Describe the main principles of Corporate Social Responsibility and discuss the realities of such principles at times of recession and austerity

complete the task given to them) would not be adopted to manage within the military

system. Drucker believed that there a five basic operations in the work of a

manager. These are setting objectives, organisation, motivating and communication,

measuring and the development of people. All of these needs to be taken into

consideration when assessing management skills, external, general and internal

environment.

        The general environment has many influences and can be broken down into

PESTEL (political, economic, socio-cultural, environmental, legal). All of these have

a major impact on the business. In reference to the question, the recession has only

magnified these factors. E.g. With the economic instability that we face today, many

people have lost jobs, interest rates have dropped, and there is less GVA.

Consumers of the general public have less expendable outcome and most are

spending on what they need rather than what they want.

        There is one other environmental influence, the competitive environment. This

Includes the suppliers, substitutes, competitors and consumers. With the current

business market growing, with shops now not only on the high street but online there

are many alternative substitutes to a product and also competitors able to sell

products at a lower price therefore, giving power to the buyer with the option of a

choice to get the lowest price possible. Many consumers have now started going

straight to the source to get the lowest price, this is known as disintermediation. E.g.

Dell sells straight to the consumer therefore being able to offer lower prices.

        So having looked at what type of management skills are recognised within the

workplace and what environment effects the running of the business, the role of the

business must also be looked at. Is it to make as much profit as possible regardless

of any other factors? Must business ethics be taken into account? Milton Friedman

(1962) sees the business ‘to increase profits for the shareholders as long as it stays

within the rules of the game’. When looking at CSR within business, it is mainly

the basis on what decisions are made taking into account the ethical issues

that will be affected. The Body Shop founder Dame Anita Roddick has been quoted

to say "If business comes with no moral sympathy or honorable code of behaviors,

then God help us all." This implies that getting the foundations of what you start

correct, getting a brand that is known and trusted is vital regardless of what you are

trying to achieve. So what criteria is taken into account when making an ethical

business decision? Firstly, moral principles, these can differ within different parts

of the world. Societies develop rules that are usually respected and demand how

people live. If a decision is made and is embraced within the society then it is

ethically justified E.g. If a disabled person applied for a vacancy and was not

offered the job due to having to spend extra funds on making the premises disabled

friendly the manager would be acting unethically, as they would not be given an

equal chance. Secondly, Utilitarianism, this refers to finding out if the decision that

is being made is the best outcome for the greatest number.  In business it is never

going to be possible to fulfill the needs of all employees but making the decision

that is going to have a bigger overall effect would be the one favored. E.g. making

10 out of 200 workers redundant to keep the business going. Even though the 10

workers are heavily affected, if this had not of happened  then it may of resulted

in the closing of the business and the loss of all 250 jobs. Thirdly, Human Rights,

this is an view based on the idea that all workers have their own rights regardless

of their position of hierarchy. These rights can include working environments, free

speech, privacy as well as health and safety. Your employer has the right to monitor

communications within the workplace as long as you are aware of the monitoring

before it takes place. This can include emails, internet history and phone calls.

This all can differ dependent on the employer and the situation. Human rights

can be a sensitive subject within the workplace and the breach of these rights can

result in a severe results for both the employer and employee. Trade Unions are set

up to help protect the workers, give them advice on what steps they can take if they

are looking to take legal action against an employer or how they could try and

improve working conditions, wages and even holidays. Lastly, Individualism is

seen as the final piece of criteria on which ethical decisions are justified. It refers

to how the decision would affect each worker within the business and if it has a

positive effect, if a manager is making this choice then the effect on the decision

may have a negative impact on another worker. With these influences being

assessed with every choice there is a very small margin for error and for action

made the re-action must be held accountable for and must be taken into

consideration.

        Company policies need to be looked at in terms of what responsibility they

have within society. They have an economic responsibility, which in my opinion

is the key foundations to build a company on, that is to make money. Managers

use their skill set within a team to try and produce the highest results whilst using

minimum resources, in turn producing the highest percentage of profit for

shareholders. No other factors are taken into consideration with this choice.

They also have a legal responsibility, managers are expected to obey the law within

the company, sticking by the rules and regulations, and following guidelines that

effect the way a business is run. All companies are subject to legal responsibilities

and are required to follow the law, which impact organizations planning process. In

order to operate, a company must familiarize itself with external and internal factors

that govern the industry how the company is run. Managers also have an ethical

responsibility, this is not governed by law and has a great variation from company

to company. When fulfilling social needs within the market it can be seen to have

a positive effect with the local community.  This would have a knock on effect and

eventually help the business in the long term. The final responsibility in business

is the discretionary responsibility, this is how the company is giving back to society.

E.g. Tesco had a promotion where customers could collect tokens for local schools

to be provided with new sports and computer equipment. (Bateman and Stair, 2006)

found that a company can meet its social responsibilities by supporting important

causes and making charitable donations

        So why is it so important for these firms to act responsibly? As previously

stated, in today’s market the consumer has the power. Consumer boycotts can

have a catastrophic results, shutting businesses down, and severely damaging

reputations. This is why it is so important to concentrate on customer service and

offering all you can to help in every situation. Consumers will also think about

the way the product they are purchasing was made, if it has a fair trade symbol

and to what they are actually buying into. In reference to the question, the recession

has had quite an impact on this situation, whereas before consumers would

eggs from free range chickens due to being seen as an ethical approach, rather

than buying into caged chickens. With less disposable income available to the

consumer it may be the only affordable option.

        Without acting responsibly towards general rules in society, it can easily

bring about negative publicity. This can domineer the brand name and destroy the

reputation. The marketing side of a company must be ready to juxtapose the ideas

brought on by this unwanted attention and be able to promote the brand once again.

        After looking at many factors, policies and responsibilities within a business,

ethics would seem to hold the key towards a successful foundation on what to build

on. So how would a manager be able to affect a workforce and encourage a positive

practice? This can be done by setting an example to be followed by work mates.

rewarding staff when following guidelines set out to improve business and customer

service. Promoting a healthy, clean business is vital in today’s economical climate

and is a key part in the consumer market.

        Having looked at what the main principles of corporate social responsibility

are within business it clear to see what effects they have when coupled in a global

recession. With the consumer market at a stage where choice is everything, the

power to the buyer has never been stronger. With the options of alternative products,

at a lower cost, having a company that has a strong ethical background can prove a

vital point. With many households within the United Kingdom having less disposable

income and a decrease in job security the buyers are now choosing what they want

to invest in and looking after every penny that they are spending.  With many

companies struggling to support their business, those that have chose to build on a

foundation of core values are benefiting with the consumer choosing their product

over their rivals. After looking at many studies and assessing what I have found out,

it is clear to see for an organization to be successful these key fundamentals of

corporate social responsibility must be in bedded into the company.

Bateman, S. & Snell, A. (2007). Management: Leading and collaborating in a competitive world (7th ed.). New York: McGraw-Hill.