Corporate Social Responsibility (CRS) refers to the duty of a firm to take measures and come up with initiatives that are of great benefit to the society in which it operates. CSR is simply actions of a firm that promote social good beyond that which is required by law (Charles, Germann, and Grewal, 2016, p. 59). It incorporates several dimensions, for instance, a firm’s policy to hire minority those who are disadvantaged and to take part in political initiatives like sensitizing the community members on certain political issues. Many companies have initiated CRS programs that have be of great help to the communities in which they operate. Socially responsible organizations are better prepared to ensure the sustainability of their businesses in the long term because they are in tune with the dynamics currently affecting society and the business world (Creel, 2010, p. 3). This essay analyzes the corporate social responsibility of Microsoft and the advantages and its disadvantages to the company.
A firm is socially responsible when it goes beyond strict legal obligations to respect laws, pay taxes, and provide appropriate working conditions to ensure the safety and health of its employees, and embraces the notion that operating in such a manner will, in fact, make for a better company as well as contribute to building a fairer society. Managers understand that a strong CSR program is an essential element in achieving good business and thus firms have determined that their impact on the economic, social and environmental landscape directly affects their relationships with stakeholders, in particular investors, employees, customers, business partners, governments and communities.
CSR demands that businesses manage the economic, social and environmental impacts of their operations to maximize the benefits and minimize the downsides (Fontaine, M., 2013, p.111). Corporate social responsibility is all about business ventures that a company can come up with so as to create and maintain good relations and coexistence with the members of the society in which they operate. In order for businesses to remain competitive and to survive within the spheres in which they operate, managers must implement management systems that reflect the realities of economic, social, and environmental issues, concerns, and conditions (Avila, Hoffmann, Corrêa, Rosa Gama Madruga, Schuch Júnior, de Sousa Júnior, and Zanini, 2013, p. 16). This includes taking responsibility for their organizations’ actions and the effects these actions can have on others. Companies have a duty to ensure that the members of the society in which the company operates are satisfied with the presence of the firm in those destinations. This can only be achieved by engaging in activities that are beneficial to the general observing public. Companies that have a good image appeal to the public and thus community members see them as having their interests. Many organizations across the world have made commitments and taken initiatives that are aimed at reducing the continued destruction of the environment. Some of the initiatives that have been taken by multinational corporations include putting up measures that are aimed at conserving the environment and reducing the effects of global warming (Creel 2010, p. 2). Other companies are involved in humanitarian courses, for instance, providing basic necessities for those who are affected by natural disasters like floods and providing medicines for those who are infected by diseases. Microsoft has come up with initiatives that are aimed at giving back to the society which have enhanced its reputation thus making it one of the best companies in the world in terms of corporate social responsibility.
Importance of corporate social responsibility
CSR activities make workers of any company to feel more comfortable and secure while working in result-oriented companies that make the community they operate in part of the company, this increases the commitment of the employees to their work and thus making the company to easily realize its goals. Members of the society also feel more comfortable to invest in companies of high repute; therefore it is vital for companies to ensure that corporate social responsibility becomes part of of their policies. Programs that offer real participation and goes beyond the standard marketing mix can therefore effectively reshape the competitive game with a market leader (Du and Sen, 2016, p. 22). CSR needs to be implemented in the company not just as an image building exercise because a firm can achieve greater results and higher profit if it engages in initiatives that are aimed at benefiting the society. Kotler and Lee argue that corporate social responsibility improves the reputation of a company, thus increasing awareness of the company’s brand (2005, p.14). The good reputation that a business gets as a result of taking part in social responsibility activities is vital because they help to attract more people to the company. It is just one of the marketing strategies of the firm because those who were an aware of such a company get to know it better through its activities with members of the society.
Competitive advantage, social corporate responsibility gives a company a competitive advantage over its competitions because it helps in improving the confidence that the members of the society have in the company. Employing CSR for competitiveness enhancement requires a radical change because lack of suitable measures for detecting the stage of a company CSR cultural development hinders the identification and exploitation of business opportunities related to corporate social responsibility.
Techniques used by Microsoft in corporate social responsibility
Microsoft is regarded as one of “the world’s top corporate responsibility ranking based on publicly-available information. The firm has taken part in many initiatives that are aimed at supporting education and innovations. The company spends millions of dollars each year in initiatives which are aimed at conserving the environment and aiding those who have be affected by natural calamities. The company offers a variety of products and services that help us with everyday questions and tasks such as Microsoft Office, which most people use in their daily life to write reports, make presentations and keep track of accounts. Microsoft ranks within the top ten in most areas except climate change and employee relations. It gets the top in both corporate governance and philanthropy while ranking second on the list for human rights. Microsoft is recognized as a leading company for offering one of the strongest compensation and benefits packages, bonuses, and stock awards to eligible employees based on individual performance. The company has always scored highly in the corporate social responsibility ranking and also receives top rankings on reputation in three regions. Microsoft exemplifies a socially responsible firm that is consistent and complies with its CSR commitment which shows that it cares for the society in which it operates.
