The Purpose of Business: CSR and Social Enterprises

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Study and Research Skills
“What is the purpose of business?”
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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Conclusion................................................................................................................................10
Reference list............................................................................................................................11
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Introduction
The purpose of business is to fulfil the needs of people by providing them with products and
services. A voluntary commitment of the organisations can be known as Corporate Social
Responsibility (CSR) to manage environmental, economical and social sustainability.
Effective CSR strategy helps the organisations to have an impact in community. The aim
behind choosing effective CSR activity is to ensure that the organisational decisions along
with their business process are ethically correct.
On the other hand, positive social changes can be ensured with the help of social enterprises
where the leaders play significant roles to implement the changes by contributing their time
and money. The main purpose of social enterprises is to fill the gap that cannot be achieved
by the private and public business entities. Moreover, employment opportunities are provided
by the social enterprises to the socially excluded people. From assisting education to
advertising for the new organisations everything can be done by this type of organisations.
The roles of CSR and Social enterprise have been highlighted in this study for business
purpose. Social enterprise and CSR activities ensure positive impact of businesses on the
environment and community.
Discussion
The effort that is made by the companies for the benefits of the society can be known as CSR
activity. As commented by Grayson and Hodges (2017), CSR strategies are made by the
organisations to make sure that the impact of their organisational business on environment
and society is positive. It is the responsibility of the management of the organisations to adopt
proper business practices so that the safety of the customers can be maintained.
Moreover, the business entities need to be committed to be involved in fair competition in
the market. For this reason companies should not sign any agreement that is violating the
regulations of fair business (Unit, 2015). Business standards need to be obeyed by the
organisations even if they are doing business in international platform then also they have to
be familiar with the international business standards. All the business activities need to be
conducted in a transparent manner and confidentiality of business should not be breached.
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Figure 1: Carroll's CSR Pyramid
(Source: Dyllick and Muff, 2016)
Carroll's CSR Pyramid indicates that the organisations need to be profitable so that long
term benefits of the society can be ensured. Due to this reason, the business entities need to
make their target customers so that profit can be made as per the expectations of the
management (Dyllick and Muff, 2016). The organisations need to make their business plans
in an appropriate method so that environment cannot be polluted by them. They can reduce
carbon emission and use of plastics. They can take initiatives to deal with issue related to
climate change. After that the rate of environmental pollution can be decreased by the
organisations. The companies can give job opportunity to the people coming from socially
disadvantaged community. This initiative can be essential for this community to fulfil their
needs and increase their social participation.
Kolk (2016) commented that, the companies need to be aware of the rules and regulations
related to health & safety, employment as well as competition. Moreover, they need to
maintain business ethics while performing the business activities. Charitable donations can be
done by the companies to help the society.
On the contrary, Athanasopoulou and Selsky (2015) argued that, if the organisations do not
have suitable plan on how to implement their CSR activity then it is difficult for them to meet
the objective. Besides that, enough human resource is required here to achieve success after
implementing the CSR plan. Sometimes the organisations also encounter difficulties due to
the different legislations of international market.
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According to Allen (2017), there are five types of CSR strategy such as environmental, HR
based, Philanthropy and community based CSR. In case of environmental CSR, the
organisations need to consider eco-issues and take necessary actions to mitigate this issue.
For example, it can be seen that sustainable energy is provided by Scottish and Southern
Energy supplier of UK by investing one and a half billion pounds and offering required
training to the staffs. Moreover, the young people are giving with working opportunity here
by conducing apprenticeship programme for them (sse.co.uk, 2019).
As commented by Heald (2018), Customer loyalty can be improved by the organisations if
they have good brand image in the market. Due to this reason, the businesses need to adopt
CSR strategy to enhance their brand image and make sure that their CSR strategies are
beneficial for the betterment of their customers. However, CSR strategy can only be
implemented successfully if the internal employees of the organisations have sufficient
knowledge.
At the time of implementing CSR activity the organisations need to evaluate the current
process that can be helpful for them to identify the scope of improvement of their business. In
addition to this, employees’ engagement can be increased by adopting effective CSR activity
as they like to work with the companies who have strong image in market. In fact, the
investors and suppliers are influenced by effective CSR strategy of the organisations and
they agree to maintain long term relationship with them.
Furthermore, long term collaboration in between the charities and business entities can be
achieved with the help of CSR activity. The organisations can do the community projects by
making partnerships with the charities. In order to accomplish the goal of the CSR strategy
the companies are introducing designations for their employees. The staffs are allocated with
their own role and responsibilities to complete the work related to CSR activity. For
implementing CSR strategy the organisations need to take few actions such as- taking the
initiative, assigning staffs, making the policies and collecting resources.
