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Financial Scandals And Environmental Disasters Essay

839 words - 4 pages

Due to financial scandals and environmental disasters, CSR has become a critical issue for companies who are demonstrating their commitment towards an ethical outlook and responsible behaviour by developing strategies which focus beyond profit maximisation, from the concern of wellbeing for employees to improving the community and the environment, in order to try minimising the damage caused by media coverage and increased transparency. Christian Aid (2004) argues that CSR is an inadequate response to the devasting impact that multinational companies make, using CSR to mask the impact. Starbucks were accused of tax avoidance within the United Kingdom in 2012, after only paying £8.6m in tax over the past fourteen years (BBC News, 2012), which negatively affected the reputation of the company, thus the firm sought to rebuild the relationship with stakeholders with promotions to enhance them back to the company, which included a £1.50 latte every Monday morning (Marketing Week, 2013). However the company have an extensive CSR policy, with particular focus on the ethical sourcing of products which is well publicised to the company’s customers, Starbucks emphasise their commitment to provide ethically and responsibly purchased products with the highest quality (Starbucks, 2013). This publicity has enhanced the corporations reputation due to society becoming increasingly conscious of the items they purchased being ethical and Fairtrade (De Palsmacker., et al, 2005), therefore the CSR policies act as a backbone to the company when it faces bad publicity. Companies like the Body Shop and John Lewis have integrated ethics and CSR in to the way the companies do business. The Body Shop have a strong commitment to CSR through implementing six key values; against animal testing, support community fair trade, activate fair trade, defend human rights and protect the planet (The Body Shop, 2012), through developing these values the company have a well established reputation based upon the way the company do business, they are not separate therefore the company clearly focus on these as they are fundamental to the business achieving success.

Stakeholders influence CSR practices, in particular consumers whereby, 84% of Americans would switch brands if another company was more CSR based, according to a study conducted by Bhattacharya and Sen (2004) highlighting the importance consumers place on CSR when deciding where to buy products from, thus companies should concentrate on CSR when attracting new customers or retaining existent customers. Corporations are governed by executives, thus it is dependent upon their ethical stance as to whether discretionary CSR occurs (Boddy et al, 2010), as these...

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