Essay on The twenty first century large enterprises

It goes without saying that in the twenty first century large enterprises can in no way work according to the old rules. The new conditions of the information era present new demands for the market players, thus establishing new norms and standards one should follow to be competitive and successful. One of these new demands is corporate social responsibility, which stands for a sustainable responsible model of business and such kind of self-regulation when the organization supports close relations with the community and is accountable to it. “The shared value model is based on the idea that corporate success and social welfare are interdependent,” Habisch et al. (114) explain. The example of Holcim has shown that this model can be very effective in achieving the goals of a prosperous company, especially today, when every actor tries to overcome the crisis and stay afloat despite the difficult and dangerous environment.

In fact, it seems to be quite worthy to study the experience of such company with that is one of the largest suppliers of different material on the globe and covers all the continents of the world with its net. The history of the Holcim Group is known for its constructive engagement achieved through the special body called community advisory panels. His body has united many participants, including top-management representatives, the representatives of labor unions, local communities, non-governmental organizations, local power authorities and agencies. Through these panels the company has learnt to gain substantive input from the community and, what is more, it has received valuable feedback in the form of trust and support. The example of the Union Cement of the Philippines has shown how unsupportive was the environment when the engagement was weak and limited. When a company like this provides the community with the assistance in extremely difficult situations like flood or other accidents, it is rather eloquent for common people.

In addition, receiving trust from the local people can be helpful for the security concerns. When the company is open to discussion and responsible for the actions it takes, the first line of defense will be easily received when the area is unquiet and intense. Thus, Orlitzky et al. (405) underline that “A business needs a healthy, educated workforce, sustainable resources and adept government to compete effectively.”

Furthermore, social performance often turns out to be a useful mechanism in reaching collaboration with partner organizations, as they also make conclusions on different activities of their potential partners and if they see that a company is actively taking part in different socially important projects, they can see confidence and reliability in those actions and desire to collaborate with such agents.

So, to receive a good feedback, the organization should be responsible and accountable. It means, first of all, to inform the community of all the processes that take place in the company, of course except commercial secrets and other confidential data. The more truthful and operative information people receive, the more they know about the company and thus have more grounds for trust. The demands to information even grow, as people are becoming more aware of environmental responsibilities and so on. Today corporate conscience is not simply a freedom to choose by the most progressive actors, but it is already becoming an international norm with plans and programs being worked out and widely spread. The community growth and progress is proactively promoted through the triple bottom line based on such values as people, planet and profit. The companies promote the public interest and simultaneously encourage positive images through philanthropy, regular fair-trade purchases, and other actions.

However, there are still a number of controversies arising from the model of corporate citizenship. There are a lot of debates on this issue, and first of all, they deal with the very understanding of the mission of business. There are still many opponents of the idea of social responsibility, inasmuch as the role of business is absolutely exactly defined in economic theory, and it is not reasonable to look for new definitions. “Critics argue that CSR distracts from the economic role of businesses,” Gray et al. (66) regard. On the one hand, this argument may be disputed, as social performance may actually be the new way to increase long-term profits and thus to satisfy the initial needs of the owners. “For society to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues, and opportunities for philanthropy,” Bhattacharya with colleagues (40) resume. But on the other hand, this is just why the model is criticized too: socially responsible business is blamed for this deceitful justification of their true goals; for hypocrisy and “window-dressing”.

Another complexity is that even corporate social responsibility is now so spread, that to compete one needs to be very inventive and careful. Today to compete in corporate conscience policies, implementation, and hit ratio, many organizations pay much attention to the tactics of benchmarking. According to Bhattacharya et al. (42), “Benchmarking involves reviewing competitor CSR initiatives, as well as measuring and evaluating the impact that those policies have on society and the environment, and how customers perceive competitor CSR strategy.”

One more question is, how far the company should proceed in being open and accountable by reporting its activities. In fact, it is rather difficult to be absolutely honest in carrying business. And therefore, many companies begin to be cunning and only pretend to be honest; they spread plenty of information, but still do not share many unpleasant facts. In this case, it will be even more painful and dangerous to disappoint the community who has already trusted the company. Then all the strategy can fall apart. “Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents,” Gray et al. (89) warn.

Nevertheless, when there is a space for effective corporate social responsibilities, there are enough benefits for the company to enjoy and to take risks for. In addition to the points listed above, social performance also helps in recruitment and retention. When the perspective graduates already have a positive image of where they can be employed, they will appreciate the opportunity to do it. When the employees are proud of the company they work for, their labor is stimulated and their effectiveness gets increased. At the same time, customers get better oriented among the frontline employees. So, today business is no more simply taking money for products. If you want to succeed, you should take responsibility for health and safety, environmental issues and diversity; and after all, what is even more important, to do it sincerely.