Corporate Social Responsibility: Creating Shared Value and Challenges

This essay explores the concept of corporate social responsibility (CSR) and the creation of shared value, emphasizing the importance of CSR practices for enhancing organizational performance. It discusses the challenges involved in implementing CSR practices and adopting sustainability within company operations, highlighting obstacles such as transparency demands, resource limitations, lack of strategic vision, and the difficulty of balancing sustainability with productivity. The essay also touches upon the role of CSR in addressing global issues like poverty and environmental degradation, the influence of culture and religion on CSR in different regions, and the growing importance of CSR in the wake of global events like the COVID-19 pandemic. It concludes that complying with CSR is crucial for protecting stakeholder interests and ensuring the long-term betterment of society, particularly through the promotion of social welfare and the creation of shared value.

CSR Shared Value
Essay
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Table of Contents
Introduction ....................................................................................................................................3
Main body .......................................................................................................................................3
Conclusion ......................................................................................................................................6
References.......................................................................................................................................7
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Introduction
The purpose of this essay is to develop understanding regrading the concept of corporate
social responsibility and creating shared value. It reflects upon the importance of CSR practices
and their importance for improving overall performance of an organisation. It also discuss
challenges faced in implementation of CSR practices and adopting sustainability in the
operations of companies.
Main body
According to Kramer and Pfitzer, If businesses become more involved in stimulating
social welfare and overall development, the critical issues faced by societies such as poverty,
health issues and pollution would be reduced while bringing rise in corporate profits. The
concept of creating shared value has became significant and received a great deal of appreciation
from society and community (Sharma, 2019). Therefore, it has became important that
corporations must comply with corporate social responsibility to pursue financial success. It has
became crucial for companies to create shared values as the question of corporate legitimacy
have arise with company's reaching at prosperous backgrounds at the cost of ignoring
community interests. Moreover, the operations of companies are causing issues and rising
concerns of environmental issues such as climate change and other societal issues including
income inequalities which requires immediate attention and expertise of business models of
private sector. But as soon as businesses attempts at pursuing shared value strategies, they are
faced with various obstacles at every turn. Companies do not operates in individual backgrounds
and their existence is critically dependent upon several societal situations that influence their
markets and interrupt the flow of productivity. Moreover, governmental policies and regulations
serves a range of limitations and demand is being influenced by cultural norms (The Ecosystem
of Shared Value, 2016).
This essay argues that the implementing practices complying with corporate social
responsibility has its own challenges and it is quite difficult to establish effectiveness in
execution of corporate social responsibility. While focusing upon corporate social responsibility,
businesses are required to protect their own interests as well and ensure their survival and
sustenance in the long run. The importance of corporate social responsibility has reached beyond
the concept of feeling good or generally complying with standards of law but it is beneficial for
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companies to approach practices of CSR in order to avoid pitfalls and build social capital
through positively influencing the lives of stakeholders and to protect the interest of
stakeholders. Complying with CSR results in building social reputation and helps a business to
achieve appreciation of society. The social and environmental issues and concerns of
stakeholders are increasing day by day resulting in posing challenges for companies to deal with
them effectively. Today a consumer is not only concerned about knowing the products or
services offered by an organisation rather they are also concerned about the ways and approaches
that a company undertakes in order to comply with social and environmental standards. The
companies which are not making any contribution towards the welfare and improved staus of
society, it takes no time for consumers to shift their preferences or spend their money somewhere
else. There are several obstacles that are faced by corporations to effectively establish practices
of CSR including the demand for transparency and disclosure. It is demanded by all stakeholders
that companies with whom they are doing business must disclose every aspect of their business
and maintains high transparency in processes which cannot be guaranteed. Businesses are often
indulged in practices which they keep confidential from outsiders and it results in ambiguity and
unclarity among stakeholders (Sánchez‐Torné, Morán‐Álvarez and Pérez‐López, 2020). There is
a need for businesses to adopt practices which are effective and could be made clear to outsiders
with the support of authentic and relevant data. The reliance of investors on global reporting
initiative states that they are likely to make investments into companies which are highly marked
for maintaining corporate sustainability and responsibility. Thus it is creating pressure on
companies if they are expecting that investors must approach them. Lack of resources is one of
the most major factor which is making it difficult for companies to effectively establish CSR.
Another major cause of ineffectiveness in establishing CSR is the lack of strategic vision (The
Ecosystem of Shared Value, 2016). Moreover, the departments which are made responsible for
monitoring the compliance with CSR practices do not perform their duties with due diligence
which implies ignorance and negligence. Moreover, it is quite challenging for companies to
adopt sustainable methods and at the same time maintaining productivity to a great extent.
