Reasons for Companies Taking Part in Corporate Social Responsibility
Corporate Social Responsibility refers to the economic, legal, ethical, and discretionary expectations that society has of business entities at a certain period (Schwartz, 2017). From the definition, therefore, it is undisputable that corporations' social responsibility is not only limited to the legal requirements but also encapsulates other actions beyond the law that meet the discretionary expectations of the society. Many companies engage in corporate social responsibility to improve their brand and create a positive image of themselves to the potential customers, investors, business colleagues and media among others. The bible states that, “Therefore, since all these things will be dissolved, what manner of persons ought you to be in holy conduct and godliness” (2 Peter 3:11). From the verse, it is clear that companies need to focus on making positive contribution to the society and in return, they will enjoy many other benefits due to their good deeds. According to Tai, and Chuang, (2014), companies with a strong reputation attributed to excellence corporate social responsibility practice last longer.
The argument for Pursuit of Social Initiatives and for Business Primarily Exist to Maximize Profit
There are two different takes with regard to the social responsibility practices. One point of view support the social initiative for corporations while the other holds that business enterprises exist solely for profit reasons. The stakeholders’ theory argues that companies should meet the society discretionary expectations. On the other hand, the shareholders' theory that argues that corporations should only abide by the law and focus on the minimization of the shareholders' wealth and maximizing returns (Tai, and Chuang, 2014).
The concept of corporate social responsibility has a wider scope that includes ethical, moral, and philanthropic duties that go hand in hand with the ultimate goal of business entities of maximization of the shareholders' wealth and complying with legal terms. From the traditional perspective, businesses' primary responsibility is to the stockholders. However, from the CSR perspective, organizations are required to maintain the right balance between their duty to the shareholders and other entities such as the employees, clients, suppliers, the local community and the environment among other special interest groups that form the stakeholders' group (Schwartz, 2017). Meeti