ACCO1145 | Corporate Governance | The Corporate Social Responsibility

Critically analyse the observation that a determining factor in most corporate scandals is not the lack of corporate social responsibility policies, but the absence of an appropriate corporate culture.

Introduction:

From last few decades the concept of the Corporate Social responsibility has continued to grow in context of the importance and significance of the organization. It has been the subject of the considerable debate, commentary, theory, and research. The basic idea of the corporate social responsibility is to provide benefit to the society instead of only caring about the shareholders of the company.

Debate on the topic of CSR has been conducted from many years, and there are number of authors who present the arguments in both support and against the CSR. These arguments have been discussed in this paper and also the role and importance of CSR in the organization (Ryan, 2018).

On the other hand, corporate culture of the organization is considered as an umbrella which shared the practices as well as the values of the organization’s employees. Corporate culture mainly includes the guidance which describe how the employees of the organization act and feel. Corporate culture mainly describes the thinking of the employees, and also the reasons behind their actions. In other words, corporate culture is considered as the social and psychological environment of an organization. It mainly reflects the differentiate personality of the organization and also expla

This paper critically analyse the statement “corporate scandals is not the lack of corporate social responsibility policies, but the absence of an appropriate corporate culture”. Lastly, brief conclusion concludes this paper.

Discussion:

In present world, social media is so strong that in case corporate culture of the organization is not that much strong then people find it quickly. As there are number of people which use the social media for the purpose of expressing their positive or negative thoughts in context of the products, services, and overall brand.

In the present environment, strong corporate culture is important for the purpose of ensuring the success of the organization. A great corporate culture not only attracts the maximum candidates in the organizations, but also helps the organization in accelerating the performance of the existing employees of the organization (Jaakson, Vadi & Tamm, 2009).

If employees of the organization works in the positive and supportive manner, then they will get motivated for the purpose of performing their job in well manner, and for achieving the both individual as well as organization objectives. Corporate culture is the wide concept as compared to the corporate social responsibility and cover number of aspects in its ambit.

It must be noted that, corporate social responsibility is considered as the important concept for the organization, but corporate culture is the necessary concept and without it no organization can survive for long term. In other words, corporate culture is important for ensuring the sustainable operations of the company.

It must be noted that, each and every organization have different types of culture such as there are number of organization in which day to day behaviour of the employees is guided by the management and also the performance of the business organizations and functions of the organization. Conducting their operations in silos, these subcultures are usually not well understood by the employees and management, and this is the reason they fail to work in coordinated manner. It must be noted that, lack of alignment is the basic reason of the corporates failures and this can be seen in the BP oil spill in the Gulf of Mexico or the issue related to the reception after the launch of the Apple's iPhone 4 (Brien, 2010).

Commitment of the organization in context of its core values generally result in inconsistency and worst opportunistic. After conducting the study of the Booz Allen which is conducted after the ethical breaches conducted by the company and also by the billion dollar lawsuits and fines in terms of the legal and regulatory violations, it becomes clear that this corporate failure is the result of the bad corporate culture. Executives of the organization accepted that they personally feel the pressure to reflect the personal values.

On the other hand, corporate social responsibility impose obligation on the organization to ensure the well-being of the society and environment also. It mainly focus on the organizations obligation towards other stakeholders also, and not only towards the shareholders of the company (Carroll & Shabana, 2010).

However, corporate social responsibility is the concept which is directly influenced from the corporate culture of the organization. In other words, it is not possible for the organization to ensure effective CSR practices with the bad corporate culture. It can be said that culture of the organization is rooted in its value, and these values are generally flow from the effective leadership. Culture of the company includes number of areas, as it also includes the work environment of the organization, its expectations, and objectives. CSR is only one of the core values of the organization, and any culture which includes the attributes of the CSR ensures profitability as well as long term survival of the organization. Generally, management and leaders of the organization play very important role in the corporate culture of the organization but it must be noted that corporate culture is not only influenced by the top management but only but it is also influenced by the middle management.

There are number of studies which shows that particular values must incorporated in the corporate culture of the organization and these values are transparency, ethics, fairness, equality, coordination, etc. It is clear from the above facts, that it is not possible for the organization to comply with the CSR, if their corporate culture is not effective. It can be said that there is strong relationship between the CSR and corporate culture of the organization.

As stated corporate culture is the necessary part of the organization, and an effective corporate culture helps the organization many ways such as it builds good reputation of the company, ensures CSR, etc.

