People of modern world live in conditions of acute social problems. The role of business in social development grew significantly, and the requirements for transparency in the business sector increased. A lot of companies are well aware that they cannot successfully run a business, which is functioning in an isolated space. Therefore, integration of the principle of corporate social responsibility (CSR) in the strategy of business development becomes a characteristic feature of the leading companies. The concept of CSR is based on ethical principles in the business. Only through the conscientious approach companies can increase their profits and make a good product. By engaging in charity, the corporation improves its reputation and increases trust of employees, which in turn increases productivity. This paper considers the nature and purpose of CSR in business. It also provides a critical evaluation of CSR contribution to success of a business.
There is a well-established understanding of corporate social responsibility, but various organizations which operate in this area, define this notion in different ways. Mostly, CSR is referred to as a practice whereby organizations take into account the interests of society, which is influenced by their functioning. CSR includes achievement of commercial success in ways that appreciate ethical approaches, principal among which is respect for people, nature, and different communities. The term "corporate social responsibility" has appeared in the early 1970s, together with the definition of "stakeholders", which was formed by a plurality of multinational corporations. Stakeholders are people affected by the functioning of an organization (Freeman 1984).
Corporate social responsibility has multilevel character. Basic level involves the following obligations: timely payment of taxes, payment of wages, if possible, providing of new jobs, as an extension of the working staff. The second level involves provision of staff with acceptable terms of not only work, but also life: developing skills, preventive treatment, housing, and social development. Charity work is the third and the highest level of responsibility. There is also the conventional division into internal and external social responsibility. Internal social responsibility of business includes work safety, stability of wages, additional medical and social insurance of employees, development of human resources through training programs and professional development programs, and assistance for employees in critical situations. External corporate responsibility involved in charity sponsorship contributes to protection of the environment, interacts with the local community and local authorities.
Corporate social responsibility maximizes profits through its proper use. Therefore, the correct approach helps to achieve not only the maximum but stable income. Furthermore, CSR has several objectives, which develop a business. One of the goals of corporate social responsibility is the development of its staff, which helps avoid high staff turnover and attract the best specialists. Most businesses stand firm in this regard. Companies increase the level of staff skills, thereby improving the quality of the product and increasing the productivity. CSR can improve company's image and create certain reputation. Some approaches of CSR exist to advertise any product or serve and cover company's activities in the media. For socially responsible companies the ability to attract investment capital is much higher than for other companies.
The practice of CSR is the subject of numerous disputes and criticism. A lot of economists argue that corporate social responsibility allows to receive numerous benefits. Critics argue that, in fact, CSR conducts business in another direction and only embellishes reality. Proponents of CSR argue that the profit increases by virtue of social responsibility. Companies get access to socially responsible investments. When making investments investors take into account indicators of company's activities in social and ethical areas and the area of environmental protection. One of the major benefits of CSR is advertisement of the brand and improvement of company's reputation, which helps open new markets and lines of business. Despite this, critics argue that companies are implementing CSR programs to divert attention from ethical issues. They are convinced that some companies start CSR programs for commercial advantages and they believe that companies, which exist to maximize revenues cannot operate in public interest (McKibben 2006).
There are companies that claim they are adhering to CSR concept, but at the same time they are participating in malicious processes. For example, corporations that sell fast food are becoming popular due to CSR programs which are focus on protection of the environment, the staff, and charitable activity. Nonetheless companies do not advertise the fact that fast food is high in fat and other harmful substances, which greatly increase the risk of cardiovascular disease. The use of CSR for such purposes is made in many branches of the market. It is often associated with the multinational corporations, which have proved themselves in the world and have a good reputation. These corporations can get involved in charity and CSR in order to achieve higher returns, hiding the side effects of their production (Pirtini & Erdem 2010)
CSR plays an important role in conducting business. Being associated with following ethical principles, it can bring a number of benefits that can maximize revenue, improve skills of workers, and advertise the goods. CSR has dual nature, and many economists have different attitudes to the introduction of the CSR concept to a business. History knows many cases of misuse of CSR for business purposes. However, while conducting business, the company needs to pay attention to the moral aspect of CSR, which will help the staff and the company to create useful high-quality product. Only by using this approach the company will be able to have good reputation and establish itself on the market of manufacturers as an example of the implementation of CSR.