For instance, Unilever has made Sustainable Living Plan to ensure sustainability. It can be
seen that 55% of the agricultural raw materials of this company are from sustainable sourced
to maintain non-hazardous waste. Moreover, the company has taken initiatives to reduce the
amount of CO2 from the manufacturing work (unilever.com, 2019).
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In addition to this, Plan A 2020 has been introduced by Marks and Spencer to make sure
healthier lifestyle of the customers and maintain social inequality. As a result, the society can
be able to get health life and live longer (corporate.marksandspencer.com, 2019).
On the other hand Rodhouse and Vanclay (2016) argued that if the people of local
community do not show their interest in the CSR activity and give their proper participation
then the companies can find it difficult to implement the strategy. Due to insufficient
knowledge about CSR the local people do not want to participate in the CSR activity. For this
reason, the organisations have to spread awareness among the local people related to CSR
strategy and ensure their high level of interest.
As per the point of view of Strandberg (2017), it can be said that the organisations involve in
doing CSR projects related to education, health, empowering women and environment. As a
result, sometimes the organisations perform almost same CSR activity in same location. This
can lead to huge competitive spirit among these organisations. After that they sometimes
forget the aim of the CSR activity and involve themselves in unhealthy completion.
On the contrary, sometimes the policies made by the Government can create barriers for the
organisations to cope with the regulations and do CSR activities. For this reason, it is
necessary for the country Government to take required initiatives to make changes in the
policy and procedures so that the organisations can perform CSR activities in a proper way.
The Government of UK is highly committed to implement CSR strategy and maintain well-
being of the organisation (gov.uk, 2019). Government is influencing the organisations of UK
to use sustainable and ethical practice so that the safety of the people can be maintained.
More than £50,000 charities are raised by Government and they are providing necessary
support to complete the local projects (gov.uk, 2019).
In addition to this, volunteer days have been increased from 3 to 5 days which indicates that
the employees can get 5 days to be involved in the local projects and make sure the well-
being of common people. Moreover it can be seen that 1800 employees of UK have taken
participation in Africa Code Weeks (theguardian.com, 2018). As a result the economic
development can be ensured by helping the young people to enhance their technical skills and
making them understand how to perform their work efficiently. It is also seen that about
£13bn invested by the companies to implement the strategy efficiently and ensure success
(theguardian.com, 2018).
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In case if the organisations are instructed by the Government to follow the rules and
regulations of the country while doing business then they have to do ethical practice
otherwise they can encounter legal issues. The organisations need to take effective CSR
initiatives then only they can be able to maintain the safety of the environment by reducing
risk factors.
Social enterprises are those organisations that apply commercial techniques to improve the
financial, environmental, as well as social well-being of the country. The social enterprises
not only maximises the profit of shareholders but also enhance the social aspect of their
region. The goal of the social enterprises is to achieve objectives of both society and business
(Eldar, 2017). This factor has distinguished from any other corporations. The purpose of the
social enterprises is to encourage, promote as well as take part in social change. The
method of performing the functions of the business of a social enterprise is sustainable way
of development (Rahdari et al., 2016). They increase the profit of the business without
compromising with the development of social aspect of the United Kingdom. The social
enterprises provide opportunities of income to the people so that they would be able to meet
their basic needs. These organisations earn income through sales and reinvest them back into
the company. This would provide long-term benefit to the organisation as well as save it
during the moment of urgency. There are many kinds of social enterprises such as, trading
enterprise, financial institutions, community organisations, charities and NGO’s.
The employees, collectives, and operatives of the company own trading enterprises. This can
be varied as large organisations, for example, John Lewis Partnership, United Kingdom as
well as medium-sized that are owned by the staffs. The small companies too can be social
enterprises that have few numbers of employees.
Financial institutions such as credit unions, cooperative banks, and loan funds are also social
enterprises. These organisations help in exchanging the local currency as well as established
the social values.
Several community organisations are registered as social enterprises. They are, housing
cooperatives, community centres, associations, football clubs, and some others. These
organisations have some purpose and exist to trade through commercial method. The
community organisations’ profit is reinvested into the community for social development.
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The membership of these organisations are expanded who are generally supporters or
customers of the organisation.
Charities and NGO’s mostly operate training organisations and commercial consultancy.
Oxfam is one of the examples of social enterprise. The profit generated by such organisations
is provided to the people in the form of salaries who offer free services to needy people.
Social enterprises innovate and conduct experiment to meet the requirements of the present
services to improve them. They provide help to the people who live in far-off regions by
volunteering. They also provide employment as well as training to the people to improve
their capabilities in work. The social enterprises contribute to the local community and
improve its condition by encouraging the native people on social development (Sepulveda,
2015). They use tactics of traditional business to provide much needed services for the
community of Providence. The services provided by them include helping the education
system of the area by supporting public schools. They help in funding in the businesses of
local area. Social enterprises also promote the start-up businesses by advertising in behalf of
them. The “Social Enterprise Greenhouse” influences the social as well as economic aspects
of the community. It supports the entrepreneurs by providing those networks and tools for
survival of their businesses. The social enterprises connect business and the leaders of the
community who offer expertise, money and time to influence the social aspect of the
enterprises.
