Assignment 1 / Essay

Assignment question:
t is sometime suggested that CSR activities are increasing strategic in that it affects that core
business of the firm and its growth, profitability and survival? Drawing on an example of a
corporation/company (National/ nternational), discuss this in the context of business strategies,
in particular on the issues of competitive advantage and firm performance.


Introduction
ln Lhls essay we wlll dlscuss why organlzaLlons began CS8 and how lL ls or can be or why should
lL be lmplemenLed CS8 usually geL sLarLed off elLher as an lnLegral parL of Lhe buslness sLraLegy
or corporaLe ldenLlLy or lL can be used as a defenslve pollcy wlLh Lhe laLLer belng used more
ofLen by companles LargeLed by acLlvlsLs 8aLlonale for CS8 lmplemenLaLlon ls based on elLher a
moral a raLlonal or an economlc argumenL (WerLher Chandler 2006) Campbell (2007)
whlch ls a represenLaLlve of a group of sLudles LhaL creaLe LesLable proposlLlons relaLed Lo Lhe
condlLlons under whlch organlzaLlons wlll move Loward CS8 SLudles show LhaL corporaLlons'
level of soclal responslblllLy as belng lnfluenced by facLors such as flnanclal condlLlons of Lhe
flrm healLh of Lhe economy and wellenforced sLaLe regulaLlons
8eason why companles Lake on CS8 ls also belng dlscussed ln Lhe llLeraLure ln Lerms of Lhe
speclflc lnlLlaLlves under whlch CS8 may fall Ways of descrlblng Lhese raLlonales varles from
Lhe more skepLlcal vlew of causerelaLed markeLlng Lo a more generous aLLrlbuLlon of genulne
soclally responslble buslness pracLlces (koLler Lee 2003)
1o ascerLaln how CS8 ls lmplemenLed ln organlzaLlons some researchers uses a developmenLal
framework Lo show change ln awareness sLraLegy and acLlon over Llme and poslLs sLages of
CS8 from elemenLary Lo Lransformlng (eg Mlrvls Cooglns 2006) !ackson and nelson (2004)
Lake more of a howLo approach offerlng a prlnclplebased framework for masLerlng whaL Lhey
call Lhe new rules of Lhe game" Lxamples of prlnclples lnclude harnesslng lnnovaLlon for Lhe
publlc good puLLlng people aL Lhe cenLer and spreadlng economlc opporLunlLy where ln Lhls
essay wlll dlscuss on how 1oyoLa MoLor CorporaLlon applles Lhls