Good corporate culture ensures the employer brand, which includes mission, values, and culture. It is important for the reputation of the company, because effective corporate culture reflect good image before the world. God reputation of the company not only ensures the retention and engagement of the existing employees, but also attracts best talent towards the organization. Therefore, it can be said that employer’s brand is the necessary part of the organization’s employee value proposition or EVP. In other words, it reflects the reason because of which people like to work for the organization. It is necessary for the organization to develop the strategy for the employee brand, as it also helps the organization in getting the competitive advantage to the company over its competitors. For the purpose of framing the effective employer brand policy, organization needs to evaluate its current position in terms of reputation in the market. Organization also needs to determine the strengths, and use social media for the purpose of highlighting the positive aspects of working for the brand.

Effective corporate culture also ensures the employee engagements, as it demonstrates the employee emotional attachment towards the organization. It must be noted that, engaged employee not only care about their individual goals but also care about the company’s objective. It is clear from various studies, that there is direct relation between the productivity and happiness of the employees. It is clear from various studies that happy employees show more productivity in the organization as compared to the unhappy employees. The basic obligation of each and every organization is to make investments in the engagement measures of the employees for the purpose of ensuring the productivity, increase profits, and stay competitive. There is no doubt that more engaged employees of the organization will ensure higher standard of services and also the higher customer satisfaction rates in the organization.

As stated human resource capital is the most important capital of the organization, and if above stated facts are adopted by the organisation then definitely there are happy employees. Ultimately it reduces the chances of the corporate failure (Hakala, 2015).

Good corporate culture also ensures the professional development in the organization as it helps the organization to ensure growth in their respective fields, and also build paths for the future promotion of the organization and also provide career advancement opportunities to the employees of the organization. Professional development includes number of aspects such as specialized training, formal education, and informal learning opportunities. In other words, organizations can invest their time and resources in the training and career development for the purpose of ensuring the better trained employees with the clear objectives related to the job performance and personal development.

After considering the above stated facts, it is clear that through above stated measures, organization can ensure happiness and satisfaction in their employees, and any happy and satisfied employee can contributes 100% towards the organization (Deng & Hu, 2010).

In present climate, organizations must consider their impacts of their operations on the society and environment. An organization must focus on the well-being and advantage of the world, and not only the simple profit maximization. Organizations must put the welfare and interest of the community first, and the organization for the same is widely respected in the market for its integrity and dignity. A wide respected organization attracts best and better employees.

After considering the above facts, it is clear that corporate social responsibility is the narrow concept as compared to the corporate culture, but there is strong relationship between the CSR and corporate culture (Adams, 2010).

Conclusion:

Corporate culture is the most important attribute of the organization as it ensures both corporate success and long term survival of the organization. Corporate culture of the organization is considered as an umbrella which shared the practices as well as the values of the organization’s employees. Corporate culture mainly includes the guidance which describe how the employees of the organization act and feel. Corporate culture mainly describes the thinking of the employees, and also the reasons behind their actions. Corporate social responsibility is the concept which is directly influenced from the corporate culture of the organization. In other words, it is not possible for the organization to ensure effective CSR practices with the bad corporate culture.

References:

Adams, S. (2010). Company Culture and Corporate Responsibility. Available at: https://www.forbes.com/sites/susanadams/2010/09/17/company-culture-and-corporate-responsibility/#1636cb9838dc. Accessed on 30^th June 2018.

Brien, S. (2010). Is There a Culture of Secrecy Behind Corporate Responsibility?. Available at: https://www.csrwire.com/press_releases/30528-Is-There-a-Culture-of-Secrecy-Behind-Corporate-Responsibility-. Accessed on 30^th June 2018.

Carroll, A. & Shabana, K. (2010). The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice, International Journal of Management Reviews, Volume 14(3).

Deng, L. & Hu, Y. (2010). An investigation of the relationship between corporate social responsibility and organizational culture, Second International Conference on Communication Systems, Networks and Applications, Volume 23(2).

Hakala, S. (2015). Corporate social responsibility and organizational culture in corporate restructuring. Available at: https://stud.epsilon.slu.se/8559/7/Hakala_S_150904.pdf. Accessed on 30^th June 2018.

Jaakson, K. Vadi, M. & Tamm, K. (2009). Organizational culture and CSR: an exploratory study of Estonian service organizations, Social Responsibility Journal, Volume 5(1), pp.6-18.

Ryan, L. (2018). Why Company Culture Goes Bad -- And How To Fix It. Available at: https://www.forbes.com/sites/lizryan/2018/01/27/why-company-culture-goes-bad-and-how-to-fix-it/#6e10fb902f6d. Accessed on 30^th June 2018.