Analyzing Corporate Social Responsibility in Business

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FOUNDATIONS OF BUSINESS
COMMUNICATION

Table of Contents
INTRODUCTION...........................................................................................................................................3
CORPORATE SOCIAL RESPONSIBILITY:.....................................................................................................4
SUSTAINABILITY:......................................................................................................................................4
MODELS OF CSR.......................................................................................................................................4
CSR APPROACHES OF LEGO.....................................................................................................................6
BENEFITS OF CSR APPROACH IN LEGO ARE:............................................................................................6
CHALLENGES OF CSR APPROACH ARE:.....................................................................................................7
CSR APPROACHES OF THE SMALL AND LARGE CORPORATIONS AND THEIR COMPARISONS..................7
CONCLUSION...............................................................................................................................................9
RECOMMENDATIONS..................................................................................................................................9
REFERENCES..............................................................................................................................................10

INTRODUCTION
With time, the norms of doing business also changed. Now businesses need to follow CSR
(Corporate Social Responsibilities) policies and to conduct business sustainably. It’s no longer
just about earning profits for businesses. Customers are becoming more and more aware of the
brands and companies that are following CSR policies and are ethically and socially responsible
(Blowfield, 2013). The sales of products and services, as well as the brand value of the
products, are also affected by the social considerations of the companies. In the report,
sustainability and CSR policies are defined in detail along with different models of corporate
responsibilities. With the example of Lego, a renowned toy company, different CSR strategies
adopted by it, the benefits and challenges of adopting CSR policies in a company are also
provided. Further, the difference between CSR policies adopted by small and large companies
is also given. Furthermore, some recommendations and conclusions are provided to summarize
the report.

CORPORATE SOCIAL RESPONSIBILITY:
Corporate Social Responsibility is the responsibility of the business to manage their business
activities in a way to make a positive impact on the environment, society, and its stakeholders.
Corporate Social Responsibility is not just about big companies doing philanthropy. It is the
responsibility that every business has towards its stakeholders, society, and environment.
Conducting business ethically and sustainably is the responsibility of every business (Crane et
al., 2019).
SUSTAINABILITY:
The concept of sustainability defines the need for businesses, government and societies to use
the resources in a way to make sure that the future generation can have the resources they
need to survive. The concept of sustainability is based on the fact that the planet's capacity to
produce natural resources is limited (Blowfield, 2013).
MODELS OF CSR
There are four different models of Corporate Social responsibilities namely economic model,
Philanthropic model, Social Web model, Integrative model. Many philosophers and scholars
have given their models of CSR and believed that the first responsibility of a business to earn
profit but with further evolution and changes, the concept of CSR is also evolving. The four
models also show the changes that came in the concept of corporate social responsibilities.
Economic model:
Milton Friedman (1970) believed that the main responsibility of a business is to earn a profit.
The economic model is based on the concept that business is responsible only for producing
goods and services and fulfilling the economic needs of the company. Its responsibility is to
create job opportunities, create profits and revenue and increase wealth. Almost all the
company follows the economic model but with the evolution of time, the companies realized that
along with earning profits, their responsibilities are greater (Arevalo and Aravind, 2017).
Philanthropic model:
The philanthropic model suggests that businesses should contribute to the benefit of other
people and society. Philanthropy is done by many businesses small and large towards social
issues and causes like hunger, poverty, illness, development, education, etc. (Amaeshi et al.,
2016).