The company supports efforts to promote Corporate Social Responsibility and Corporate Citizenship. The company has voluntary integrated economic, social and environmental considerations into its operations and it’s committed to integrating CSR principles into all aspects of its business activities and internal working practices. Microsoft recognizes that high level commitment from management in driving Corporate Citizenship forward is an essential component of a company’s strategy. Therefore it has created a team across the company composed of representatives from various departments and business groups at local, regional and national level around the world. Microsoft recognizes that it has a unique opportunity and responsibility to cater for some needs of the community in which it operates especially in deserving cases.
As part of the CSR, the corporation recently launched, Unlimited Potential, which brings together the company’s corporate citizenship efforts and many of its business investments to significantly broaden the reach of technology in underserved communities. Unlimited Potential aims to deliver the benefits of relevant, accessible and affordable software to the five billion people with a goal of reaching the next billion people by the end of 2016.
Improving education, the company is working with various stakeholders to improve education across the globe; this work involves providing teachers and education leaders with new skills and resources, enabling student-centered learning. At the center of these efforts is Partners in Learning (PiL), a five-year, US$250 million initiative that offers curricula and training programs, software and grants in 101 countries. PiL programs have provided training to more than 3.5 million teachers by offering professional development resources to help educators use technology more effectively in the classroom.
Advancing research, With an Rand D investment of more than US$6 billion annually, Microsoft is one of the few companies that continue to focus on the kind of basic research that drives long-term advances, while also providing a continuous stream of in innovative new products and services for customers today. The company believes that respect for intellectual property rights is crucial to enabling innovators to bring their ideas to market and thus they work with Creative Commons, a nonprofit organization, to develop and release a free copyright licensing tool that enables people to embed licensing information in their work and to specify how the work can be reused or shared.
The company considers green initiatives when they make decisions on how they can give back to the society because Microsoft understands the importance of environmental sustainability. The costs of CSR will be lower in the long run for the reason that of renewable energy efficiency and reduced usage of electricity, water, and nonrenewable energy resources. Microsoft has made accomplishments on reducing their environmental footprints unlike some companies that neglect the environment and exploit the natural resources excessively. The company adheres to strict policies to ensure that the company remains in full compliance with international environmental regulations and the specific environmental requirements and actively works to protect our natural resources. When it is feasible, Microsoft conserves natural resources by using recycled materials and supplies, efficiently using energy, and participating in recycling programs and encourages and supports the sustainable use of renewable natural resources.
Reducing and disposing of waste, Microsoft reduces and where possible eliminates waste through source reduction and recycling at company facilities, all waste is safely and responsibly handled and disposed of so that the general public is not affected by the waste products. The company takes part in activities that are aimed at conserving the environment. The company has complied to global standards that require multinational corporations to engage in activities that promote conservation of the environment.
Microsoft was ranked ninth in corporate social responsibility best Corporate Citizens in the world in the year 2013 thus showing that the company has done the best towards the conservation of the environment and reduction of global warming. The company uses newly developed software to track the result of carbon emissions and energy consumption and thus helps to prevent environment pollution.
Advantages of corporate social responsibility to Microsoft
Corporate social responsibility in Microsoft has fostered workers to be more responsible to the environment in their daily life and be more persistent in sustainability (“Microsoft moves to carbon neutrality” 2013, p. 41). It has also helped in building the reputation of the firm thus attracting even more customers because of its reputation. “CSR activities that result in developing a good reputation for a firm are often hard to imitate because it is not based on a single CSR activity, but a program of activities, often based in the values of the firm” (Falkenberg and Brunsæl, p. 12). Corporate social responsibility improves a company’s profitability and value and thud will increase the value of Microsoft. The introduction of energy efficiencies and waste recycling cuts operational costs and increases company’s accountability and its transparency with investment analysts and the media, shareholders and local communities. It also enhances its reputation of the company and has made it to look attractive to investors who like investing in profitable companies that give back to the society.
