Business activities and operations are done within the context of an environment, business environment, therefore, is made up of stakeholders such as producers of a business primary raw materials, vendors/ suppliers, investors/shareholders, government/regulatory bodies, host community and adjoining communities in which business activity takes place, employees/management, and the product end-users or consumers.
The extent to which the organization interacts and impacts these stakeholders is the extent to which its prosperity and sustainability will be determined simply because corporate peace is needed for corporate survival.
It has been noted that corporate social responsibility to a reasonable extent reduces legal risk against non-compliance with government regulation on ethical business practices.
In addition, long-term business survival and profitability hinge on the acceptance of the business products and services by the consumer especially when they see the organization as part of their lives. Such acceptance is better promoted when the organization is seen as being socially responsible.
CSR boosts the confidence and trust of shareholders in their business when they realized that businesses are done in compliance with laid down rules and regulation, especially in an ethical way. Shareholders supports are readily available to businesses that are seen as likely to survive and remain in business for a long time.
The need for the protection of the environment, support for the less privileged in society and other courses that are outside the core operation of the business have endeared and moved small, medium and large businesses to enviable height in model history.
Although there are opponents of CSR, those who considered the CSR initiative as being a complete deviation from the primary objective of business which is to maximized profits. They argued that any commitment of the company’s resources to CSR should be considered a waste.
Their positions are hinged on the fact that companies pay taxes to the government and so it should be the responsibility of government to address issues of community development and other matters that are outside the business core mandate. In their views, they appeal that organization should conduct their business by honoring ethical values, show respect for people and their host community without deploying shareholders fund to such philanthropic activity.
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