Corporate Social Responsibility

Introduction
Corporate Social Responsibility or CSR are the voluntary events and endeavors started by an
organization to work in a fiscal, public, community and naturally supportable way. As per

Friedman (1963), CSR is referred as the supportable and viable initiative or pledge by a
company or large business to work morally and assist in social and economic progress
while rendering improved standard of life of the staff and their loved ones along with the
society and the people around them as a whole. Companies can have a lot of

harmful results on the surroundings. In many cases several corporate companies

have come up with initiative to support an idea of balancing the revenue with a pledge to
ethical activity to compensate the consequences of business or support social cause.

Gregor (2010) mentioned that, nowadays it is preferred for big medium companies that
are consuming natural resources, to make official guidelines of moral codes for
stakeholders to follow so called Business Ethics. Business ethics theories actually
include moral standards or codes a business or organization brings into practice to
ensure that business and staff members perform with suitable and appropriate conduct.
Kamare (2011) cited it altogether unusual as CSR is concerning bringing potential for
viable work and surroundings. It shows considerations for cultural differences and finds
the business prospects in making the skills of workers.
About the Organization
Toyota motor corporation is a Japan based automobile manufacturer which is
considered largest manufacturer in the world. The company was established in 1937 by
Kiichiro Toyoda.
The company has 5 different brand under which it manufactures vehicles namely
Toyota, Lexus, Scion, Hino and Ranz. Apart from this Toyota has about 6 % share in
Isuzu, 51.5% share in Daihatsu motors and 16.7% investment in Fuji Industries. Toyota

has best manufacturing and corporate procedures. Management decisions are based
on long-term philosophy and believe in reliable technology and approached that serve
people. Toyota has its dealers and stores across the world. It incorporates best
corporate policies to serve people and surroundings.
With intention contribute to society and the world Toyota group has came up with
innovative and effective social responsibility and ethics. The company has very good
policy of commitment to surroundings. The policy is committed to backing the group or
individuals who work in support of the Surroundings, Learning and Safety as these
three things are connected to Toyotas corporate vision Quality, Safety and
Sustainability.

Objective
This study in intended to discuss theories of business ethics and corporate social
responsibility implemented by an organization. Also to know rewards to corporate Social
responsibility to that organization.
Literature review
For instance, the CSR definition used by Business for Social Responsibility is:
Operating a business in a manner that meets or exceeds the ethical, legal, commercial
and public expectations that society has of business. (Baker.M, 2004)
The Corporate Social Responsibility (CSR) of an organization refers to operating a
business in such a manner that it takes responsibility for the social and environmental
impact created by the business. CSR is actually an obligation to develop policies and
rules that put together responsible practices into daily business operations and to
reporting on progress created toward implementing these practices. Early CSR reports
usually targeted on philanthropy or so called charity or generosity as a driver of CSR.
That term is now replaces by a broad commitment to protecting and improving the lives

of employees and therefore the communities within which firms do business. CSR
reports currently generally address problems impacting just about each space of
operations: governance and ethics; employee hiring, chance and training; accountable
buying and provide chain policies, and energy and environmental impact. (As you sow,
2012).
A review of some of the literature on ethics provides some interesting insights into the
important area of ethics. Some writers refer to business ethics, which in itself suggests
that an exacting set of ethics exists for business. This, in fact, is totally untrue as ethics
apply to all parts of life and to think you discard one set of ethics and adopt another as
you enter the office is false. Ethics are like your skin: they go everywhere whit you.
(Bazley.M, Berry.A, Hancock.P, Jarvis.R, 2004)
According to, (Barry, 2000) business ethics is think about a spread of issues which will
arise from the atmosphere surrounding the business and the way staff and
management and organization which will trot out it morally. Issues are examined, like
fiduciary responsibility, and company social responsibility, company governance and
shareholder relations, and insider trading, bribery and discrimination within the field of
business ethics.

Theories of Business Ethics

If we talk about morality and ethical theories, morality is concerned with the social
practices defining right and wrong. Ethical theory and moral philosophies provide
guidelines for justification of right or wrong actions when settling human conflict. No one
moral philosophy is accepted by everyone.
In order to understand the ethical behavior we need to understand theories on ethical
and moral issues relating to shareholders. These theories determine the right or wrong
judgment for given situation.

Currently, the three most important theories of business ethics are the shareholder,
stakeholder, and social contract theories. These theories give clear explanation of a
businessman's ethical responsibilities, and hence, at most one of them can be accurate.
The shareholder theory is the oldest of the three, and it would be fair to distinguish it as
out of favor with many modern business ethicists.

