MN7181 - People and Organisation - Corporate governance( CG) & Corporate Social responsibility(CSR) - “Two sides of the Same Coin”

MN7181 - People and Organisations -Corporate governance( CG) & Corporate Social responsibility(CSR) - “Two sides of the Same Coin”  






Traditionally the corporations were  concerned about the profit making strategies and fundamentally oriented on capitalism and economic growth. However the social activism and emergence of new expectations have shifted the focus of the short term financial gain to long term sustainable social, environmental and economic aspects amalgamated with values like good governance, ethics, trust and accountability (Hardjono and Marrewijk, 2001). In simple terms the corporations have to be fair internal and external affairs.

The Corporate governance is basically concerned about the profit generation maintaining the high standards of ethics, fairness, transparency and accountability in their internal dealings. According to Cadbury(2000) the corporate governance is the a system through which the managers implement  their functions complying with the existing laws, regulations and codes of conduct. The importance of corporate governance is more today as it is happening in a  transparent environment to execute the company operations for its growth while safeguarding shareholder rights, reconciling Stake holder and manager interests(Page,2005).



The corporate social responsibility is a reflection of the positive concern about the society around the company. According to the world business council for sustainable development in the modern world it is thoroughly accepted that sustainable economic development could be achieved by working in collaboration with the local community and the families of the employees (WBSCD,2001). There is increasing world attention on the company policies, practices and programs intended to ensure positive impact on the society with the advent of globalization and international trade.









The corporate governance and corporate social responsibility are intricately related due to the interaction between the internal and external sociopolitical environment according to the framework of  legitimacy  theory by Windsor and Preston (1988). A good governance is answerable to all the stakeholders and CSR is about an obligation to different stakeholders.  The CG is about accountability and transparency while the internal dimension of CSR is about the concern of workplace safety, human rights, equity and equal opportunity, Labour rights and skill development. In other words the corporate governance would be accountable for the stake holders while the Corporate social responsibility would be for taking care of its clients and society ( Ali,2008).
    1. Hardjono T.W. & Marrewijk M. (2001) The Social dimensions of business excellence, corporate Rnvironmental stratergy 8.pp 223-233.
    2. Cadbury A. (2000)The Corporate governance agenda, Journal corporate, practice based papers  8, pp 7-15. 
    3. Page J.P. ( 2005) Corporate Governance and value creation,University of Sherbrooke, Research Foundation of CFA institute.
    4. WBCSD( World Business council for sustainable development) (2001) The Business case for sustainable development; Making a difference toward the Johannesburg summit 2002 and beyond, WBCSD, Switzerland.
    5. Windsor D. & Preston L.(1988), Corporate Governance ,social policy and social perfomance in the multinational corporations, Research in Corporate social performance and policy 10, pp 45-58.
    6. Jamali D. et al., Corporate governance and corporate social responsibility synergies and interrelationships, Corporate governance an international review 16(5),pp 443-459.

    Comments

    1. Lasitha IndrapalaJanuary 14, 2020 at 7:09 PM

      both CG and CSR focus on the ethics and ethical practices in the organization to the stakeholders in the responsiveness of an organization and in which it operates. It directly affects the organization's performance

      ReplyDelete
    2. Janith PrabashaJanuary 15, 2020 at 1:16 AM

      Corporate Governance is concerned with balancing economic and social priorities and individual and community interests whereas Corporate social responsibility is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. An interesting blog with good comparisons.

      ReplyDelete
    3. Sanjeewa GamageJanuary 15, 2020 at 2:28 AM

      Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled & this topic discussed in detail above article & how self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public by discussing (CSR). Very good Article.

      ReplyDelete
    4. Prasad KarunarathneJanuary 15, 2020 at 6:06 AM

      Nice comparing. However some pictures are not clearly visible.

      ReplyDelete
    5. Mufthas RasikimJanuary 16, 2020 at 5:54 AM

      Corporate governance is the system by which companies are directed and controlled. CSR is an evolving business practice that incorporates sustainable development into a company's business model. It has a positive impact on social, economic and environmental factors. Very good comparison.

      ReplyDelete
    6. Nalaka HerathJanuary 16, 2020 at 6:51 AM

      Corporate governance practices will evolve in the light of the changing circumstances
      of a company and must be tailored to meet those circumstances. Corporate governance
      practices must also evolve in the context of developments both in own country and overseas

      ReplyDelete
    7. Chathurika RathnayakeJanuary 17, 2020 at 8:57 PM

      You have mentioned the differences of CG and CSR in a really good manner. Hope you'll update the images in good resolution as some of them are not clear.

      ReplyDelete
      Replies
      1. Dr Amila Shashanka RatnayakeJanuary 18, 2020 at 11:41 PM

        Hi Chathurika, I have tried to fix the problem of pictures getting blurred after uploading. Please click and see on the diagram. Sorry for inconvenience.

        Delete
    8. Mahesh SeelarathnaJanuary 18, 2020 at 8:06 PM

      Both CG & CSR positively affected to the society as well as economically. Nice comparison.

      ReplyDelete

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