Corporate Social Responsibility: Legal Obligation for Business

This essay explores the positive and negative aspects of making corporate social responsibility (CSR) a legal obligation for businesses. It discusses the impact on resource management, prevention of environmental exploitation, brand awareness, and the potential burden on companies. The conclusion highlights the importance of CSR in preventing the exploitation of environmental resources.

CORPORATE SOCIAL
RESPONSIBILITY

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUCTION...........................................................................................................................1
ESSAY.............................................................................................................................................1
Body 1..............................................................................................................................................1
Four positive points.....................................................................................................................1
Body 2..............................................................................................................................................2
Four negative points....................................................................................................................2
Conclusion.......................................................................................................................................2
REFERENCES................................................................................................................................4

INTRODUCTION
Corporate social responsibility refers to the management concept where the companies are
integrating the social and environmental concerns in the business operations and for interacting
with the stakeholders. It is the method through which the company achieves balance of the
economic, environmental & social imperatives, addressing the shareholder’s expectations. Every
organisation is required to undertake their responsibilities towards the society1. Businesses make
use of number of environmental resources that belong to the whole society. CSR has been
established to ensure that the organisation are undertaking their responsibilities towards the
society. The report covers the positive and negative aspects of making the CSR as legal
obligation for the organisation to follow.
ESSAY
“CSR should be a legal obligation for business. To what extent do you agree? “
Body 1
Four positive points
Compliance with the practices
The practice of CSR is essential for the society on the global scale. It is essential for the
enterprise to ensure that the CSR practices are followed. Companies were using the
environmental resources from years without making any strong contribution towards the
development of the society or protection of the environment. It is the responsibility of every
corporate to ensure that part of their earnings are spend over the maintenance and prevention of
the activities that cause harm to the society. If the CSR becomes legal obligation all the
organizations would be required to undertake their responsibilities towards the society
compulsorily2. This would prevent undue exploitation of the scarce environmental resources.
Organization that are earning high profits can invest small part of their profits towards the
1 Crane, Andrew, Dirk Matten, and Laura Spence, eds. Corporate social responsibility: Readings and cases in a
global context. Routledge, 2019.
2 Grayson, David, and Adrian Hodges. Corporate social opportunity!: Seven steps to make corporate social
responsibility work for your business. Routledge, 2017.

welfare of the society. It will make the companies to take their roles towards the society instead
of being a just a profit making firm.
Prevention of the exploitation of environment
Companies are making uncontrolled use of the environment t la resources without
thinking of the next generations. If the CSR is legalized organizations will be making more
adequate use of the resources. This will be making the organizations vigilant about the use of
resources in the most efficient manner. Along with they will also undertake various programs
and practices that will help in the protection of environment and ensuring the best utilization of
the scarce resources. Making the CSR practices legal obligation will prevent the exploitation of
the environment and resources3. Along with this steps for conservation and prevention will
become an obligation for the organization to undertake compulsorily. Governance will also
impose punishments and penalties for non compliance of the practices.
Increasing brand awareness
If the CSR practices are legalized obligations for the originations they will undertake
them more accurately and actively. Organizations who show their concern towards the welfare f
the society seeks attention and also get better recognition. This creates competition in the market
to undertake more welfare activities for increasing their sales and market share. There are
number of examples of the big brands who have undertook the CSR practices as part of business
to promote their business. It has helped the organizations to reach to the new customers by
making social welfare programs. CSR practices are to be followed by the organizations who
have achieved the specified limit of turnover or profits4. This makes people aware about the
success and growth of the organizations.
Effective management of Resources
Businesses have the functional ability of managing the resources and of solving the various
issues. Making the CSR as legal obligation would be emerging number of creative and
innovative ideas for the management of resources. This will also encourage the organization to
be active towards the stakeholders of the business.
3 Jamali, Dima, and Charlotte Karam. "Corporate social responsibility in developing countries as an emerging field
of study." International Journal of Management Reviews 20, no. 1 (2018): 32-61..
4 Wang, Heli, Li Tong, Riki Takeuchi, and Gerard George. "Corporate social responsibility: An overview and new
research directions: Thematic issue on corporate social responsibility." (2016): 534-544.

Body 2
Four negative points
 Business is concerned with making profits with the efficient use of resources. Business
can undertake one responsibility at one time that is also of running the business and
making –profits. Making the CSR a legal practice will affect the business operations as
the responsibilities of business will be increased
 Business is not established with the motive of solving social issues and it is not required
to engage in these practices5. It focuses that the issues related with th society are the
responsibility of statutory authorities. It diverts the business from its principle goals and
objectives and consumes considerable part of management time. Business is not capable
of handling the social issues along with the business.
 Making the CSR practices will cause extra burden on the companies. There are number
of companies who are not having sufficient liquidity even they are profitable making the
CSR practices legal will require the business to undertake the number of activities that
will require the funds6. This is causing the organizations to make investments.
 Making the CSR practice legal will increase the cost of organizations. Implementation of
the CSR practices will require the company to use sustainable products that cost high to
the company. This causes the company to reduce the quality of their products as the profit
margins are reduced. Legal implication will decrease the profitability and productivity of
the organization operating in the market.
Conclusion
From the above discussion it could be ensure that the arguments in favor of making the CSR
legal are more as compare with the arguments in against. Making the CSR practices will be
bringing more benefits as compared with the costs and the negative issues. Making the CSR
5 Cui, Jinhua, Hoje Jo, and Haejung Na. "Does corporate social responsibility affect information
asymmetry?." Journal of Business Ethics 148, no. 3 (2018): 549-572.
6 Albuquerque, Rui, Yrjö Koskinen, and Chendi Zhang. "Corporate social responsibility and firm risk: Theory and
empirical evidence." Management Science 65, no. 10 (2019): 4451-4469.

practices will cause the companies to take measures and involve in practices for prevention and
protection of the environment. This will also enhance the responsibility of the company towards
the stakeholder management. Business are required to manage their business operations along
with the social responsibilities. CSR to legalize is essential for preventing the exploitation of the
environmental resources.

REFERENCES
Books and Journals
Crane, Andrew, Dirk Matten, and Laura Spence, eds. Corporate social responsibility: Readings
and cases in a global context. Routledge, 2019.
Grayson, David, and Adrian Hodges. Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge, 2017.
Jamali, Dima, and Charlotte Karam. "Corporate social responsibility in developing countries as
an emerging field of study." International Journal of Management Reviews 20, no. 1
(2018): 32-61..
Wang, Heli, Li Tong, Riki Takeuchi, and Gerard George. "Corporate social responsibility: An
overview and new research directions: Thematic issue on corporate social
responsibility." (2016): 534-544.
Cui, Jinhua, Hoje Jo, and Haejung Na. "Does corporate social responsibility affect information
asymmetry?." Journal of Business Ethics 148, no. 3 (2018): 549-572..
Albuquerque, Rui, Yrjö Koskinen, and Chendi Zhang. "Corporate social responsibility and firm
risk: Theory and empirical evidence." Management Science 65, no. 10 (2019): 4451-
4469.