Corporate social responsibility should be very important to any business. It allows a business to be in compliance with social norms that may not be illegal if not followed. According to Halbert and Ingulli (2012), “Most businesses will strive to be ethical in order to stay out of crisis management mode…” (p. 36). However Halbert and Ingulli continue to insinuate, that if the pressure is high enough for the bottom line to be more profitable, some business will forgo their social responsibilities. The most recent example of this is the 2008 financial meltdown. In this case, the investors at large banks put aside their social responsibility to project investments, instead of making larger profits for hedge funder managers and large corporate banks.
. There are a number of stakeholders involved in a corporate social responsibility. Each of which has a different interest. First of the stakeholders include the actual stock or shareholders. A business has a responsibility to ensure these individuals or originations needs are met, typically in a higher return on investment or dividends payout. Another stakeholder are the employees of the business. The business has a social responsibility to these employees in offering a safe and productive work environment as well as other benefits beside salary to ensure the employee is able to maintain a balanced life. Another stakeholder of the corporate social responsibility for the business is the community where the company conducts business. The business has a social responsibility to curtail any negative impacts to the community by either the manufacture or the sale of goods in the particular market.
Corporate social responsibility and economical responsibility are linked to one another. Corporate social responsibility allows for a business to conduct themselves in an ethical manner with all the stakeholders involved. Many believe that corporate social responsibility is in conflict with profit maximization, however, according to Kitzmuller and Shimshack (2012), “CSR constitutes an economically important phenomenon that may well be strategic.” (para. 1). Kitzmuller and Shimshack further explain that a business plays an important role in the development of an economy with products and services being offered to a community. But the other resources that are needed are typically provided by governments. These may be in the form of environmental or social needs to conduct business like roads and a strong and able workforce. The CSR may cost the business in funding local schools and construction of roads which may appear to have a negative impact on profits, however in the long run, this will produce a strong workforce that is able to meet business standards. With better roads and access the business will be able to reach further consumers and grow the business. What seemed to be a conflict between corporate social responsibility and economic responsibility is actually beneficial in the profit margin over long term.
Corporate social responsibility can also be a strategy that a business institutes as well. Halbert and Ingulli state “business is coming to understand that sustainability requires that it to attend to the triple-bottom line: profits, people, and the planet.” (p. 37). This understanding incorporates social responsibility into the corporate strategy. Most strategies already include a provision for profits; however as the business world changes, more and more thought is being given to people and planet. A business that does not look after its people or employees starts to lose profits. In the case of Wal-Mart, many people view the company as money hungry and not worried about its employee’s well-being as long as it can turn a profit. Wal-Mart recently lost a court battle and a case action suit was certified for over one million women for sexual discrimination. According to Goldman (2010), “If the case remains in the media, analysts say it could hurt Wal-Mart's image, something the