The traditional definition of a

shareholder is any group or individual who can affect or is affected by the achievement
of the organizations objectives (Freeman 1984). One main part of the normative
shareholder theory is that the company decisions affect shareholder outcomes and has
to be ethic. It concentrates precisely on those people who have a financial or fiscal
share of the company. As per this theory, a company's only objective is to serve the
requirements and concerns of the companys owners.
Under these a few different business ethics theories exist, such as the utilitarian, rights
& justice, Egoism and Ethics of duties.
Both Egoism and utilitarianism judge right and wrong based on outcome of a decision.
According to Beauchamp and Bowie (1997:18) theory of egoism can be defined as An
action is morally right if the decision maker freely make a decision in order to follow
either their short-term requirements or long-term interests. Similarly Stuart (2003) says
an action is ethically right if it results in the greatest amount of gain for the greatest
amount of persons affected by the action.
Rights and Duties theories remain important in deciding right wrong in business. These
theories served many decision makers of religious

adherence. Immanuel Daimler

(1994) argued that ethics and judgment about right and wrong were not dependent on a
particular situation but also on cost of someones action.
If we talk about morality and ethical theories, morality is concerned with the social
practices defining right and wrong. Ethical theory and moral philosophies provide
guidelines for justification of right or wrong actions when settling human conflict. No one
moral philosophy is accepted by everyone.

Friedman (1999) states, Responsibility is to conduct the business in accordance with

their [shareholders] desires, which generally will be to make as much money as
possible while conforming to the basic rules of the society, both those embodied in law
and those embodied in ethical custom. He assumes that if society has sketched out
many ethical and moral standards with corporate law, then the companys obligations to
non-shareholders will be fulfilled with lawful business practices.
Morality is something which is associated with the social customs mentioning right and
wrong. Ethical theory and moral philosophies give principles and rules for validation of
right or wrong deeds when resolving human arguments. In this case utilitarian theories
can be applied these theories state whether an action is right or wrong is verified by the
actual or probable results that the action will have for the greatest number of people
affected by that action. Above all, business ethics are the principles to attain and sustain
success. In modern world share holders and public have elevated requirements of those
behind the management of modern business. Commitment and determination to put
ethics into practice is the prerequisite in your roadmap to business ethics (Holmstrom
and Milgrom (1994)).
The Triple Bottom Line Approach
The triple bottom line is a further approach to business social responsibility. It gives
business managers chart of bottom-line results both in economic terms and company
in the social and the environment areas.
It can be achieved by two methods. First, the three columns of responsibility have to be
put apart, with recording results separately for every column. Later, in all three of these
parts, the business should achieve sustainable results. Sustainability can be defines as
the long-term maintenance of balance with respect to ethics and economics,.

Social sustainability is balance of values in people's lives. major changes in living

standard and Human Development Index of citizens of a same economy is believed
risky and unsafe. When the imbalance grows and the rich get richer and the poor get
both poorer and more numerous, the chances that society itself will collapse in anger
along the risk of anarchy, increase. The condition will remain same for developed,
developing and poor countries.
Economic sustainability is long-term financial stability against more short-term profits
and unstable revenue. As per the triple-bottom-line model, major businesses have a
moral and ethical responsibility to create business plans allowing stable and continued
action. Sustainability means valuing business plans that may not lead to quick riches
but that also avoid disastrous losses.
Environmental sustainability is based on the commitment that natural resources,
especially the oil healing our engines, the clean air we breathe, and the water we drink,
are limited. If those things deteriorate significantly, our children won't be able to enjoy
the same quality of life most of us experience today.

Identify stakeholders concern:The essence of CSR is stakeholders concerns. Relationships among stakeholders
become one of the main vehicles for sustainable competitiveness. Engaging
stakeholders (customers, employees, suppliers, communities, investors and others) in
CSR design is a key task for planning and exercising stakeholders engagement.
Basically, this means that stakeholders take a part in the decision making process.
The primary objective is to understand the continuously changing objectives, values,
demands, and expectations of those people/groups with stake in the business (Jan &
Foster, 2002). Stakeholders concerns are expressed by stakeholders in relation to

business need. These concerns need to be carefully considered and incorporated in the
process of align CSR with business practice.
Customers: In order to become and stay competitive and successful, companies
should build lasting relationships with customers. These relationships are based on the
mutual interest in terms of understanding what customers need and what an
organization can offer to them. The focus is in the quality and reliability of products and
services. In addition to quality and reliability of products and services, it is very impotent
to have, as Tom Peters said having a passion for customers.
Employees. The quality of life in the workplace affects employees private life and their
families. Providing meaningful work, as well as fair wages and healthy and safe work
environment,

helps employees develop and realize their working potential. Therefore,

it is important that companies contribute to employees work, which at the bottom line
develops and realizes their potential. Also, the workplace security and working
conditions add value to employee's performances. Doing so, the company
demonstrates internal CSR.
Business partners: Global competition has brought new paradigm in the business
arena. Business partners such as suppliers, joint venture and alliance partners, and in
some cases even competitors are very important to company's success. Instead to
compete using unpopular actions (i.e. price cutting), business partners should develop
long-term relationship. Doing so, they can increase ethical awareness and reduce
complexity and costs.

