Financial Scandals and Environmental Disasters

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Due to financial scandals and environmental disasters, CSR has become a critical issue for companies who are demonstrating their commitment towards an ethical outlook and responsible behaviour by developing strategies which focus beyond profit maximisation, from the concern of wellbeing for employees to improving the community and the environment, in order to try minimising the damage caused by media coverage and increased transparency. Christian Aid (2004) argues that CSR is an inadequate response to the devasting impact that multinational companies make, using CSR to mask the impact. Starbucks were accused of tax avoidance within the United Kingdom in 2012, after only paying £8.6m in tax over the past fourteen years (BBC News, 2012), which negatively affected the reputation of the company, thus the firm sought to rebuild the relationship with stakeholders with promotions to enhance them back to the company, which included a £1.50 latte every Monday morning (Marketing Week, 2013). However the company have an extensive CSR policy, with particular focus on the ethical sourcing of products which is well publicised to the company’s customers, Starbucks emphasise their commitment to provide ethically and responsibly purchased products with the highest quality (Starbucks, 2013). This publicity has enhanced the corporations reputation due to society becoming increasingly conscious of the items they purchased being ethical and Fairtrade (De Palsmacker., et al, 2005), therefore the CSR policies act as a backbone to the company when it faces bad publicity. Companies like the Body Shop and John Lewis have integrated ethics and CSR in to the way the companies do business. The Body Shop have a strong commitment to CSR through implementing six... ... middle of paper ... ...d culture and workers and factories. However the CSR reports are difficult to find, grouping years together suggesting that CSR is not a priority for the company, through grouping the years 2007, 2008 and 2009 reports together it becomes heavy material and therefore not accessible to all stakeholders, with their achievements not obviously displayed. Through adopting CSR, it can create stronger customer loyalty and investor base which could positively impact upon the success of the company, yet a corporate psychopath would not be interested in this (Boddy, 2005). Stout (2005) identified that corporate psychopaths have a need for stimulation thus taking financial, moral or legal risks that others would not take however this could lead to negative effects effecting both the organisation and the community, yet due to a psychopath’s lack of empathy they would not care.

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