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Starbucks and Nike. Do you believe CSR is core to the objectives of large PLCs or should it remain peripheral? Justify your opinion with evidence. Compare and contrast different PLCs where possible.

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Introduction

* Do you believe CSR is core to the objectives of large PLCs or should it remain peripheral? Justify your opinion with evidence. Compare and contrast different PLCs where possible. Corporate Social Responsibility (CSR) is an integral part of shaping a company's aims and objectives, as well as setting stakeholder priorities. Corporate Social Responsibility may seem self-explanatory, in its' definition of a company's responsibility to serve the communities in an ethical manner; however there are many parts of CSR, such as serving the local community, benefitting employees and help reduce damage to the environment. Corporate social responsibility is the concept coined to describe how organizations now consider the welfare of the people by being responsible for the impact of their activities on all groups of people involved and affected by their business, e.g. their employees, customers, stakeholders. Many businesses have taken CSR very seriously that they have gone beyond "following laws", and do more than being "responsible". ...read more.

Middle

shareholders' investment; however they still keep in mind their Unique selling point, which is to serve the community through good community relations and helping the environment. However this approach to keep the customers, employees and environmentalists happy can have many short term drawbacks. For e.g. paying the employees in accordance of their hard work is more expensive than to cut down on costs by paying employees wages just over the minimum wage. Starbucks do this as they do more for their farmers in Africa and Mexico than Faitrade (see source E) according to research firm thinktank. They also run many community events, which also takes money out of their capital, which in the short term may be seen to reduce profit. Nike has become one of those global companies targeted by a broad range of campaigners and journalists as a symbolic representation of the business in society. In Nike's case, the issues are those of human rights and conditions for workers in factories in developing countries. ...read more.

Conclusion

We can see that sales nearly halved, meaning customers started to lose trust in their products, which reduced income severely, as a result of the customers finding out about Nike's non ethicality. Nike also had to spend hundreds of millions trying to rebrand itself as a people friendly company. From rebranding itself as a CSR company Nike, and Starbucks now share many long term benefits such as better motivated workers as a result of higher pay, meaning higher production rates. The government also starts to help CSR companies to set a good example for other companies, and both other companies and the government can trust to do deals with them as they are both ethical companies. It seems that having CSR as core to a company's objectives boosts sales , and companies that rely on sales to the public especially need to improve their companies' reputation as an ethical company. This is important because as the Nike and Starbucks case studies show, profit may be the ultimate aim, the short term objectives need to be based around CSR, as in the end that is what pleases most of the stakeholder, increasing production and sales. ...read more.

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