Critical Essay Assignment Sample
CRITRICAL ESSAY ON THE CREDIBILITY AND ACCOUNTANILITY OF CORPORATE SOCIAL RESPONSIBILITY (CSR) REPORTS
Introduction
CSR is one of the most important parts of a business organizations as it takes a huge number of responsibilities and helps organizations to be sustainable. Hence, corporate social responsibility or CSR reports play a crucial role in business operations to engage customers and shareholders with companies ideas and make it understandable to its readers. Apart from that, these kinds of reports need to involve truth and sincerity. CSR reports are important to communicate within an organisation in an effective way, as it helps to maintain a good work environment and community. On the other hand, it is important to achieve organisational goals and objectives. Business plans and efforts also use to be included in CSR reports, which reflects its significance. More specifically, CSR reports are important to companies as they can help them to estimate the influence of their activities on the community, society, and environment.
Body
In accordance with the study of Lee et al. (2019), the concept of corporate social responsibility (CSR) report highlights the performance of an organisation on adapting to the environmental and community based actions. Thus, it has been seen that organisations from all around the globe have been focusing on emerging a positive CSR report as it enhances the brand image among the consumers and shareholders (Glonti et al. 2020). Thus, a CSR report mainly includes information regarding corporate accountability of an organisation beyond making profit and revenue for their shareholders. CSR reports, therefore, include every necessary information which the company involves with in relation to society, planet, environment and economy. In other words, this reports indicates the accountability of the company towards employees and community members (Singh and Misra, 2021).
García‐Sánchez (2020) has mentioned that CSR reports is a framework, which is being initiated by companies to take action or communicate with their desired goals, end results and efforts to their specific internal or external stakeholders. Whenever, a specific organisation is successful in achieving their CSR efforts, the reports based on their initiatives of CSR efforts highlights to be a communication tool, as it becomes more of a promotional strategy or a public relation event. Thus, it enables the company to create a positive impact on the stakeholders as well as highlighting the achievements and enhancing the concept of social responsibility into the identity of their business. According to the study of Asiaei et al. (2021), CSR creates a positive impact among the consumers, shareholders and the employees of the company, which ensures positive growth of economic performance and enhancement of workforce performance of the organisation. Hence, the CSR report of an organisation highlights the social responsibility policies. The influence of the industry, firm level, format, and other factors are reported with credibility (Glonti et al. 2020). Moreover, voluntary standardization further found affecting credibility of CSR report in a positive manner; however, the impact is not be the same in case of regulation. It is even found that in order to increase the level of credibility in a consistent manner, policy makers in different regions around the globe are creating a certain level playing field in CSR reporting regulation. Thus, it can be stated that standardization and content present in the CSR report that mainly matters apart from external influences.
As per the studies of Bizri et al. (2021), every organisations whether its, small, medium or large are liable to follow the standards and regulations set by Global Reporting Initiative (GRI) and national governments. In accordance to such regulations and standards it is necessary that organisations mention about impacts of the business on environment, economy and people in order to increasing transparency about their contribution towards sustainable development. Specifically these standards of GRI are further being categories under three sections that include Universal Standards, Sector Standards and Topic Standards to make and an easy-to-use set of modules (Global Reporting, 2022). For example, McDonald’s has been initiating corporate social responsibility with relevant efforts in their restaurants all over the world. The company publishes the CSR report annually along with their annual report that generates every necessary information related to company’s initiatives towards sustainable development. Indeed, the company adopted methods for recycling, reuse and reducing waste products as a CSR initiative. As a result, the company has initiated 85% of renewable resources for their packaging products as well as 89% of their restaurants utilising recycled cardboard boxes. The CSR policy of McDonald’s ensures in increasing the value for their shareholders and initiating actions on social and environmental challenges which result in delivering a positive impact on the stakeholders (Hommerová et al. 2020). Apart from this, McDonald’s has developed the Ronald McDonald House Charity in 1974 and is serving globally to support the community towards betterment. Presently, the charity house has been serving in 260 Chapters in 65 countries around the world (Mcdonalds, 2022). It also focuses on enhancing the employee engagement within the organisation. As per the report, it has been seen that employees of a company tend to perform more effectively while they take part in social activities. Thus, the CSR resorts of a company highlight the positive attributes of an employee or detect beneficial talent within the organisation which enables the company to engage a positive team leader for better workforce performance.
