Arguments for and against Corporate Social

Responsibility

Table of Contents
Introduction...........................................................................................................................................3
What is corporate social responsibility?............................................................................................3
Who are the firms socially responsible towards?...............................................................................3
Standing on CSR...............................................................................................................................3
Historical Background of CSR..............................................................................................................3
CSR in Bangladesh............................................................................................................................4
Nature of CSR.......................................................................................................................................4
Arguments in favour of CSR.................................................................................................................4
Protects the interest of its stakeholders..............................................................................................4
Long-term survival............................................................................................................................4
Self-enlightened regulations..............................................................................................................5
Resources..........................................................................................................................................5
Avoiding government fines and penalties..........................................................................................5
Arguments against CSR.........................................................................................................................5
Businesses run on profit....................................................................................................................5
Proper measurement of social benefit................................................................................................5
Cost-benefit analysis..........................................................................................................................6
Impact of CSR on the Triple-bottom Line.............................................................................................6
CSR in context of Bangladesh...............................................................................................................6
Reference list.........................................................................................................................................6
Introduction
What is corporate social responsibility?
Corporate Social Responsibility (CSR) means doing the business ethical ways. It means
taking accounts of social, economical, and environmental factors and consider human rights.
it can also involve many activities like working partners, local communities and how they
work.

Who are the firms socially responsible towards?

Companies and organizations are responsible toward their stakeholders and bondholders who
are its customer/clients, owners, beneficiaries, environment, and anything else that is affected
by its operations. It is consider that the main objectives of any company is to make profit and
maximize shareholder value. But they often forget that and think about their own benefits and
developments. Land, Labor, Capitals are the main factors that helps a corporation to have
business by providing its resources. There are also political, environmental and social factors
that effects them too in making profit or running successful business. Between those things
they also forget their main profit-making reason that is their main customers the people. That
is when the corporate social responsibility come in hand.

Standing on CSR
There are many reason why people dislike CSR. But in my opinion I am in favor of the CSR.
Why I am in favor I will discuss that in the later part of my report. Not only that I will also
reason with the advantages and disadvantages of CSR in my report too.

Historical Background of CSR

The CSR concept was proposed in 1950s, and it keeps evolving. CSR was defined in 1953 by
Bowen as “the obligations of businessmen to pursue those policies, to make those decisions,
or to follow those lines of action which are desirable in terms of the objectives and values of
our society” (Bowen, 1953). During that period CSR main definitions were intended to raise
awareness of stakeholder’s rights like labor right, consumer rights, etc. It was later developed
in the 1980s when company’s financial performances were evaluated using reputation as an
indicator. In the 2000s as the globalization began, it saw a massive development is CSR
practices and awareness all over the world. The European Commission has defined CSR as
the responsibility of enterprises for their impact on society (European Commission, 2017).
The European Commission believes that CSR is important for the sustainability of
businesses, competitiveness, and innovation of enterprises and the economy. It brings
benefits for risk management, cost savings, access to capital, customer relationships, and
human resource management. Companies can become socially responsible by following the
law as well as integrating social, environmental, ethical, consumer and human rights concerns
into their business strategy and operations. Since then CSR was viewed as a way of finding
balance between economic, environmental and social imperatives (“Triple-Bottom-Line-
Approach”), while at the same time addressing the expectations of shareholders and
stakeholders.

CSR in Bangladesh
CSR is a new concept in Bangladesh which was first introduced by the banking sector in
2008. First it only give assistance to various cultural events. But after 2008 CSR now hold a
great position in Bangladesh. CSRB is the organization that ensure the CSR practices in
Bangladesh. Its main objective is to become the main source of information and resources in
CSR in Bangladesh.

Nature of CSR
Corporation have responsibilities for society, environment, their employees and for most
people who are their potential consumers. They do this by their activity toward society by
their business activities mainly by investment in society. CSR is mainly variety of work
towards society, environment and economic pressure. CSR also ensure rules and regulation
that need to be followed by the corporation that is set by the government. They also ensure
different rights like labour laws and consumers rights. not only that they also help society by
various development like educational, infrastructure, health and so on. All of this future
results in the brand image that help the company to gain a lot amount of profit.