Many companies and small businesses do charity for the benefit of the company like an
increase in brand awareness, increased brand value and increased preference of people to buy
products and services. Philanthropy is very useful for any business and many large corporations
donate towards one or the other cause or partner with many non-governmental organizations to
support the people in need. Many socialists and recent scholars believed that charity should be
done to help others and not with the motive o tax evasion and frauds and for increasing the
brand reputation (Amaeshi et al., 2016).
Social Web model:
The social Web model suggests that businesses and all the corporate firms have social
responsibilities towards the employees of the organizations and towards society. Like all the
citizens, it is the minimum responsibility of the business to run ethically and sustainably and
treat the employees with justification and protect their human rights even when it is not stated
legally (Young and Dhanda, 2013). Many big companies have initiated maternal and paternal
leaves for their employees and also provided them with health insurance and other incentives.
Entrepreneur Michael Porter said that businesses should be responsible for dealing with larger
problems because businesses find a way to turn every problem into an opportunity and find a
solution that can profit the business organizations. This will lead to double profits, two the
organization as well as the environment (Young and Dhanda, 2013).
Integrative model:
An integrative model of CSR focuses on the firms that integrate social responsibility and ethical
considerations and sustainability as their core missions along with economic interests. There is
much social entrepreneurship that is earning profits along with fulfilling the social responsibilities
and environmental rules and regulations. Bill Gates in his speech talked about innovation to
zero. He talked about the concept that innovation should continue until carbon footprint goes
down to zero. This type of philosophy and concern is what is needed by every businessman and
corporate organization to reduce the harmful effects of growth and development as well as
technology on the environment and to maintain sustainability (Marques-Mendes and Santos,
2016).

CSR APPROACHES OF LEGO
Lego is among the top organizations in the UK that have taken many steps towards CSR
and still contributing to the society and environment with philanthropy as well as its
integrated policy to use alternate resources and reduce waste production.
Lego is a toy company that produces toys for the children mostly brick toys. There are many
strategies adopted by Lego to fulfill its social responsibilities. Lego believes that children can be
inspired by toys and these inspirations can shape the values of environmental protection and
social responsibilities in children (Lego, 2019).
Environment: Lego has adopted renewable sources of energy and 100% of the energy
required to build Lego bricks comes from wind energy. The company works on inspiring children
to think creatively to have alternate solutions to protect the environment with different games
and playing initiatives. To achieve sustainability, the company also reduced its CO2 emission
and reusing and recycling waste material to provide a better future for the next generation
(Lego, 2019).
Social values: Lego engages employees in community activity and provide them with fun and
playtime. It believes that the people who have the childlike curiosity to learn and the ability to
imagine and create are the best sorts of employees. Lego treats its customers that are children
with all the care and responsibilities. It has reached 400,000 children and engaged the children
to play games that are influenced by social and environmental responsibilities (Lego, 2019).
Initiatives: Lego joined the United Nations Global Compact in 2003 and became the first toy
company to work in the largest initiative towards CSR. It is still working towards achieving
sustainability and integrated social responsibility its mission and values (Lego, 2019).

BENEFITS OF CSR APPROACH IN LEGO ARE:
 Improved reputation: CSR strategies increase brand awareness and attract customers
to buy products and services. CSR strategies have a positive impact on the minds of
people and create a better perception among people that enhance brand image and
thereby, improve the goodwill and reputation of the firm. Ever since the CSR approach of
Lego and the joining with the United Nations Global Compact, the reputation of Lego
improved tremendously (Lego, 2019).
 Competitive advantage: CSR strategies make the companies different from their
competitors and make them stand out from the crowd. Lego by becoming the first
company to join the UN initiative to conquer sustainability became popular amongst
customers and also the CSR strategies have given a different position to Lego than its
customers (Dupire and M’Zali, 2018).
 Improved employee motivation: CSR strategies enhance employee motivation as
Lego has taken several initiatives to treat employees with care. The employees at Lego
engage in many community activities and volunteering and also engage in playing and
fun. This creates the feeling of belongingness in employees towards the company and
motivates them to perform better for the company as well as for themselves (Lego,
2019).
 The attraction of investors and quality employees: Investors prefer investing in
reputable firms. CSR strategies increase the reputation of the firm. There are many
partners of Lego because it has a great brand reputation that is built by adopting CSR
strategies and conducting business in an ethical way (Dupire and M’Zali, 2018).
CHALLENGES OF CSR APPROACH ARE:
 Additional cost: CSR strategies increase the operational cost of the business in a
way that recycling the waste needs more resources and reducing carbon footprint
need more advanced and costly technology. The use of renewable energy sources
like wind energy also requires external cost as it is expensive to build a wind energy
plant (Rangan et al., 2015).
 The decrease in profit: By engaging in philanthropy and giving paid leaves to the
employees and fulfilling social and environmental responsibility decrease the
revenue of the firm and might also reduce the efficiency of the business.

