Corporate Social Responsibilty and its Importance

Essay by divyamohanankkUniversity, Master's March 2005

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Corporate Social Responsibility and Its Increasing Importance

"The ideals of human perfectibility and of achievement are authentic antidotes to the existential anxiety of guilt. What is true for an individual is also true for our institutions. This understanding of existential guilt will ultimately lead us to measure all institutions -such as business, the family education, the law, commerce and politics-by the degree to which they support the development of the human potential"

[Koestenbaum and Block, 2001:314]

Corporate transparency and integrity are currently hot topics, owing to the series of well-publicized failures in accounting practices and out-of-balance executive pay schemes. Members of core target groups are attacking corporate behavior and there is an increase in exposing of corporate double standards and hypocritical behaviors. The related stories to this category involve the erosion of confidence in multinational corporations and their brands, and there is wave of changing dynamics among the stakeholders that promise to impact the way business managers do their jobs and the criteria by which their performance is evaluated.

The big question, which arises here, is what is Corporate Social Responsibility and why is it so important?

The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts defines CSR as. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"

Corporate and the market forces impact people and their lives, as much if not more than government or regional and international institutions. Companies today are judged based on their brand, ethics and their financial consideration. This gives the relation as to why today companies target towards focussing on their...