case study (CSR)

Topics: Corporate social responsibility, Social responsibility, Pigovian tax Pages: 6 (1258 words) Published: January 17, 2015


ECONOMICS

CASE STUDY ASSIGNMENT:

Corporate Social Responsibility
What in it for business?

Introduction

Within the last two decades awareness of the ecological impacts of human activities has grown considerably. Nowadays, people expect companies to be conscious regarding their public and ecological responsibilities against society and conform their businesses in compliance with their obligations. My case study assignment will be structured as follows: it will start with the introduction, followed by the main body that consists of three parts and finalised with the conclusion.

Main body
1. Corporate Social Responsibility (CSR)
Nowadays, companies in a free market economy are required to be trustworthy, demonstrate transparency and accountability as a consequence social responsibility has turned to be a key issue in their business ethics. Customers have become increasingly aware of how they want companies to behave: both ethically and at the same time contributing to economic growth and development (Carroll&Shabana, 2010). For instance, a couple of years ago the worldwide famous company Apple faced a media scandal when they were accused of using cheap underage labour in their plants in Asia. Corporations benefit from being socially responsible as this helps them to increase sales, labour and trust in the company as a whole, especially when government regulation over their activities has reduced and they need to compete for customers. Moreover, businesses need to secure a sustainable growth for their companies in a responsible way because they have obligations to its owners/shareholders and stakeholders. Companies who are socially responsible are more attractive for potential and recent employees as many studies show that people prefer to work for a company that aligns with their own personal values.

However, all the above mentioned conditions and situations could not always be met in a free market systems due to the number of reasons. For example, lack of necessary information for accurate decision-making: consumers are not always aware of what products they buy or what services they get (vaccination, GM food etc.). 2. Green taxes

Environmental taxes, or green taxes, are considered to be powerful economic policy instruments for improving negative externalities. Furthermore, they can help to enhance ecological situation and result in overall gains for the whole society by cutting down redundant pollution (Aidt, 2010; Zhou&Segerson, 2012). Green taxes are frequently expected to bring a double dividend: both environmental benefit from ecological improvement and commercial benefit from utilisation of the revenue from ''pollutant taxes'' in order to decrease the burden of other taxes such as capital, income or sales (Zhou&Segerson, 2012). These environmental taxes are historically more common in Europe. However, nowadays in the USA several states have adopted environmental taxes in order to reduce budget shortfalls, at both the federal and state levels, and raise tax revenue. When considering the question regarding the reduction of green taxes for companies with environmentally friendly approach, the answer seems to be obviously positive: as the companies pollute less, their burden of taxes should be decreased. Furthermore, green taxes raise the cost to a polluter of creating pollution and force companies both to develop innovations and adopt already existing ones. For example, fossil fuel taxes created a stimulus for automobile makers to develop and produce alternatively powered vehicles and for customers to adopt them. However, there are several limitations that make it quite complicated to accomplish this straightforward consequence (less pollution-less taxes). First of all, it is rather difficult to define the correct green tax rate, even though it is evident that taxes commensurate with the marginal social...

References: Aidt, T.S. (2010). Green taxes: Refunding Rules and Lobbying. Journal of Environmental Economics and Management, 60, p.31-43.
BP. (2013). Sustainability Review 2012. Retrieved February 26, 2014 from
http://www.bp.com/en/global/corporate/sustainability/bp-and-sustainability/how-bp-is-changing.html
Brunton, M. (2011). Communicating Sustainability, but Producing Pollution: The Case of the BP Oil Spill. In E. Eweje G., Perry M (Eds.),  Business and Sustainability: Concepts, Strategies and Changes (Critical Studies on Corporate Responsibility, Governance and Sustainability (pp.169-191). Emerald Group Publishing Limited.
Carroll, A.B., Shabana, K.M. (2010). The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice. International Journal of Management Reviews, 12, p.85–105.
Goosen-Botes, V., Samkin, G. (2013). BP 's Use of Posture to Respond to the Deepwater Horizon Crisis. Journal of Economic and Financial Sciences, 6(2), p.359-382.
Zhou, R., Segerson, K. (2012). Are Green Taxes a Good Way to Help Solve State Budget Deficits? Sustainability, 4, p.1329-1353.
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