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Costing Corporate Social Responsibility

Essay by   •  May 1, 2019  •  Research Paper  •  7,164 Words (29 Pages)  •  565 Views

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FACULTY OF COMMERCE

NAME                        :        MARSHAL

SURNAME                :        NYATSANZA

REG No                :        M184245

PROGRAME                :        BCOM HONS ACCOUNTING

LEVEL                :        2.1

COURSE NAME        :        COST ACCOUNTING

COURSE CODE        :        AC212

LECTURER                :        MR NYAKUWANIKWA                        

QUESTION                :        MANY AURTHORS ARGUE THAT SOCIAL                                                 RESPONSIBILITY AND BUSINESS                                                        PERFOMANCE ARE CORE RELATED. DISCUSS.

EXECUTIVE SUMMARY

Subject matter

The purpose of this write up is to discuss the view postulated by some authors that social responsibility and business performance are correlated. The shouldering of social responsibility by firms is an issue that continues to generate mixed considerations, debates and thoughts by different subsets of the corporate world and the academia. The proponents argue that, it fosters and promotes ethical behaviour by managers, and this has a positive impact on firm reputation. However, opponents of corporate social responsibility claim that it is expensive and inconsistent with the preeminent goal of maximizing shareholder return, and also not of great significant in developed countries. This write up will first examine corporate social responsibility, followed by financial performance and then pair them to examine the relationship between corporate social responsibility and business performance. After the main discussion, the writer will pass recommendations followed by the reference list.

TABLE OF CONTENTS                                                                      PAGE

1.0 INTRODUCTION

4

2.0 MAIN BODY

2.1 DEFINITION OF KEY TERMS

4

2.1.1 SOCIAL RESPONSIBILITY

4

2.1.2 BUSINESS ETHICS

5

2.1.3 BUSINESS PERFOMANCE

5

2.2 EXPLANATION OF CSR AND BUSINESS PERFOMANCE

2.2.1 SOCIAL RESPONSIBILITY

5

2.2.1.1 THE ENVIRONMENT

6

2.2.1.2 EMPLOYEES

7

2.2.1.3 CONSUMERS

8

2.2.1.4 COMMUNITY INVOLVEMENT AND DEVELOPMENT

9

2.2.1.5 CONCLUSION

10

2.2.2 BUSINESS ETHICS

11

2.2.3 BUSINESS PERFOMANCE

12

2.2.3.1 FINANCIAL PERFORMANCE

12

2.2.3.2 NON-FINANCIAL PERFORMANCE MEASURES

14

2.3 RELATIONSHIP BETWEEN SOCIAL RESPONSIBILTY AND

      BUSINESS PERFOMANCE

2.3.1 POSITIVE CORRELATION

15

2.3.2 NEGATIVE CORRELATION

16

2.3.3 NO CORRELATION

17

3.0 CONCLUSION

18

4.0 RECOMMENDATIONS

19

5.0 REFERENCES

20

  1. INTRODUCTION         

The shouldering of social responsibility by firms is an issue that continues to generate mixed considerations, debates and thoughts by different subsets of the corporate world and the academia. Businesses make up part of society and depend on it to attain their economic goals. While many authors argue that corporate social responsibility is not only a righteous obligation of firms but one that also comes with great benefits, some authors argue that, it is against the profit-making function of business, and that it does not even pay the firm any meaningful dividend to become socially responsible. Classical economists argue that a company’s only responsibility is to increase value for its shareholders. The social responsibility of business is to increase its profits, especially in the private sector. Some studies detect a positive relationship, while various others find negative, no or even curvilinear relationship between social responsibility and business performance. The main discussion follows after key terms are defined.

2.1 DEFINITION OF TERMS

2.1.1 SOCIAL RESPONSIBILIY

There is no agreed definition of what exactly is corporate social responsibility, so this raises the question of what exactly can be considered to be corporate social responsibility. According to Crowther & Shahla (2018:2), corporate social responsibility is a concept where by companies intergrate social and environmental concerns in their operations and in their interactions with their stakeholders on a voluntary basis. This implies that social responsibility is the commitment by businesses to behave in an ethical manner and contribute to economic development while improving the quality of life of the workforce and their families as well as the local communities and society at large. Saluja & Kapoor (2017:159) conforms that corporate social responsibility is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment.

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