Is Corporate Responsibility That Important?

What is corporate responsibility (CR)?

It’s an obligation that a company contributes goodwill to the people, the community and the whole society; it links the business operation with ethical standard together. Corporate responsibility forces companies to take into account how dealing with customers, shareholders and employees will affect the community.

Profit Maximization or green operations?

A lot of businesses exist simply to maximize their profit; however, more corporations are aware of the importance about their impact and responsibility toward many critical environment issues nowadays, such as global warming, sustainability of scarce resources, child labor and some to name a few. A socially responsible company will implicate itself with long term social concern and take ethical values into consideration through its operation strategy. For instance, Starbucks, Dunkin’ Donuts and McDonald’s are willing to pay more money purchasing coffee beans from Fair Trade Growers. Despite the premium price, demand for Fair Trade Association’s products is still growing. The same thing is happening in the Organic Food industry: from the growth of sales, retailers have noticed that more customers are concerned about their health issues and support social responsible brands.

Then again, it depends on customers choices since the organic food is more expensive than ordinary food, and there are no certain laws to force corporations to do so. On the other hand, McDonald’s maybe needed to change its policy due to the pressure of stockholders and community. Actually, McDonald has strictly sustainable standard for New Zealand hoki fish, (one type of white fish that McDonald used to make fish sandwiches). According to Lisa McComb of McDonald's, approximately 15 million pounds of hoki fish disappear every year. The problem here is: should McDonald keep catching this kind of fish or find other sustainable replacement?

Protecting our environment and improving the quality of life is a responsibility that everybody bears. However, I believe that corporations can contribute more in terms of social responsibility since the decisions or policies they make will affect the behavior of more people in the world. Indeed, nowadays, many organizations have adjusted their strategy into green focus; “Green Plan” seems to be an unavoidable trend in most of the business world. For example, Johnson & Johnson introduced new energy facilities to reduce the greenhouse gas emissions. Coca-cola has invested a big amount of money to improve global water conservation, and other well-known companies like Microsoft and Wal-Mart are putting efforts into saving world-wide energy consumption, which also reduces the electric cost of the company. Customers are happier to buy products from companies they trust, and when they see labels such as: "this product was not tested on animals,” “this package is made from recycle material” or “please enroll in the paperless bill program to help save more trees on earth”. Indeed, CR indirectly helps companies to build reputations for their brand names, strengthen their bonds and create loyalty with consumers and social communities.

From my perspective...

In my country, the Taiwan Power Company offers a utility discount policy for monthly bill since July 2009. In order to encourage customers to save electronic power energy, the company will give each family 5% discount if the power usage remains the same compare to last month, 10% discount if the family save power usage 5%-10% compares to last month, and 20% discount if the family save more than 10% power usage compare to last month. This new policy actually works very effectively in Taiwan. My family owns a small restaurant in my hometown, years ago, we always provide our customers with disposable chopsticks and spoons for its convenience and sanitation reasons, but also create tons of unnecessary waste every day. As a result, we stopped providing our customer with disposable chopsticks and plastic bags. Instead, we give them re-usable plastic bags and washable steel-made chopsticks. And guess what? We gain more loyal customers after we change our small business into an eco-friendly restaurant. I believe being a responsible corporate can help to increase the future businesses competitiveness.

There is however, a difference between corporate social responsibility and corporate responsibility pertaining to law. Have you ever thought about the warning images and phrases in cigarette packages account for the tobacco makers’ social responsibility? As we can see anywhere “WARNING: Smoking Causes Lung Cancer, Heart Disease, and May Complicate Pregnancy. “ Ironically, If you really quit smoking because of the warning on cigarette package, those tobacco manufactures are going to be very disappointed since they lose your business. For them, the warning image and message on cigarette package is just a way to tell the government and anti-smoking organizations that: oh, yeah, we have fulfilled our corporation responsibility. Corporate social responsibility should be that of which corporations take on willingly and not mandated by law, as per the example above.

Reference:

Business ethics:

http://business-ethics.com/

News and issues related to CRS:

http://corporate-responsibility.alltop.com/

McDonald hoki fish:

http://www.dailyfinance.com/story/the-sad-little-hoki-fish-inside-your-filet-o-fish-sandwich/19158649/

Taiwan Power Company:

http://www.taipower.com.tw/indexE.htm/

Wikipedia:

http://en.wikipedia.org/wiki/Tobacco_packaging_warning_messages/

Videos:

The website about CRS: http://3blmedia.com/theCSRminute