In the current world, it may not be possible for organizations to maximize the value of shareholders by depending solely on short-term profits. Instead, there is a need to practice responsible behavior through market orientation. The promotion of social responsibility, which includes having the interests of the consumer at heart, contributes to sustainable development of a company. It allows companies to enhance their economic growth while at the same time ensuring the environment has been protected. Social responsibility and sustainability is critical for the organization for value creation purposes, risk management and offers the organization a chance to practice their philanthropy (Fontaine 115). Corporate social responsibility aligns behavior and values to the needs and expectations of all stakeholders, including special interest groups, regulators, communities, suppliers, employees, investors, and customers.
Zuckerberg says that a company is defined by how it behaves rather than by the words that are trotted out by the CEO or the human resource manager. He claims that he started Facebook for the community and not for sales. Therefore, there is a need for leaders to take up social responsibility actions as well as put forth techniques that will help in promoting social responsibility and sustainability. Employee engagement, mobilization of resources for the achievement of goals, and the establishment of rewards are some of the CSR actions. They are aimed at making the employees, consumers and the community at large responsible for their actions. Some of the techniques of social responsibility include social education and awareness (Tai and Shu-Hao 112). Awareness leads to success in the creation of shared values, community development, as well as the company’s strategies towards voluntary hazard elimination.
The sales made by the company are dependent on its relationship with the outside community (Safian). He further states that altruism and financial success go hand in hand with sales and there is nothing wrong with companies attaining higher values as well as their financial goals. All the actions, such as increasing education and awareness, taking up community development projects and voluntary measure to reduce pollution requires finances. The financial ratios will show that companies are not able to meet their financial goals due to CSR measures (Galant and Simon). However, poor financial results will only be experienced in the short run. In the long run, CSR will deliver stronger financial results.
In my opinion, the stakeholders affected directly by the social responsibility actions may find it burdensome and object the measures in the short run. Classical economists argue that the only responsibility that companies have is to increase the value of the shareholders in the long run (Galant and Simon). However, a realization of the benefits, in the long run, would make shareholder and all other stakeholders like consumers and employees will be receptive to the ideas.
One company at Dow Jones Industrial average is Wal-Mart stores. Wal-Mart takes up a measure that helps in improving the economic, environmental and social factors. The company’s measure to enhance environmental sustainability also leads to an increased emphasis on economic and social issues. The company promotes the well-being of all individuals in society by supporting the development of associates as well as the promotion of more affordable and secure food supply chain. Wal-Mart empowers women and promotes worker safety and dignity. From this, it can be deduced that corporate social responsibility is paramount as it helps companies to realize economic growth while ensuring sustainability. CSR, therefore, increases the value for the companies; however, companies need good leadership to ensure that the CSR actions are successfully implemented.