“Social Enterprise Greenhouse” has provided employment to around 700 people in the
community of Providence. It has increased the budget of around hundred ventures by four
hundred thousand dollars (Iyengar, 2015).
Social enterprises solve the problem and issues of environment, society, and culture of the
nation. They assist health, education, agriculture, and human rights group of the country
(Fox, 2018). They also help in reducing the negative impacts of business on climate of the
United Kingdom. Social enterprises help the business to expand in different territories thus,
provides international development.
There are some profit companies as well as some non-profit ventures under social
enterprises. Entrepreneurs with the objective of providing ecological and social product set
up the profit companies to the customers as well as generating profit in the business. The
major goal is to reinvest the profit into social programmes. For instance, TOMS is a social
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enterprise that provides free shoes to the needy children in every sale of a pair of shoes. This
organisation has used the profit generated by sales into several programmes of the company
such as in eye treatment to those would buy eyewear from this organisation. In non-profit
ventures, the entrepreneurs use the profit of the sales to solve the economic, environmental,
and social problems of the country. The non-profit social enterprises depend on the funds,
loans, and grants to run the business. One of the examples of non-profit ventures is
BeadforLife that trades necklaces made of paper-bead and teach them the ways to run micro
business. In this way, it assists in providing guidance to the common people to improve their
living standard. It also helps in reducing the domestic violence by supporting the women.
The role of social enterprises is to inspire and encourage the individual to alleviate poverty
by improving their social skills. The social enterprises can take help of latest technologies to
adapt new strategies to make a sustainable change in the society. Social enterprises help
refugees and address recycling in business (Smith, 2017). Green Collect is an example of the
social enterprise that recycles the urban waste for the needy people. This has also helped in
controlling the landfill problems of the region, thus reduced the negative impacts of business
on the environment (Smith, 2016).
The social enterprises conserve the animal rights and provide vocational training to the
disabled people. Some of the examples of social enterprises in the United Kingdom are, “The
Co-operative Group”, “The Big Issue”, John Lewis Partnership”, “Welsh Water”, “Eden
Project”, and “Tech Trust”. The “Co-operative Group” is a retail company that allows
women democratic rights in the society and has championed Fairtrade policy. The company
promotes animal welfare and uses renewable energy in its projects (coop.co.uk, 2019). The
“Big Issue” is a newspaper corporation that provides opportunities of employment to
homeless people of the United Kingdom. In “John Lewis Partnership”, every member of the
organisation is partner in the business. Their salary increases as per the income generated
every year of the organisation. Thus, it has enhanced the lives of the employees of the
company (johnlewispartnership.co.uk, 2019). “Welsh Water” is a non-profit venture that
supplies water in most of the regions of Wales and Western England (dwrcymru.com, 2019).
“Tech Trust” is another example of social enterprise that is also a charity organisation. It
provides help to other NPO’s and charities to in improving their functioning with
“Information Technology”. This organisation provides donation programme of software,
service of email marketing, exchange of foreign currency, and others. It also provides
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discount to the charities to enhance their functioning with less cost (tech-trust.org, 2019).
“Eden Project” also falls under the group of social enterprises. The biomes are famous
public attraction that contains plants of different environments and climates. The botanical
garden preserves wildlife and plants of different kinds. This project also includes programme
of environmental education. In this programme, the relation between the plants and human
beings are discussed to conserve the natural environment. The project utilises green
electricity to save energy as well as it uses rainwater to serve various purposes of the
organisation. In these days, the role of social enterprises provides alternative methods in
offering public services (Seager, 2014). It has become a tool to the change the way of the
operation of the world.
Conclusion
It can be concluded from the given study that corporate social responsibility or CSR influence
the society and environment positively. The methods that are included in this process are fair
competition with the rival companies to preserve the organisational culture. The companies
adhere to the standards of international businesses by adopting CSR in the functioning of
every department of the organisation. The main aspects of this process are that an appropriate
conduct is maintained among the members of the organisation as well as the confidentiality
of the company is safeguarded through policies.
The social enterprises on the other hand, provide essential services to the society by
enhancing the living standard as well as increase the profit of the business. These
organisations consider the social, cultural, and environmental aspects of the country. The
social enterprises provide employment to needy people, donation to the charity organisations,
and educational programmes to improve the knowledge of people considering the social and
environmental aspects. There are various kinds of social enterprises such as non-profit and
profit ventures. The non-profit companies have the objective of providing services to the
community for the well-being of the people. The profit ventures have the objective of
enhancing the profit of the business with the use of sustainable method of development.
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