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Corporate Social Responsibility as a New Way of Advertisement

Traditionally, corporations were responsible only to their owners; their primary objective was profit maximization. Corporations’ responsibility towards the community and the environment in which they operate was overlooked. Hence, Corporations’ responsibility towards the community and the environment, which is commonly known as corporate social responsibility, is a recent development in the area of corporate governance.

Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives to assess and take responsibility for the company's effects on environmental and social well-being. The term generally applies to efforts that go beyond what may be required by their memorandum of association, regulators or environmental protection groups. CSR can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change.

The same money and influence that enable large companies to inflict damage on people and the environment allows them to effect positive change. At its simplest, a corporation can give money to charity. Companies can also use their influence to pressure governments and other companies to treat people and resources more ethically. Companies can invest in local communities in order to offset the negative impact their operations might have. A natural resources firm that begins to operate in a poor community might build a school, offer medical services or improve irrigation and sanitation equipment. Similarly, a company might invest in research and development in sustainable technologies, even though the project might not immediately lead to increased profitability.

Today, a shift has occurred in the way people conceptualize corporate social responsibility. For decades, corporate business models have been assumed to be necessarily harmful to certain communities and resources. The intention was therefore to mitigate or reverse the damage inherent in doing business. Now many entrepreneurs consider profit and social-environmental benefit to be inextricable. 

 Some think corporate social responsibility is an oxymoron. Others see corporate social responsibility as a distraction of a different sort, that is, from the lawful pursuit of profits. To them, a corporation's sole responsibility is to generate returns for its shareholders, not to try to save the world or to fret over its own impact. Laws and regulations must be followed in all jurisdictions in which the company operates, but management should not go beyond that, as that could hurt its bottom line and violate its duties to the owners. Some counter that this concern is misplaced, since responsible initiatives can increase brand loyalty and therefore profits. This may become increasingly true as ethical consumer culture gains wider acceptance. In 2010, the International Organization for Standardization released ISO 26000, a set of voluntary standards meant to help companies implement corporate social responsibility.

When we see the measures being taken and the advertisements broadcasted on different mass Medias by different business entities in our country, we can observe the tendency that these business entities are using corporate social responsibility as one tool of advertisement. To expound the claim at hand let me specifically analyse the floriculture and brewery sectors.

The floriculture sector is one of the sectors that invariably perceived as a sector which uses polluting substances. To gain acceptance and win the hearts of the society where it operates, apart from limiting the use of polluting substances and employing best available technologies, business entities engaged in floriculture business build schools and hospitals to the local community. However cynical this might seem, though the act of building schools and hospitals and being eco-friendly is their obligation towards the community and the environment, these acts are considered by these enterprises as an act of benevolence; and use these acts as tool in promoting what they do.

Similarly, when we look at the brewery sector, they contribute to the local community and the environment by:

  • Using best available technologies
  • Crating employment opportunities
  • Reducing polluting substances
  • Building schools and hospitals
  • Funding football clubs
  • Supply useful production by product to the community and others

And when you see and hear the advertisements like that of Saint George, Walya and Dashen and other beer related advertisements, you can understand that the things which are part of their corporate responsibility are being used a tool of promoting one’s business and ultimately maximizing their ultimate purpose which is profit maximization.

Ed.'s Note: Adisalem Desta is an independent researcher interested in international business law. The views expressed in this article do not necessarily reflect the views of Abissinia Law. The author is open to suggestions and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..
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Tuesday, 23 July 2024