All organizations operate in a community, they make an impact on that community, this can be a positive or negative impact, for some communities, they are dependent on the organization around them, either for job creation or for the services provided by the organization. Although all communities are under the supervision of the local authorities, the government are in charge of providing the basic amenities and improving the communities, some perform their duties and others ignore but for a community to attain growth, individuals, organizations operating and living in the community have to make a contribution in making the community better.
Firms will, however, have to contribute to the community, either financially, job creation, provision of basic amenities, or creating good infrastructure, there are positive aspects of the organization contributing to the community, the community gains from the organization, and the organization also gains back. Moreover, there is a limit to what a firm can do in a community since they have a responsibility to their stakeholders and cannot focus solely on the problems of the community but also focus on the direct and indirect operations of the organization.
Furthermore, there is an ethical basis on which a firm must operate in a community:
- A firm should not inflict harm to the community or individuals of the community: knowing full that an incident will cause harm to the community in which an organization operates, the organization should take necessary steps in preventing any harm to the community.
- An organization must choose a course of action that does not harm the community: any operation carried out by the organization, the community in which it operates should be considered, the operation should not have or cause direct harm.
Corporate Social Responsibilities
Corporate social responsibilities is a concept whereby an organization involves the social and environmental concerns of the community into consideration and part of their activities. It can also be looked at as a model that allows an organization to be socially accountable to its community, organizations have social, economic, environmental impacts on the community through corporate social responsibility.
Social responsibility: this focus is based on providing social amenities and infrastructures for the community, social amenities like providing water, building signage, fitness facility, child daycare, and schools.
Environmental responsibility: environmental responsibilities consist of doing things that help the environment, like reducing pollution, gas emissions, use of plastics, developing new renewable energy, cleaning, and sensitization of the environment. Planting of trees and donating to environmental causes.
Economic responsibility: This focuses on the organization putting part of its financial resources into taking up environmental and social responsibility.
Advantages of Corporate Social Responsibility
- Brand value: companies that make provision for corporate social responsibility have the advantage of improving their brand value, the community around them perceive them as more, the importance of the organization matters to them, also it creates awareness to the general public which is good for business.
- Improves business culture: organizations that partake in corporate social responsibility change the perspective of their employees, it shows them that the organization cares about its community and motivates them to have greater commitment, build loyalty.
- Attracts investors: organizations that partake in corporate social responsibility can also make their business profitable, it attracts investors and makes the business attractive, most investors want to see the impact of the organization on the community, if the projects are done well, it also shows the investors that the company is trusted and will be loyal to their terms.