A positive CSR report attracts new talented employees to work for the company as it has a good reputation or valuable brand image in the market (Rasoolimanesh et al. 2021). It enables the company to attract the suitable candidates for their desired job positions in the workforce. The credibility and accuracy of a CSR report has major impacts on the business as it highlights the initiatives that a company takes for corporate social responsibilities which has major impacts on their brand image and values (Lee et al. 2020). In addition, the CSR report of an organisation consists of the sincerity, stakeholder specificity, and credibility of truth. Hence, the CSR reports of the company can prove to be beneficial as well as it can also hamper the reputation or image of the brand within the competitive market. As a result, companies have proven to get development from CSR reports as well as there are companies that have negative downfalls based on their CSR reports.
Within activities of CSR, communication has a separate significance as it plays a vital role in business activities. Most companies nowadays are noticed to reflect their CSR initiatives through their mission statement (Tourky et al. 2020). This kind of activity has been reflecting respective organisational business efficiency as mission statements can create a core identity of the company and it is important in the process of decision making. This reflects that companies have been using this activity as a process of indirect communication to highlight their concern over the environment, society and community welfare (Chu et al. 2020). Even it has a great impact on the reputation of an organisation. It is evident that CSR and the mission statement of organisation has an interrelation as most companies are using mission statements to reflect CSR. For example, Unilever, one of the giants of the consumer goods industry has taken this kind of strategy to reflect its core idea of CSR by its mission statement.
According to the organisational evidence of Unilever, its corporate mission is “to add validity to life” (Unilever, 2022). It eventually reflects that the company has taken the significant initiative to fulfill the needs of personal care, hygiene, and nutrition of its consumers. The company has a motto to help customers to look good, feel good, and achieve more in life. Above mentioned mission statement of Unilever reflects its CSR goal with a subsequent focus on respective consumers. It can be indicated that the organisation has been using this kind of strategy to reflect their commitment to customers in an effective way and to describe the efforts made by Unilever for improving society and helping people to get more in life (Chernobay et al. 2020).
In order to discuss the significance of CSR within an organisation, the triple bottom line theory can be evacuated (Refer to appendix 1). This theory highlights a business concept that reflects that companies should be committed to measuring their environmental and social impacts (Elkington, 2018). Moreover, they should be more active to take social responsibility rather than focusing on only profitability. The theory focuses on three Ps, which are Profit, People, and Planet. Firms use to make strategies to increase their profit margins by business activities and with help of CSR, they can make these strategies in a better way as it will not only focus on aspects of profits but also on the aspects of society and environment. Along with that, the theory shows companies should be active to measure their impact on society, which can impact their reputation and profitability. For instance, as Unilever has taken strategies to take social responsibilities to improve the environment and planet, its brand reputation has been increased (Michael et al. 2019).
The above discussion is reflecting the necessity of CSR reports in the growth of a business organisation. Moreover, CSR can be seen as a medium of reflecting the commitments of an organisation to its customers. Although the commitments have to be oriented to the society, community, and environment. (Christensen et al. 2021). Hence, organisations use to include their strategies for sustainable development in the reports of CSR. Even companies used to focus on reflecting their CSR strategies within their mission statements. This also helps them to educate their customers about the social and environmental goals. For these kinds of advantages, companies are making efforts to be innovative and make the planet better by doing good. On the other hand, CSR reports help them to maintain transparency within the company and provide a good working environment to employees (Christensen et al. 2021).
Amazon, one of the giants of the e-commerce industry, has been taking strategies to improve the society, community, and the planet by its CSR activities, and the CSR reports have been playing a crucial role in that. The website of Amazon reflects that the company aims to become the most customer-centric company in the world (About Amazon, 2021). Hence, it is taking initiatives to continuously raise the bar of consumers’ experience by using updated technologies and the internet. On the other hand, it has been taking initiatives to help customers to discover and purchase anything according to their requirements. Apart from that, the CSR report of Amazon shows that, as the company is operating the business in the industry of entertainment digital distribution, it has taken initiative to help content creators in maximising their success. It is evident that CSR reports of the organisation have been helping it to act in achieving organisational goals and be sustainable in the industry (Christensen et al. 2021). On the other hand, as the mission statement of the company reflects its CSR, customers can get to know about its efforts to be the most customer-centric company that impacts its sales growth (Refer to appendix 2). Apart from that, the sustainability report of Amazon shows its concern about customers and the planet (About Amazon, 2022). This also reflects the company’s belief that its missions are important for the UK as digital empowerment can help customers to increase their living standards. On the other hand, it can help to increase the productivity and competitiveness of the company, which are required to be sustainable in the global marketplace.
