Corporate Social Responsibility

This essay discusses the ineffectiveness of Corporate Social Responsibility (CSR) in sustaining stakeholders' interest. It provides examples from different industries and argues that companies manipulate CSR to focus on specific issues that increase their profits rather than addressing major problems. The essay recommends that governments should implement strict policies for mandatory adoption of a CSR model by corporations and ensure that companies are focusing on major issues that affect the development of different stakeholders.

Running head: CORPORATE SOCIAL RESPONSIBILITY
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Corporate Social Responsibility

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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

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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 CAFÉ program is a good example started by Starbucks for improving product quality

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(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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