of Toyota Motor orporation
Many companles have esLabllshed Lhelr corporaLe ldenLlLles uslng brandlng Lhrough CS8 whlch
has evenLually becomlng a focal polnL of Lhelr success and compeLlLlve advanLage (WerLher
Chandler 2006)
1oyoLa MoLor CorporaLlon recognlzes corporaLe soclal responslblllLles and emphasls on safeLy
Lhe envlronmenL and educaLlon Lo offer Lo people Lhe Lools needed Lo make a dlfference Lo
help and proLecL Lhe envlronmenL 1he company operaLes under Lhe guldance of a global earLh
charLer LhaL promoLes envlronmenLal responslblllLy LhroughouL Lhe organlzaLlon worldwlde
1oyoLa becomes Lhe leader ln leadlng Lhe lndusLry Lo lower emlsslons and lmprovlng fuel
economy vehlcles noL only dld 1oyoLa creaLe Lhe worlds flrsL massproducLlon gas/elecLrlc
hybrld car Lhey are also worklng ahead ln Lhe developmenL of fuLure fuel cell vehlcles
(1oyoLacom 2011)
1oyoLa MoLor CorporaLlon's commlLmenL Lo preservlng Lhe envlronmenL doesn'L sLop aL [usL
Lhelr vehlcles 1wo of Lhelr manufacLurlng planLs have been deslgnaLed as zero landflll
produclng operaLlons Creen" complex ln Callfornla has one of Lhe largesL commerclal solar
panel sysLems ln norLh Amerlca whlch conserves more Lhan 11 Mllllon gallons of drlnklng waLer
annually Lhrough speclal plpellnes LhaL supply recycled waLer for coollng and landscaplng
(1oyoLacom 2011)
ln addlLlon conLrlbuLlng Lo Lhelr dedlcaLlon ln envlronmenLal preservaLlon 1oyoLa has also
developed sLrong parLnershlps wlLh organlzaLlons such as 1he naLlonal Arbor uay loundaLlon
and 1he naLlonal LnvlronmenLal LducaLlon 1ralnlng loundaLlon 1he corporaLlon parLners
wlLh organlzaLlons schools unlverslLles and oLher buslnesses Lo supporL programs LhaL help
make Lhe world a beLLer place 1oyoLa MoLor CorporaLlon has a varleLy of naLlonal programs
llke 1oyoLa urlvlng LxpecLaLlons SafeLy rogram 1oyoLa ?ouLh lor undersLandlng Summer
Lxchange Scholarshlp rogram 1oyoLa lnLernaLlonal 1eacher rogram naLlonal CenLer for
lamlly LlLeracy 1oyoLa CommunlLy Scholars unlLed SLaLes Plspanlc Chamber of Commerce
lnLernshlp rogram and oLhers
trategic Models of
SLraLeglc plannlng as opposed Lo operaLlonal plannlng concerns Lhe general longLerm plannlng
of a 1oyoLa CorporaLlon wlLh Lhe alm Lo galn economlc advanLages ln Lhe compeLlLlve markeL
place CperaLlonal plannlng ln conLrasL lncorporaLes concreLe shorL or medlumLerm acLlvlLles
ln llne wlLh Lhe sLraLeglc goals of Lhe company (Wohe 1993 141) A sLraLeglc plan usually
conslsLs of an analysls of Lhe flrm and lLs envlronmenL Lhe developmenL of sLraLeglc goals and
alLernaLlve sLraLegles Lhe assessmenL evaluaLlon and selecLlon of sLraLeglc alLernaLlves and
Lhe lmplemenLaLlon evaluaLlon and conLrol of Lhe sLraLegles (CranL 2003 Popfenbeck 1997
40) ln whlch 1oyoLa CorporaLlon dld when Lhey came up wlLh Lhelr CS8

lL has been demonsLraLed by orLer and kramer LhaL a sLraLeglc approach Lo CS8 can
lncorporaLe compeLlLlve advanLages for 1oyoLa CorporaLlon buL even more lmporLanLly lL
allows for an lnLegraLed and effecLlve lmplemenLaLlon of CS lollowlng Lhls argumenLaLlon an
lncluslve sLraLeglc model of CS8 was developed comblnlng cenLral ldeas of CS8 Lheory wlLh Lhe
classlcal model of sLraLeglc plannlng uslng narrow vlew and boarder vlew
Narrow view
Cn Lhe conLrary supporLers of narrow vlew ln CS8 clalm LhaL 1oyoLa corporaLlons have [usL one
ob[ecLlve make money 1hey belleve LhaL carlng for Lhe envlronmenLal socleLy and oLher
problems are Lhe responslblllLles of governmenL and nonproflL maklng organlzaLlons
sponsored by governmenLs
A brlghL supporLer of Lhe narrow vlew ls as menLlon ln MllLon lrledman Lheory LhaL Lhose who
clalms LhaL dlverLlng corporaLlons from Lhe chase of proflL makes our economlc sysLem less
effecLlve lrledman sLaLes 1he sLockholders or Lhe cusLomers or Lhe employees could
separaLely spend Lhelr own money on Lhe parLlcular acLlon lf Lhey wlshed Lo do so 1he
execuLlve ls exerclslng a dlsLlncL soclal responslblllLy raLher Lhan servlng as an agenL of Lhe
sLockholders or Lhe cusLomers or Lhe employees only lf he spends Lhe money ln a dlfferenL way
Lhan Lhey would have spenL lL" ( M lrledman 1970)
AnoLher defender of narrow vlew ln corporaLe soclal responslblllLy ls famous economlsL Adam
SmlLh whose lnvlslble hand" argumenL sLaLes LhaL lf every member of socleLy ln a free markeL
economy sLrlves Lo promoLe hls own economlc lnLeresLs Lhey are led Lo promoLe Lhe general
good 1hls may be a good argumenL ln oLher eras of economlcs buL uslng Lhls argumenL Lo
[usLlfy for supporL of Lhe narrow vlew wlll reasonably arlse crlLlclsms
1he handofgovernmenL argumenL of Lhe narrow vlew sLaLes LhaL buslnesses should have no
soclal role oLher Lhan maklng money
Accordlng Lo lnepLcusLodlan argumenL buslness execuLlves lack moral and soclal experLlse
and can only make economlc declslons 1o ask execuLlves Lo Lake charge of noneconomlc
responslblllLles ls equal Lo puLLlng soclal welfare ln Lhe hands of lnepL cusLodlans

