What is the objective of any corporation or firm in business world? The obvious answer is that the objective of any business is to maximize its revenues and to make money for its shareholders. It is a very important objective and if a business corporation fails to achieve that objective of making money for shareholders its share prices will go down, it will have a bad reputation and unless radical changes are implemented in order to improve things the business corporation will not be around any more- it will go bankrupt.
But is making money for shareholders the only objective of a business corporation? The answer is negative. Along with making money any business corporation depending on its size has wide range of responsibilities towards wider society which include caring for the nature, helping to improve local conditions of life and others- responsibilities we call corporate social responsibility (CSR).
This report will attempt to define what is meant by corporate social responsibility, discussing the narrow and broader views. It will also try to answer the question why do some businesses believe it is important to be seen to be a good corporate citizen by identifying an organizational example of Toyota Motor Corporation, a big Japanese automobile manufacturing company analyzing its policies and practices in relation to corporate social responsibility issues. The report is a combination of theory and practice together with my own analysis.
I. Corporate Social Responsibility- what is it?
As Wikipedia.org defines it “Corporate social responsibility is an expression used to describe what some see as a company’s obligation to be sensitive to the needs of all of the stakeholders in its business operations”. Company’s stakeholders are its employees, customers, suppliers, community organizations, subsidiaries and affiliates, joint venture partners, local neighborhoods, investors, and shareholders (or a sole owner if the case is).