Basically companies create new forms of business to address social or

Basically companies create new forms of business to

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Basically, companies create new forms of business to address social or environmental challenges that will lead to financial returns in the long run. One example can be seen in Unilever’s Project Shakti in India. The authors describe that the company hires women in villages and provides them with micro-finance loans to sell soaps, detergents, and other products door-to-door. This research indicates that more than 65,000 women entrepreneurs are doubling their incomes while increasing rural access and hygiene in Indian villages. Another example is IKEA's People and Planet initiative to be 100% sustainable by 2020. As a consequence, the company wants to introduce a new model to collect and recycle old furniture. Reduced scrutiny Corporations are keen to avoid interference in their business through taxation and/or regulations . A CSR program can persuade governments and the public that a company takes health and safety , diversity and the environment seriously, reducing the likelihood that company practices will be closely monitored.
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26 Supplier relations Appropriate CSR programs can increase the attractiveness of supplier firms to potential customer corporations. E.g., a fashion merchandiser may find value in an overseas manufacturer that uses CSR to establish a positive image and to reduce the risks of bad publicity from uncovered misbehavior. Creating shared value Non-governmental organizations are also taking an increasing role, leveraging the media and the Internet to increase the visibility of corporate behavior. Through education and dialogue, the development of community awareness in pushing businesses to change their behavior is growing. Creating Shared Value (CSV) claims to be more community aware than CSR. Several companies are refining their collaboration with stakeholders accordingly. Public policies Some national governments promote socially and environmentally responsible corporate practices. The heightened role of government in CSR has facilitated the development of numerous CSR programs and policies. [98] Various European governments have pushed companies to develop sustainable corporate practices. [99] CSR critics such as Robert Reich argued that governments should set the agenda for social responsibility with laws and regulation that describe how to conduct business responsibly. Regulation Fifteen European Union countries actively engaged in CSR regulation and public policy development. [99] CSR efforts and policies are different among countries, responding to the complexity and diversity of governmental, corporate and societal roles. Studies claimed that the role and effectiveness of these actors were case- specific The variety among companies complicates regulatory processes. Self-regulation allows each corporate actor to balance profits and social responsibility without cumbersome governmental involvement. Studies suggest that mandated CSR distorts the allocation of resources and increases the likelihood of irresponsible decisions.
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