Arguments in favour of CSR

Protects the interest of its stakeholders
In the corporate society labour forces need protection which is ensured by this CSR. Also to
get help and support from the workers corporation discharge their responsibility towards their
employees. If a company think they are doing loss by fulfilling their responsibilities but in
reality they are making profit for the long run. Short term cost that the corporation are
bearing is actually the investment they are making in the long run.
Long-term survival
Corporation are powerful institution of a society. They hold a major position in the society.
So if they try to ignore their responsibilities towards the society which they need to full fill
than they are at risk of their survival. So in order to survive in the long run they need to full
fill their responsibilities towards society. Also they need to be loyal and truth-full to their
consumers to have a healthy relationship with the society.
Self-enlightened regulations
As the level of education is increasing and people are understanding business more and more
it is considered that corporation are the creators of society. They are the one who is working
for the cause of social goods. They do it by paying taxes to the government, giving fair wages
to their employees and most importantly giving the profit share to their shareholder who are
the main reason corporation exist.
Resources
Large companies are usually left with many idle assets which can be used for the social good,
hence by using these resources for CSR firms achieve maximum efficiency on using their
resources.
Avoiding government fines and penalties
Non-conformance to social norms may attract legislative restrictions. Government directly
influences the organizations through regulations that dictate what they should do and what
not. Various agencies monitor business activities. For example, Central Pollution Control
Board takes care of issues related to environmental pollution, Securities and Exchange Board
considers issues related to investor protection, Employees State Insurance Corporation
promotes issues related to employees’ health etc. Organizations that violate these regulations
are levied fines and penalties. To avoid such interventions, organizations have risen to the
cause of social concerns.

Arguments against CSR

Businesses run on profit

Corporation doesn’t have their own capital. They usually lend money from their shareholder
and run the business but when they make profit they give shareholder their part and the
remaining part use as the business run. So it is argue that government should look after the
society and its development. So the main drivers of society should be government not the
corporations.
Proper measurement of social benefit
People often think about the measure of the responsibility that a corporation should have in
the society. But it is quite impossible to know that what amount should the corporation invest
in social value, whose priorities are more shareholders or the society. This type of questions
makes it difficult for the corporation to practice CSR.
Cost-benefit analysis
Any social-benefit program where initial costs exceed the benefits may not be taken up by
enterprises even in the short-run.

Impact of CSR on the Triple-bottom Line

The Triple Bottom Line (TBL) is a concept that encourages the assessment of overall
business performance based on three important areas: Profit, People, and Planet. The TBL
dimensions are also commonly called the three Ps: people, planet and profits. We will refer to
these as the 3Ps. They are also known as the Financial Bottom Line, Social Bottom line, and
Environmental Bottom Line. Triple Bottom Line is most commonly used as a standard to
evaluate the sustainability of a business. As corporations are integrated with the 3ps therefore
corporations must ensure the development of TBL through CSR practices. The term
sustainability integrates social, environmental and economic responsibilities. Firms need to
reduce social cost by efficiently using their resources and using effective waste management.
The wastes of a firm eventually burden the very environment the firm operates, therefore
taking care of the discharge falls under the social responsibilities of the company. Through
CSR activities firms also try to minimize energy consumption like natural gas consumption to
reduce their costs as a result keep prices low. CSR also encourages firms to keep employees
satisfied to keep low employee turnover rate and high levels of employee performance.

CSR in context of Bangladesh

CSR is a concept which didn’t really develop in the corporate world of Bangladesh very well
although all the laws like labour law, consumer rights and many more were regulated by the
government. But now the look is changing as corporate world are becoming more attract
towards CSR as they know practicing CSR will help them in the long run. Full filling various
responsibilities towards the society is the investment they use as their long run profit. This
CSR practice not only bring out the brand image of a company but it also helps the company
to gain recognition among their potential consumers.
CSR can also contribute in the society by developing various activity. Like creating
employment, educational and health sector development, various infrastructure and many
more. This is more relevant to a country like Bangladesh where the government interventions
in these fields augmented by corporate alliance can go a long way in developing the
economy, society and environment.

Reference list

- (2016, August 9). Arguments in Favour and Against Corporate Social Responsibility
(CSR): Management. Retrieved from
https://www.businessmanagementideas.com/notes/management-notes/corporate-
social-responsibility/arguments-in-favour-and-against-corporate-social-responsibility-
csr-management/5315
- Nasrullah, N. M., & Rahim, M. M. (2013). CSR Practices in the Private Enterprises of
Bangladesh. CSR, Sustainability, Ethics & Governance CSR in Private Enterprises in
Developing Countries, 75–115. doi: 10.1007/978-3-319-02350-2_4
- Corporate Social Responsibility Practices in Bangladesh: A ... Retrieved from
https://www.davidpublisher.org/Public/uploads/Contribute/58a270bdc1f84.pdf