AMOURETTE SPOTLIGHT Hipster Assignment Example | Topics and Well Written Essays - 3000 words

AMOURETTE SPOTLIGHT Hipster - Assignment Example A lot of governing bodies have made companies responsible towards emission norms and set standards for declaration of their environmental compliances. Importance of corporate social responsibility is also reflected in the gaining momentum of mergers and acquisition dealings considering investments in socially responsible activities. Despite such rise in the value of CSR, the question remains as to why the companies find it important to engage and socially responsible behaviour when it actually does not add any financially visible value to the firm. Also, it is questionable whether these firms actually believe in acting socially or is it simply a means to gaining stakeholder support and shareholder (Font et al., 2012). The business world is plagued with multitude of problems ranging from accounting frauds, environmental issues and social concerns to corporate irregularities. In this scenario, importance of CSR reporting cannot be eliminated. This paper aims to examine whether the issu ing such CSR reports actually engage in socially responsible behaviour or merely try to convince stakeholders and gain investor support. It therefore highlights the role of business ethics and highlights the importance of CSR reporting. CSR for Increased profitability It is undoubted that companies operate in an environment where existence is subject to free play of competition between major players within any industry. In such unregulated attempt towards achieving greater market share, it is essential that government and media become aware of their role to act as controllers of social consequence of these activities. Their role has become significant and influential in today’s times. These groups of people have high power to put extreme pressure of major companies to adhere to environmental and social standards. This has resulted in the fact that CSR has emerged to be one of the inescapable priorities of businesses. Research has also shown that when managers and directors ta ke concern for employees and consumer welfare, they gain better support of their work staff in terms of productivity and loyalty than firms who have no consideration apart from earning profits. CSR in contemporary organizations There has been a sharp rise in CSR reporting in the recent decade. KPMG international has reported that about 95% of the largest 250 companies in the world issue standalone CSR reports as of 2011 data (Mahoney, 2012). This calls for a need to assess as to why companies have started reporting for CSR activities in such large numbers over their issues and sustainability efforts. The prime reason observed behind such rise in voluntary CSR reporting is the increasing pressure from various internal as well as external stakeholders on companies to emerge as good corporate citizens. It is known that engagement in CSR initiative has costs associated with it which might tax its competitive market position. Alternatively, the firm can benefit from the profits that accr ue to companies for being responsible corporate citizens like retention of employees, positive consumer behaviour and investments and higher profits. CSR reports are issued with a view that such information apart from other information that is available to stakeholders, shall act towards the benefit of the company. The major benefit arising out of this is believed to be good company reputation. KPMG reported that the major reason behind CSR reporting is brand building and reputation enhancement. It is also likely that