Sustainable practices focus upon reduction in waste and also implies optimum utilisation of
resources ensuring minimum depletion of earth's resources. In order to provide consumers with
highly modern and unique as well as basic commodities to fulfil their requirements, it is quite
challenging for companies to deal in sustainable practices. However, there are certain ways
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through which sustainable practices can drastically improve profits of companies through
minimisation of costs. Adopting sustainability implies that products can be redesigned and zero
wastage is promoted through recycling waste. Investing in research and development department
could help in providing solutions and methods which would promote redesigning products from
waste. Moreover, environmental friendly methods are more economical as they make use of
natural as well as renewable resources to protect the interest of environment. Therefore,
appropriate use of sustainable practices could help in improving profits of the company.
According to Lieber (2013), corporate social responsibility is considered as the mode
which can solve the problems of global poverty, environmental degradation and social situation.
Local authority bodies and some of the Non Governmental Organizations believes that the
partnership between the public sector and private sector can more impact positive influence on
the world. There are others organizations management that has recognized that CSR can fulfil
the purpose like Hrm, marketing, quality management, communication, reporting and finance.
It's ideology is widely considered to signalize the loyalty and the government that is good to
control the vocabularies and ideological language that can create a surrounding of uncertain.
Ronnegard (2013) analyses that the CSR in the countries of middle east can not copied the style
of western ideologies because of the potent influence of religion and culture in that
region(Corporate social responsibility research, 2016). But, It is considered that the influence of
the shareholders in the countries of middle east is limited because of the variation of beliefs,
cultures, religions and attributes of employees and consumers. Whereas some others authors
declare that CSR is developed as an idea to increase the foreign direct investment into the Arab
countries. It has been argued that in creating the awareness of CSR in the Arab countries politics
played a major role. Avina (2013) has a done a research that the view of CSR has changed in the
Middle East after the event of spring in Arab for both the local and the international companies.
And after the spring of Arab the sense of CSR among the society and the government and non-
government sectors has increased.
Sri Lanka that is situated in south Asia has a population of over 20 millions and with a
investment of around one billion US dollars in the direct foreign investments, it has increased
their investment level by the Multinational companies (Adnan, Hay and van Staden, 2018). It is
considered as average developing country, so it is a major challenge for this to increase the
economic growth sustainably without damaging the environment and simultaneously eliminating
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the social issues like malnutrition, poverty and improper workplace ethics. The main plan to
boost the economy is by improvising the public infrastructure projects and the country is doing
this from very past, but still there is rural poverty in this country. There is one report that is
conducted by Senaratne and Liyanagedara (2012) that states the compliance level with the
Global Reporting Initiatives guidelines in a view to disclose the public listed companies selected
from the various sectors. The authors has concluded that the GRI compliance level is low and
disclousers varies significantly among the companies(Corporate social responsibility research,
2016).
It has been concluded that research on CSR in the developing countries should be given
more suitable consideration to the data in which the research has taken place. Both the
development and reporting of CSR activities have an impact from various social, political,
economic and cultural environment and these factors have impact on the value of activities
which can improve the society and the environment (Qiu and et.al., 2021). The concept of the
CSR activities in the countries like Asia and middle east is very different from the west
countries.
The growing effects of pandemic has made it more absolute and important that
businesses must adopt corporate social responsibility and create shared values to ensure
responsibility towards society and for the betterment of overall society. The emergence of
pandemic implied the necessity of promoting social welfare and create shared value. For
instance, numerous large scale and renowned organisations have contributed in providing
funding for the patients suffering from corona virus and for supporting construction of COVID-
19 centres as well as equipments required for betterment of situations.
Conclusion
It has been concluded from the above essay that it is crucial for companies to comply
with corporate social responsibility in order to protect the interests of stakeholders. After the
emergence of pandemic, it has became critically important for companies to promote corporate
social responsibility and indulge in practices of creating shared values.
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References
Books and journals
Sharma, E., 2019. A review of corporate social responsibility in developed and developing
nations. Corporate Social Responsibility and Environmental Management, 26(4), pp.712-
720.
Sánchez‐Torné, I., Morán‐Álvarez, J.C. and Pérez‐López, J.A., 2020. The importance of
corporate social responsibility in achieving high corporate reputation. Corporate Social
Responsibility and Environmental Management, 27(6), pp.2692-2700.
Adnan, S.M., Hay, D. and van Staden, C.J., 2018. The influence of culture and corporate
governance on corporate social responsibility disclosure: A cross country
analysis. Journal of Cleaner Production, 198, pp.820-832.
Qiu, S.C. and et.al., 2021. Can corporate social responsibility protect firm value during the
COVID-19 pandemic?. International Journal of Hospitality Management, 93, p.102759.
Yuan, Y. and et.al., 2020. Business strategy and corporate social responsibility. Journal of
Business Ethics, 162(2), pp.359-377.
Online
Corporate social responsibility research, 2016. [Online]. Available through:
<https://jcsr.springeropen.com/articles/10.1186/s40991-016-0003-7>
The Ecosystem of Shared Value, 2016. [Online]. Available through:
<https://hbr.org/2016/10/the-ecosystem-of-shared-value>
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