 Dilemma: Companies face a dilemma, whether to act ethically or look for the profit of
the company. Many times, to fulfill ethical responsibilities, the profit of the company
needed to be compromised (Rangan et al., 2015).

CSR APPROACHES OF THE SMALL AND LARGE CORPORATIONS AND THEIR
COMPARISONS.
When it comes to CSR approaches, both small and large corporations should adopt the
strategies. Small companies and MSMEs can adopt smaller changes like going paperless,
reducing the production of waste, helping the smaller community, switching off the lights, turning
off the electronic gadgets, when not in use, etc. (Soundararajan et al., 2018). Large companies
carry out large philanthropy activities and engage in promotion and fundraising activities. Large
companies often partner with Non-governmental organizations and charity organizations to
mitigate social challenges like hunger, poverty, and illiteracy from the world. The major
difference between CSR approaches taken by the small and large organization is that small
organization can better manage and maintain CSR approaches internally and motivate their
employees to work ethically and responsibly while large corporations can spread awareness
externally with their massive size and their large influence and resources (Wickert et al., 2016).

CONCLUSION
This report connotes that CSR approaches are becoming very important for a business to grow
and develop. Consumers prefer to associate themselves with the companies that run ethically
and are socially responsible. Lego is doing good business and the growth and development of
the company are increasing because of the CSR approaches taken by it. There are many
benefits of the CSR approaches and many entrepreneurs believe that it is their “moral minimum”
to be socially responsible not only to the shareholders but to all the stakeholders. Therefore,
many small and large corporations are adopting CSR strategies (Young and Dhanda, 2013).
RECOMMENDATIONS
Businesses need to be aware of their responsibilities and doing just charity for the sake of
reputation and tax evasion does not count as being socially responsible. What is more important
is to conduct the business ethically and to treat the employees and workers better and give
them timely incentives and leaves. It is the moral responsibility of businesses to be
environmentally conscious and to return to society in a better way not just with their products
and services. Both small and large organizations can take small steps towards sustainability
and aware their employees to become more responsible (Wickert et al., 2016).

REFERENCES
Amaeshi, K., Adegbite, E., Ogbechie, C., Idemudia, U., Kan, K.A.S., Issa, M. and Anakwue,
O.I., 2016. Corporate social responsibility in SMEs: a shift from philanthropy to institutional
works?. Journal of business Ethics, 138(2), pp.385-400.
Arevalo, J.A. and Aravind, D., 2017. Strategic outcomes in voluntary CSR: reporting economic
and reputational benefits in principles-based initiatives. Journal of Business Ethics, 144(1),
pp.201-217.
Blowfield, M. (2013). Business and Sustainability. Oxford University Press, Oxford.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Dupire, M. and M’Zali, B., 2018. CSR strategies in response to competitive pressures. Journal
of Business Ethics, 148(3), pp.603-623.
Lego, 2019. Our Responsibility Story. Online available at
https://www.lego.com/en-us/aboutus/responsibility/story/planet-promise-children, last accessed
on 4th September 2019.
Marques-Mendes, A. and Santos, M.J., 2016. Strategic CSR: an integrative model for analysis.
Social Responsibility Journal, 12(2), pp.363-381.
Rangan, K., Chase, L. and Karim, S., 2015. The truth about CSR. Harvard Business Review,
93(1/2), pp.40-49.
Soundararajan, V., Jamali, D. and Spence, L.J., 2018. Small business social responsibility: A
critical multilevel review, synthesis and research agenda. International Journal of Management
Reviews, 20(4), pp.934-956.
Wickert, C., Scherer, A.G. and Spence, L.J., 2016. Walking and talking corporate social
responsibility: Implications of firm size and organizational cost. Journal of Management Studies,
53(7), pp.1169-1196.
Young, S.T. and Dhanda, K.K. (2013) Sustainability: Essentials for Business. Sage Publications,
London.