The Possible Challenge C Faced by Corporation to Take Social Responsibility
Businesses need to be socially responsible. This is undoubtedly true, and even more so for some large-scale companies. As time goes on, the social responsibility of companies, as a small economic entity, is becoming heavier and heavier. Peter Drucker already pointed out in his writings those large companies, as the most important social organizations of the age, need to assume a certain level of social responsibility. Therefore, companies need to be more socially responsible in their operations and base their business decisions on this. For employees, this is a stable family income and a form of well-being, while for companies, it is a way of raising their profile, reflecting social ethics and building their reputation. The main problems that company encounter in fulfilling their social responsibilities are as follows. Firstly, there is the problem of regulatory difficulties. Not all of the work that companies engage in to fulfill their social responsibilities can be easily quantified. If a company’s social responsibility is not monitored in an effective manner, this can first and foremost create a public trust issue. On the other hand, most of the social responsibility information disclosed by companies is positive and favorable, and negative information is almost never disclosed. This leaves companies without an effective monitoring and control mechanism to drive them to fulfil their social responsibility. Moreover, most companies disclose information out of policy pressure and to enhance their corporate reputation, rather than on their own initiative. This in turn leads to companies adopting different social responsibility strategies and implementing different policy behaviors.
An effective way to address this challenge is to establish non-profit organizations and third-party organizations to make judgements on the social responsibility performance of companies. In addition, the government can also introduce relevant regulations to specify the content of CSR reports and clarify what companies must disclose, thus indirectly urging them to fulfil their social responsibility. In addition, international and domestic organizations should also emphasize that CSR includes not only economic responsibility, but also environmental and legal responsibility. From the perspective of global development, if there is a good CSR system to regulate the development of multinational companies, it is of great importance to the global business environment and survival environment.
The second challenge facing companies in fulfilling their social responsibility is the issue of sustained investment. Issues such as inequitable distribution of social resources and environmental pollution, for which companies need to take responsibility, are long-standing, but the business situation of companies can change with the overall economic situation and their own business decisions. This makes it difficult for companies to commit to a long-term social responsibility. And in some areas, long-term investment is often required to produce better results. Due to the long investment cycle, unstable and difficult to measure returns, companies will be more cautious in investing in social responsibility in the face of increased uncertainty in the external environment. Of course, at this time, if a company’s socially responsible investment can be matched with its core competencies, it will not only reflect the company’s social responsibility, but also better reflect its capabilities.
To address this issue, companies need to choose carefully the areas in which they will fulfil their social responsibility. Companies must have a certain level of familiarity with the areas in which they want to fulfil their responsibilities in order to ensure that the resources they invest can be used effectively. Furthermore, companies can set up a special fund for social responsibility, and by setting up a budget for the special fund, they can ensure that they can provide long-term and lasting financial support for a social responsibility.
A further challenge that companies may face in exercising their social responsibility is the lack of experience in this area. Companies are constrained by human, financial and material resources and cannot give equal attention to all aspects of their business, often focusing on specific aspects to seek their competitive advantage. Due to the intangible nature of CSR benefits and the long-term nature of returns, especially for behaviors such as corporate charitable giving, long-term investment can increase the cost of doing business. Large enterprises may consider more factors that affect their production and business performance and thus be more willing to fulfil their social responsibility, and even if they do, it may have some negative impact on the enterprise.
To address such issues, companies can outsource their own social responsibility through charities and environmental organizations that would otherwise gain public recognition. Through the act of giving, companies can project a positive image of their business to the public and also help them to gain a strong operating environment that can provide an appropriate boost to their performance and value. At the same time, under market economy conditions, companies can better fulfil their social responsibility, which can enhance their brand value, strengthen their core competitiveness, improve employee loyalty, enhance their internal cohesion, reduce internal resource and energy consumption, increase corporate profits and expand their market share.
By JIN Kaiwei
