For a long time, it was common that most of the businesses did not include community development goals in business objectives. They were not considered as fundamental responsibilities. However, most of the organizations are learning that the cutting-edge innovation and competitive advantage includes integrating corporate social initiatives into business strategies. In most cases these considerations are achieved through corporate social responsibility (CSR). These are activities undertaken by the company in consideration of ethical values, legal requirements, as well as respect for the community and environment. In addition, social activities are supported through initiatives that contribute to community health. For instance, AIDS prevention, early detection of breast cancer, timely immunization, and education on how to preserve the environment. Moreover, support from corporations may take many forms, such as cash contributions, grants, promotional sponsorships, and technical expertise.
On the other hand, triple bottom line (TBL) enables the companies to broaden their performance to include environmental and social measures. In the essence, TBL allows the sustainability of the organization to be measured by including non-financial performance. The dimensions of the TBL revolve around the 3Ps, that is, people, planet, and profits. On one hand, there is a challenge to identify a common unit to measure the 3Ps. On the other, it is not enough for a multinational corporation to be socially responsible. They must be a triple bottom line company to meet their ethical obligation.
With the modern trend, companies are not only required to explain their corporate governance, but also the ways, in which they are meeting their ethical obligations. New disclosure statements concerning investments and funds management must now include information about the extent, to which environmental, social, and ethical consideration are taken into account (Henrique & Richardson, 2013). The interesting point that raises is whether corporate social responsibility can be solely integrated to help companies to meet their ethical obligation.
In the essence, this could mean integrating both CSR and triple bottom line with public functions and organizational responsibilities. As a result, as multinational corporations struggle in meeting their ethical obligation, they will be required to include reference to both non-financial performance measures and obligation to community services (Henrique & Richardson, 2013). In this way chief executives must conduct business affairs in ways that promote efficient and ethical use of resources. Such outcome can be achieved by companies that remain active in their corporate social responsibility while ignoring the concepts of TBL. Both approaches should be adopted hand in hand.
Further, corporate governance and CSR have gained unprecedented prominence in a modern corporation. With increased stakeholder activism, business can no longer focus solely on profit margins. It must be more responsive to societal needs (Henrique & Richardson, 2013). Therefore, it becomes the nature of business to serve the interests of society, and in this way ethics is implied in the activities of multinational corporations. However, it is not enough for a multinational corporation to be socially responsible. It must be a triple bottom line company in order to receive its ultimate justification not from economic objectives, but from moral and ethical objectives it pursues (Henrique & Richardson, 2013).
In addition, integrating the approaches of CRS and TBL will help the companies to formulate their policies and practices that relate to issues relating to social responsibility, sustainable enterprises, and business ethics. In other words, multinational corporations should pursue business models that assist to directly address important ethical issues (Henrique & Richardson, 2013). This is to say that social responsibility will also encompass managing the environmental performances and achieve ethical values that are beyond legal obligations. For instance, business initiatives are setting environmental standards, such as reducing emission of carbon, which are more demanding than the current laws in many countries.
While there is a business case for anticipating future regulations, these firms are also responding to stakeholder concerns and evidence of the long-term damage to societies and ecosystems caused by climate change. In addition, adopting both approaches of CSR and TBL will help multinational corporations to focus on the growing recognition that sustainable development will require profound changes in the governance of corporations (Bara, 2010). As a result, there will be a renewed focus on globalization and society. This means that in addition to the compliance and competitive dimensions, business response will need to focus on whether its business activities are meeting ethical responsibilities. In relation, the CSR and TBL initiatives facilitate the distribution of wealth. Best practices in socially responsible distribution include localizing value creation, such as strategies that build local ecosystems and other forms of creative collaborations (Bara, 2010). These are investments in capacity building that are community-based. In the emphasis, business entities are regarded as one of the major factors contributing to disparities, such as high standards of living and income inequalities. Therefore, there is a perception that business organizations are responsible to contribute development in social and economic terms. In this case, the concepts of CSR and TBL will enhance an equal distribution of wealth for all nations participating in the globalization.
The specifics of CSR sustainable business initiatives vary greatly, from simple to concrete recipes for actions that business may take. However, as other management fashions day-to-day company practices, they may not change significantly when an organization claims to have adopted CSR sustainable business (Bara, 2010). In this case, this organization only gains the status and legitimacy to being able to claim adoption of a cutting-edge business practice. And, as a consequence, this organization will not be able to meet its ethical obligation completely. Moreover, in this position, the CSR initiatives will only have the broad appeal of a currently hot fashion that seemingly enhances the potential of the company. However, this poses a danger that increases the likelihood that the company’s goals will not match the reality of their implementation (Bara, 2010). Thus, a risk is that CSR sustainability may be adopted for the wrong reasons – that is, as a practice that improves public image rather than a commitment to substantive change for ethical responsibilities. In this case, it is not enough for a multinational corporation to be socially responsible. It must integrate the TBL concepts in its organizational goals in order to facilitate distributive justice (Bara, 2010). As a consequence, the corporations will be able to reconstruct their relationship with business ethics.
Business organizations will have a significant role to play in issues relating to distributive justice. This means that business executives will be required to help the societies to become more sustainable and competitive (Henrique & Richardson, 2013). Most of multinational corporations are responding by reducing the extent of negative social and environmental impact as well as the potential risks they pose to global systems. Executives are now beginning to recognize the value of demonstrating transparency and accountability in ways that extend beyond the use of traditional performance measures (Henrique & Richardson, 2013). This trend is a consequence of increasing adoption of CSR and TBL approaches that push the organizations to take greater responsibility for their non-financial impacts on the world.
Conclusively, the modern trend in corporate social responsibilities is enabling business organization to undertaken activities and initiatives that contribute to the well-being of the community. Support from corporations may take many forms, such as cash contributions, grants, promotional sponsorships, and technical expertise. On its part, triple bottom line uses the dimension of 3Ps that allows sustainability of the organization to be measured by including non-financial performance. Integrating the approaches of CRS and TBL will help the companies to formulate their policies and practices that are more responsive to societal needs. Secondly, they enhance an equal distribution of wealth for all nations participating in the globalization. Therefore, in order to ensuring the sustainability of CSR as a management practice, the company must include concept of TBL. As a result, the multinational corporations will gain the status and legitimacy to being able to claim adoption of cutting-edge business practices.
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