Change in business world today

1.0 Introduction

Globalization, competitive pressure, and quest for productivity have been a major driver for change in business world today. Activities of people in the business world have led to different problems and interests within business cycle. Many companies used Corporate Social Responsibility (CSR) as a framework to consider the interest of all stakeholders in the business environment. CSR contribution of many businesses can be viewed with different meaning and culture, in the United State is like charity model but in the EU member states, it is part of core business activities in a socially responsible manner for companies operating within Europe.

United Kingdom (UK) government’s policy on CSR was as a means to crack down on irresponsible business behaviours and to raise contribution of companies toward CSR above minimum legal standards. Many multinational companies operating in Europe make special annual CSR reports; companies like Tesco and Marks & Spencer but some companies like Lidl do not account for it. Companies that make provisions for CSR pay serious attention to it and even compete with each other to show their contribution towards CSR, in order to display their commitment as responsible companies. They make sure that CSR is the pivotal point for their core business activities, which serve as a centre message to outside world. Moreover, their CSR capture the interest of all stakeholders (stakeholders- shareholders, employees, customers, suppliers, business partners, pressure groups, and government) as appropriate.

There is general controversy on CSR to be part of core activities of any organisation by leading scholars like British Economist David Henderson. Many multinational companies were seriously criticised with their CSR policy as an avenue for increasing profitability in long run. There are two sides to these arguments on CSR; the argument against CSR was that it is a new way of deceiving and exploiting people while the argument in favour of CSR was that it is a best way for a responsible company to give back to the society where it operates. Another problem associated with CSR campaigners like Friends of the Earth is that those who make effort to publish their CSR contribution annually (like Tesco) was not free of criticism like those who does not publish anything on CSR (like ISS UK). This raises major question in the mind of people; is there any acceptable threshold in place to determine companies’ contribution on CSR?

It is very difficult for most of these multinational companies to convince public that their CSR contribution is solely for sustainable development without marketing motive behind it. However, the CSR contribution provides by ISS UK may have different motives attached to it base on implementation. Some of the CSR contributions of ISS UK can be viewed as a marketing tool because it create more marketing promotion for the company than the benefits derived from it by the beneficiaries. For example, ISS UK boldly prints their name on any goods given out either as charity or to their staff. The benefits that the company derive from this action in term of recognition and brand image outweigh its benefits to the recipients. Moreover, the company have moved far to convince the public about its CSR contribution as a pure sustainable development programme by joining Business in the Community (BITC) – a leading responsible business organisation.

1.1 Aims

The dissertation will critically evaluate the position of academic scholars regarding CSR contributions and the various reputation ratings, and outline different meanings attached to sustainable development. Moreover, it will examine the statistical relationship between CSR contributions and profitability of ISS UK. In addition, the dissertation will evaluate whether CSR is for marketing purposes or whether it is supportive of the strategy the organisation is taking towards sustainable development. The recommendations from the research study will be available to ISS UK, Department of Trade & Investment, other governmental agencies with an interest, and to other institutions that need it for further research.

1.2 Objectives

The following objectives will be undertaken:

1.2.1 To critically review literature on Corporate Social Responsibility and Sustainable Development

1.2.2 To examine the reputations rating in place, for companies based on their CSR contribution

1.2.3 To determine if there is statistical relationship between CSR contribution of ISS UK and their profitability

1.2.4 To anticipate if there is any appropriate percentage of ISS’s pre-tax profits to be spent toward CSR

1.2.5 To critically evaluate if CSR contribution is more important for public limited company than private company

1.2.6 To make recommendations to ISS UK, the Department of Trade & Investment, other governmental agencies with an interest, and to other institutions that need it for further research

Bibliography:

• Baker, Mallen. “Corporate and Social Responsibility: What does it mean?” Retrieved from http://www.mallenbaker.net accessed on 20 October 09
• Gunther, M (2003) Corporate Responsibility, Fortune Magazine. Retrieved from http://www.fortune.com accessed on 23 October 09
• Orlitzky, Marc, Frank L. Schmidt, Sara L. Rynes (2003) “Corporate Social and Financial Performance: A meta-analysis” Organization Studies (London: SAGE Publications), 24, 2003. Retrieved from http://www.finanzasostenibile.it/finanza/moskowitz2004 accessed on 22 October 09
• Williams, C.A and Aguilera, R.V (2008) “Corporate Social Responsibility in a Comparative Perspective” in Crane A, et.al (PDF). The Oxford Handbook of Corporate Social Responsibility