In order to provide evidence regarding the importance of accuracy and credibility of the CSR report, an example of Tata Consultancy Services (TCS) can be provided. The organisational website of TCS reflects that it has taken a strategy to reflect its CSR within its mission statement. The mission statement of this company reflects that it is not only focusing on providing products that meet customer expectations but also focusing on continuous improvement. The company plans for continuous improvement of products, processes, services, and people. This reflects the organisation is taking steps to improve the society, community, and the environment. The CSR report of TCS reflects that it has a goal to empower committees through actions (TCS, 2022). More specifically, TCS has taken the initiative to empower people through its ethical governance, and CSR programs. Apart from that, the CSR report shows the company’s focus on corporate sustainability by taking environmental initiatives. It has even increased the radius of responsibility with an objective to increase sustainability, which helps the company to impact deeply on the community. Most importantly the company has been focusing on Digital Entrepreneurship, in order to improve the condition of rural parts of India (TCS, 2022). This can be considered as evidence that the company has been taking CSR with aims to develop community and society. On the other hand, this kind of strategy has been impacting the brand image of the organisation and increasing its image as an employer brand. As per the evidence of the CSR report of TCS, it can be said that the company is able to disclose the accuracy and credibility of the CSR report.
McDonald’s is one of the world’s largest restaurant chain industries, which has been serving 69 million customers on a daily basis on the restaurants that are based in 100 countries (Mcdonalds, 2022). The organisation states that fulfilling corporate social responsibility is a crucial part for the success of the company. Thus, the company report has highlighted that maintaining and fulfilling the aspects of social responsibilities, maintaining a positive relation with the society or the local community, and focus on the demands or expectations of the society ensures positive impact on the organisational performance (Patel and Misra, 2021). The CSR report of McDonald’s has derived from the relationship with the society and stakeholders.
According to McDonald’s, the company supports more than 50,000 families all around the U and since 1989 they have raised over £85 million against the Ronald McDonald House Charity (RMHC, 2022). In the year of 2017, collection boxes of McDonald’s have provided a donation of around £3 million to the Ronald McDonald House. These collections have been gathered from the sales unit of the company in different McDonald’s restaurants around the UK. Apart from this, to improve the community, McDonald’s in 2019 introduced a new way to process donations from customers to their Charity through kiosks. Customers who were ordering from kiosks donates around a pound or provide a set donation of 1p, 10p and 20p in respect to their order (RMHC, 2022). Thus, based on this McDonald’s have claimed that 100% of the total collection through donation are transferred to Ronald McDonald House Charities UK (Refer to appendix 3).
With the reports of CSR, business organisations use to publish their responsibilities which include city, environment, and community. Though it can be said that the history of some companies reflects how they had made false CSR reports. In order to provide evidence of a false CSR report an example of Coca-Cola can be drawn. According to the company website of Coca-Cola, it has been operating in the beverage industry with the purpose of refreshing the world and making a difference (Coca-cola company, 2022). The vision statement of the company reflects that it is determined to craft its brands as it can help people to refresh their bodies and spirit. On the other hand, some evidence reflects its negligence in order to fulfil these kinds of commitments. For example, the CSR report of the company says that it has been focusing on sustainable packaging and it reflects the company’s focus on creating “a world without waste”. On the other hand, according to the lawsuit, this is misleading people (LOFTUS-FARREN, 2021). The organisation’s mission statement reflects the company has not been focusing on sustainable development but the real picture is different.
In order to provide another evidence of a false CSR report, the Volkswagen scandal can be discussed. The Environmental Protect Agency or EPA found that many cars of this company sold in America had a “defeat device” or software and at the time of testing that was being detected. Even the organisation was also being accused by EPA for modifying software on three-litre diesel engines. On the other hand, in November that year, the company stated that it had found “irregularities” for testing measures of “carbon dioxide emission level”. The company has admitted to cheating emissions tests in the United States (Hotten, 2015). On the other hand, the mission statement of this company reflects a slogan of “Drive bigger”, it also means that the company has made promises to provide a great service to customers where the real picture was entirely different (Volkswagen AG, 2022).
Above mentioned evidence reflects that companies can use false CRS reports to increase their sales and reputation. It is evident that CSR activities are important organisational growth and CSR reports take a vital part in that. Although it can be said companies have to maintain accuracy and authenticity while publishing CSR reports because it is related to sustainable development and can impact society and the planet. Moreover, GRI Standards and other regulatory structure are need to be followed by every individual organisation irrespective of the size in order to maintain transparency and follow authenticity.
Conclusion
CSR is one of the core parts of business organisations as it is related to the impact of the company on society, community, and environment. Hence, companies use to publish CSR reports that include activities for their sustainable development. Most international companies use CSR within their mission statement and try to achieve that by their operational activities. Therefore, the CSR reports need to be accurate and credible. For instance, companies like Amazon, TCS, and McDonald’s are being able to meet their goals to improve the environment, as they stated in the reports of CSR. On the other hand, there are some companies that are accused of publishing false CSR mission statements. For instance, Volkswagen and Coca-cola have been found to mislead people with their false CSR reports.
References
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