Disadvantages of corporate social responsibility
Corporate social responsibility has many disadvantages to Microsoft because of the costs which are involved in implementing the initiatives. The costs that are associated with corporate social responsibility initiatives reduces the organizations overall profits (Calabrese, Costa, Menichini, Rosati, and Snakelike, 2013, p. 51). The costs which are used in corporate social responsibility in the company could be ploughed back into the company to more profitable ventures. The initiatives takes time to monitor exchanges and could involve hiring extra personnel which can make a company to incur extra expenses which may result to losses in the long run. Corporate social responsibility can be an exercise in futility because a company’s management has a fiduciary duty to its shareholders. The responsibility of executives to shareholders is to maximize profits and thus a manager who forsakes profits in favor of some benefits to society may expect to lose his job and be replaced by someone for whom profits are a priority.
Recommendations for better and further use of CSR models in Microsoft
Microsoft should do more in terms of social responsibility so as to increase the confidence of members of the society in the company. The company should exercise social responsibility in their policies and actions so that it can also benefit the community in which it operates. This is because society has authorized the company to operate, to use resources including from society itself and to affect the quality of citizens’ lives. In this regard, it is considered fair and appropriate that Microsoft acknowledges their responsibilities to the society in which it exists and operate. “If a business has a healthy climate in which to function in the future, it must take actions now that will ensure its long-term viability” (Carroll, and Shabana, 2010, p.89). To be regarded as a successful organization, proper measures that contribute to a better reputation and building trust and loyalty for the customers is very vital. Microsoft should prioritize measures that enhance the reputation as well as build the trust to achieve its core mandate in the business.
Microsoft should not only concentrate on activities that promote education and technology on their social responsibility but should also set aside some resources to those activities. For instance, the company should participate in environmental projects like utilizing solar power, reducing materials for packaging, implementing a recycling program, switching to use renewable energy sources, and many other kinds of green strategies. The company should also set aside a fund where it should create awareness among members of the public on the importance of environmental conservation. It is much easier to implement initiatives which are aimed at conserving the environment in a society that is informed unlike in uniformed society.
Microsoft has performed well in various global corporate social responsibility rankings for many years and thus is a good example of a company that gives back to the society in which it operates. Both employees and employers of Microsoft have collectively come together to give back to the society through corporate social responsibility practices. So in this sense, the values to establish and maintain organizational culture have to promote community and not focus on selfishness or just the individual. Microsoft has done a lot of work and contributed to the world for decades in their corporate social responsibility practices. The company has been devoted to charity work and all kinds of socially responsible practices by initiating several green strategies to minimize its environmental impacts.
Avila, L, Hoffmann, C, Corrêa, A, da Rosa Gama Madruga, L, Schuch Júnior, V, de Sousa Júnior, A, & Zanini, R 2013, ‘Social Responsibility Initiatives Using ISO 26000: An Analysis from Brazil’, Environmental Quality Management, 23, 2, pp. 15-30, GreenFILE, EBSCOhost, viewed 5 August 2016.
Calabrese, A, Costa, R, Menichini, T, Rosati, F, & Snakelike, G 2013, ‘Turning Corporate Social Responsibility-driven Opportunities in Competitive Advantages: a Two-dimensional Model’, Knowledge & Process Management, 20, 1, pp. 50-58, Business Source Complete, EBSCOhost, viewed 5 August 2016.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), pp.85-105.
Chan, L.Y., 2014. Corporate Social Responsibility of Multinational Corporations.
Creel, T. S. 2010. Environmental Reporting Practices of the Largest U.S. Companies. Management Accounting Quarterly, 12(1), 13-19.
Charles, K, Germann, F, & Grewal, R 2016, ‘Washing Away Your Sins? Corporate Social Responsibility, Corporate Social Irresponsibility, and Firm Performance’, Journal Of Marketing, 80, 2, pp. 59-79, Business Source Complete, EBSCOhost, viewed 5 August 2016.
Du, S, & Sen, S 2016, ‘Challenging Competition with CSR: Going Beyond the Marketing Mix to Make a Difference’, Gfk-Marketing Intelligence Review, 8, 1, pp. 18-23, Business Source Complete, EBSCOhost, viewed 5 August 2016.
Falkenberg, J, & Brunsæl, P 2011, ‘Corporate Social Responsibility: A Strategic Advantage or a Strategic Necessity?’, Journal Of Business Ethics, 99, pp. 9-16, Business Source Complete, EBSCOhost, viewed 5 August 2016.
Fontaine, M., 2013. Corporate social responsibility and sustainability: the new bottom line?. International Journal of Business and Social Science, 4(4).
Kotler, P., & Lee, N. 2005. Corporate social responsibility: doing the most good for your