Broader view
SupporLer of broader vlew belleve LhaL 1oyoLa CorporaLlon have oLher obllgaLlons aparL from
pursulng proflL because of Lhelr greaL soclal and economlc power 1oyoLa corporaLlons musL
carry soclal responslblllLy Lowards socleLy and wlder communlLy 8uslnesses cannoL make
declslons whlch are made solely wlLh economlc polnL of vlew because 1oyoLa CorporaLlon are
lnLerrelaLed wlLh Lhe whole soclal sysLem 8uslness acLlvlLles have deep lmpllcaLlons for socleLy
As a resulL socleLy expecLs 1oyoLa CorporaLlon Lo pursue oLher responslblllLles as well A soclal
conLracL beLween socleLy and buslness represenLs a unsLaLed undersLandlng wlLhln socleLy
abouL Lhe proper goals and responslblllLles of buslness 1hls soclal conLracL ls an ongolng
process of negoLlaLlon and change
onclusion
1hls ls Lhe baslc reason why Lhe docLrlne of soclal responslblllLy lnvolves Lhe accepLance of
Lhe soclallsL vlew LhaL pollLlcal mechanlsms noL markeL mechanlsms are Lhe approprlaLe way
Lo deLermlne Lhe allocaLlon of scarce resources Lo alLernaLlve uses 1be New otk 1lmes
Moqozloe (1970)
1o lllusLraLe lL may well be ln Lhe long run lnLeresL for 1oyoLa CorporaLlon LhaL ls a ma[or
employer ln a small communlLy Lo devoLe resources Lo provldlng amenlLles Lo LhaL communlLy
or Lo lmprovlng lLs governmenL 1haL may make lL easler Lo aLLracL deslrable employees lL may
reduce Lhe wage blll or lessen losses from pllferage and saboLage or have oLher worLhwhlle
effecLs Cr lL may be LhaL glven Lhe laws abouL Lhe deducLlblllLy of corporaLe charlLable
conLrlbuLlons Lhe sLockholders can conLrlbuLe more Lo charlLles Lhey favor by havlng Lhe
corporaLlon make Lhe glfL Lhan by dolng lL Lhemselves slnce Lhey can ln LhaL way conLrlbuLe an
amounL LhaL would oLherwlse have been pald as corporaLe Laxes 1be New otk 1lmes
Moqozloe (1970)
1here are many dlfferenL vlews regardlng corporaLe soclal responslblllLy Some people defend
broader vlew" saylng LhaL corporaLlons should conLrlbuLe back Lo socleLy from Lhelr proflLs
Lhey make by selllng Lhelr producLs and servlces Lo Lhe members of LhaL socleLy CLhers defend
narrow vlew" [usLlfylng Lhey sLand by clalmlng LhaL execuLlves are noL moral agenLs and lL
would be a mlsLake Lo lnclude Lo Lhe scope of Lhelr responslblllLles Lo care abouL naLure wlder
communlLy and socleLy ln general
My personal vlew ls LhaL proflL maxlmlzaLlon should noL be Lhe only ob[ecLlve of any buslness
corporaLlons Lvery company uses resources Lo manufacLure lLs producLs or brlng lLs servlces
1hese resources lnclude land human resources and oLher resources from naLure lncludlng gas
waLer oll eLc 1he fees Lhe companles pay for Lhese resources when obLalnlng Lhem are
lnslgnlflcanL lf one compares Lhem wlLh Lhe huge amounL of proflLs companles make when
manufacLurlng producLs uslng Lhese resources CorporaLlons musL Lherefore conLrlbuLe parL of
Lhelr earnlngs Lo socleLy and envlronmenL as a way of paylng back even lf Lhey have pald when
obLalnlng resources 1hus l agree Lo broader vlew" ln CorporaLe Soclal 8esponslblllLy and
1oyoLa MoLor CorporaLlon ls [usLly and generously conLrlbuLlng Lo envlronmenL and Lhe socleLy
and consldered a model corporaLlon fulfllllng lLs corporaLe responslblllLles


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