits. Effective monitoring and reporting of the CSR policies implemented by the company for addressing major issues should also improve the effectiveness of a CSR approach. This model will improve the effectiveness of a CSR approach and improve the overall development of society.
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