The Environment: Ethics in business lead to corporate social responsibilities.

Managing sustainable environment makes good business sense. Promoting and
practicing eco-efficiency benefits not only the environment, but also the company. The
life cycle of the product and of the company can be extended. The energy inputs, toxic

dispersion and material recyclables help the company and environment to build the
good ethical image and extend the life cycle by using renewable resources.
Corporate Social responsibility of Toyota
Describing the corporate social responsibility Toyotas President, Akio Toyoda says that
the company will act in response to needs to society and enhancing live of people
surrounding it. He assures gratitude and appreciation to companys customers and
stake holders. The company we keep contributing for continuous development and bear
in mind the subsequent environment effects and increased involvement in CSR
Based on the CSR guidelines and policy Toyota Motor Corporation has taken steps to
assist in well-balanced and continuous development of surrounding and society by the
means of all activities of company in each country. . They assure of complying with
national and international norms for conducting business with honesty and loyalty. With
rational communication company will retain strong association with stake holders.
The company gives more importance to management involvement with stakeholders to
be a part of sustainable development. Company considers it is importance effort to
build and maintain firm relationships with its stakeholders by clear and honest
communication. Company presumes its stakeholders to support the initiative and work
in harmony with it.
Toyota motor corporate takes efforts to safeguard the personal information of stake
holders and customers who are connected in business.
CSR policy towards employees
The Company values its workforce and considers that the growth and achievement
toyta business duet to each individual contribution and integrated teamwork. The
company encourages the employees to grow and excel. It is always tin companys
interst to render good and acceptable working conditions and to keep a safe and
healthy working surroundings for all the employees.

Toyota does not have any

discrimination policy and supports equal employment opportunities. Company respect

and honour the human rights of people involved in business and in particular, do not use
or tolerate any form of forced or child labour.
Toyota Motor Corporation respects its business stakeholders like distributors, dealers
and suppliers and thrives on long term relationships to reach mutual growth. The
company always looks into realising a steady and long-term development and evolution
for the benefit of shareholders. The shareholders are regularly communicated with
business results and financial aspects of operations.
CSR policy towards Surroundings and communities
Environment- The Company always looks out to have minimum impact of business
operations to the surroundings the growth should be harmony with the environment .
Considerations are made and strong steps are taken that to minimize effects to
environment due to business work and vehicles produces by it.

The quality and

development team has established technologies enabling the climate and economy to
exist in harmony.
Community- Toyota Motor Corporation applies its policy of respect for people by
giving privilege to the community, culture and customs of each country it is working in. it
always seek out for superior and safer methods that meet the increasing expectation of
society for prolong growth .Toyota contributes to society in terms of offering support to
NGO and individuals working in the interest of environment and society.
Government: The best way for corporations to show social responsibility to the
government is to provide strict compliance to the regulations which is, in fact, the
primary expectation of the government from companies. Toyota do not tolerate bribery
of or by any business partner, government agency or public authority and maintain
honest and fair relationships with government agencies and public authorities. The
Corporate Governance Meeting assesses governance structures for realizing those
strategies and supervises business operations.

Benefits of CSR

It assists in attracting ethical mindful consumers

Effective expense reduction due to recycling

CSR results the attraction and retention of employees

Gives good competitive edge over competitors in the market

CSR in long run will result in increased revenues.

Conclusion
The Corporate Social Responsibility (CSR) refers to operating a business during a
manner that accounts for the social and environmental impact created by the business.
CSR means that a commitment to developing policies that integrate accountable
practices into daily business operations and to reporting on progress created toward
implementing these practices. Business ethics theories comprise of ethical values or
codes a company puts into practice to make sure that all employees act with acceptable
behavior. Toyota understands that the future of any business is relying on nature, socio
political and global economy for their sustainability and growth. Toyta has taken
initiatives to control CO2 for global warming. Also reduce energy consumption in all
business activities. The company is looking after all shareholders by respecting them
and providing healthy, safe work environment and economic benefits for employees and
rendering innovative and superior products society with responsibility to built and assist
them all.