The contemporary world calls upon the CEO of different companies in meeting the needs of various people without making any compromise. It is vital for the organization to consider how their operations can influence the society and the environment. An organization must demonstrate the inclusion of social and environmental concern in the business operations and its interactions with the stakeholders. This literature argues that a leader of an organization must weigh the concerns and expectations of multiple stakeholders to enable the making of sound strategic choices.
Hinson and Ndhlovu (2011) explain that a leader, in this generation, must consider the concerns of all the key stakeholders when making strategic decisions. The ground for this claim is that most of the organizations in this era have designed many strategies to deal with the societal needs as well business needs. The success of any business depends on how deep it can integrate the social responsibility approach in the day-to-day operations. The organizations that rely on the society significantly, as they do their economic operations result in a sense of responsibility.
Hinson and Ndhlovu (2011) claim that it is acceptable for a corporation to experience business success without considering the agents that contribute in the success. This claim is not true because firms in this generation cannot work in isolation of the stakeholders. A firm has to reshape the frameworks by devising social responsible agendas in line with its economic operations.
A leader in any organization must strive to have a good relationship with the employees and other stakeholders such as investors, activists, and the government officials. This will help the firm manage the rapidly changing challenges and come out successful.
Phillip (2004) counter argues that companies use Corporate Social Responsibility (CSR) as a defensive mechanism when they target stakeholders. Phillip (2004) bases a moral argument to create testable proportions related to the conditions that organization move towards CSR. Phillip (2004) cites that the financial condition of the firm, health of the economy, and the country’s well-set regulations influence the level of CSR.
D’ Amato (2011) response to the argument is that CSR approach derives economic and sustainable development for the firm. Companies do not wait for financial health and government regulation to participate in CSR. In reality, participating in CSR improves the firm’s financial performance. Organizations have a growing sense to cater for the society and the environment to ensure survival of the business.
There is a misconception and an inaccurate assumption that exists in terms of an organization opportunities and profits available to ensure expansion. A leader in the firm can support the impoverished in the society and assist in reducing the number of poor people in a region.
D’Amato (2011) says that when a business assists the poor people it is possible to gain new sources of additional revenue coupled with great efficiencies that have cost reduced programs. This can as well lead to an increased buying power by consumers who can purchase the company’s product. D’ Amato (2011) proposes that the personality of a corporation by use of branding is a focal point in transforming the company in the face of competition in the market. A leader in an organization can design good economic and social issues to help differentiate what the firm is offering the consumers and its responsibility towards the community.
Welford (2007) says that a company must address the economic, legal, and social responsibilities in a hierarchical structure during the inception stage. This claim is false since in the current environment that businesses operate the social responsibilities and economic responsibilities are at par during the foundation of businesses.
The warrant of this counter argument is that CSR permits the matching of corporate operations with societal values since the parameters are changing rapidly. In light of this, the social responsibilities are mandatory when making the strategic decisions in a firm and cannot apply the hierarchical structure. The social responsibility mirrors the image of a firm to the stakeholders. This cultural practice has to remain ingrained even as the firm engages in other economic operations.
A responsible leader must consider the interests of the stakeholder society to ensure the integrity and accountability in the firm. This calls for reconciliation and aligning of demands of the employees, customers, investors, suppliers, and the community at large. A company’s record in terms of CSR is efficient in the supply-chain activities. A community-based strategy that works in tandem with firms’ objectives can ensure success of the business.
The exemption to this claim is that a company must not make unachievable promises. A community can often question a long list of initiatives that a corporate intends to meet within a given time. Phillips (2004) offers evidence to verify a gap between companies has stated intentions by the leader and the actual behavior in reality. This shows that many leaders lack commitment in performing the CSR as outlined.
Consequently, accountability of CSR is a complex issue that remains highly interconnected. A business has a diverse web of relationship since every action affects the community and determines the survival of the business in the future. Hinson & Ndhlovu (2011) is of the opinion that a conflict situation will emanate when a leader collaborates with stakeholders. Hinson & Ndhlovu (2011) informs that joint effort between a business leader and the key stakeholders can lead either competing for supremacy in the business environment. Phillips (2004) refutes this claim since leaders can interact with different stakeholders and achieve favorable reputations and end up building an effective CSR.
Phillips (2004) argues that decision-making resides with the internal organization, and then the stakeholders get the deliberated information that is subject to development and implementation. Hinson & Ndhlovu (2011) counter argues that this strategy may fail since it can feed skepticism toward CSR. This can emanate from the trade unions and the activist opposition. This claim is false since leaders can give substantial attention in their engagement with the stakeholders to defeat any opposing force in the attainment of CSR goals. The decision-making process allows negotiation to develop action for development.
D’Amato et al (2009) claim that stakeholders and the leader act in unison, in the achievement of sustainable development. There is a strong link between the stakeholders and organization to ensure both interest performances. The warrant for this claim is that negotiations between the stakeholders and management in the organization and lead to social learning and trust between each other.
The only reservation to this argument is that any well- intention effort to promote good relations between the leader and stakeholders can cause conflicts that can stifle economic operations. It is difficult for a business leader to act rationally with the stakeholders to promote overall sustainability together with the required economic output. Another rebuttal to this claim is that the stakeholders also face challenges and threats as they collaborate with the corporate leadership.
In conclusion, it is important for the corporate leadership and the stakeholders to embrace a long-term vision for success of the firm. A corporation must engage with the stakeholders so as to ensure the development of valuable CSR relations. This literature confirms that leadership plays an immense role in conceptualizing and implementing CSR initiatives with the support of the stakeholders. A successful leader must apply social responsibilities when designing organizational strategies.
D’Amato, A., Henderson, S., & Florence, S. (2009). Corporate Social Responsibility and Sustainable Business: A Guide to Leadership Tasks and Functions. Centre for Creative Leadership, 335(2), 1-11.
Hinson, R. E., & Ndhlovu, T. P. (2011). Conceptualising corporate social responsibility (CSR) and corporate social investment (CSI): the South African context. Social Responsibility Journal, 7(3), 332-346.
Phillips, R. (2004). Ethics and a manager's obligations under stakeholder theory. Ivey Business Journal, 68(4), 1-4.
Welford, R. (2007). Corporate governance and corporate social responsibility: issues for Asia. Corporate Social Responsibility and Environmental Management, 14(1), 42-51.