Corporate Social Responsibility Strategic Management

Question: Discuss about the Corporate Social Responsibility for Strategic Management. Answer: Introduction: Here several dimensions have been elaborately discussed to find out the significance of those components in the context of market expansion and successful business strategy. Accountability of corporate social responsibility, diversification and integration have been explained in the following discourse. Corporate social responsibility (CSR) is an integrated form to regulate the corporate activities. As mentioned by, Carroll (2015), CSR is a mechanism that involves self-regulation to ensure the fact that the organization is maintaining the ethical standards, legal norms so that the business can result beneficial socially. The organization must think beyond the interest of its business so that the actions, taken by a particular organization, can appear out as the positive factor for the society. On other words, Servaes and Tamayo (2013), mentioned that an organization takes corporate social responsibility when it is considering long term profit from the business and wants to hold a stable and healthy relation with the shareholders. The strategy of the corporate social responsibility is also used to increase the trust among the employees, consumers, investors and communities as well as to leave a positive impact on the environment. For a better accountability on the content of this essay, examples from two companies has been included here. For the first, Telstra has been selected. It has been recognized for its corporate social responsibility; whether it is a donation for the Asian Tsunami relief aid funds or provision of intensive care transportation for the critical babies through their service of Telstra Child Flight helicopter service this company has successfully completed their responsibility to the society. Telstra foundation also takes care of the well-being of the children and youths. In addition, there are other aspects like gender equality, emotional assistance, monetary compensation, adequate leaves that this company strictly follow in their workplace (Telstra.com 2016). Another company is the BHP Billiton, reputed for its CSR. BHP Billiton has taken steps for serious issues like environmental sustainability by focusing on lowering the greenhouse gas emission, water management and maintenance of bio diversity etc. moreover, they are highly sensible to the issues like child labor, cultural diversity, protection of indigenous rights, health and safety issues and ethical considerations (Bhpbilliton.com 2016). Diversification is the strategy, adopted by the organization to reduce the risk factors by entering in a new extended market or by launching new products and finally through investing the capital in a way that can lower the risk of losing assets to a particular concern (Berry 2015). Organizations usually invest their capital in form of different assets to avoid the volatility of the market. Sometimes they launch new products along with the existing one to grab the market. This strategy also possesses risk because of the when the company is expanding its products or brands or investing money in other areas they are completely new to the company. Two types of diversification are there; concentric diversification is when it involves integrity of the distribution channels or adding products to an existing one; as the products are categorically same it requires a change in the marketing effort (Tate and Yang 2015). For horizontal diversification, it makes a company shift to a new product line other than the existing one; this strategy comes into force when the company knows the customer is loyal to their brand and will equally trust every product under the brand name due to their product quality, promotional and pricing strategy. For example, Lend Lease can be chosen because this company has successfully implemented their strategy of the diversification by capturing global market beside the Australian market. This company has focused on expanding its overseas market by adopting more stable diversification strategies. Another company is Sirtex Medical; it has also been successful in expanding its market in America and Europe apart from the Australia. Reports have been revealed that almost 70% of the revenue for this company has been collected from the American market whereas, the European market has contributed to the 20-25%. For both this companies, their objective is to provide the investors more opportunities to obtain more profit. Integration is another strategic step that is followed by the companies as the measure for the growth of that company. Integration can be of two types; vertical integration and horizontal integration. Vertical integration is the strategy where the company has its own supply chain system. As mentioned by, Rothaermel (2015), vertical integration helps to reduce the problem of hold -up as this approach brings the maximum part of the supply chain under a single ownership and sometimes it can also take the form of a corporation. the importance of the vertical integration lies with the lower cost of the transportation, reduced uncertain conditions, strategic independence, synchronization between the demand and the supply chain. Horizontal integration is the strategic approach that involves acquisition and merging of the competitors. This strategy helps the company that has acquired its rival company to hold a strong position in that particular market. Buckley (2014), mentioned that horizon tal integration takes place in a same supply value chain. It helps a company to expand its market by becoming a large entity after merging or acquisition of the independent companies. the main objective behind the horizontal integration is to make the organization large in size, cut the competition, access new markets, achieving product differentiation and economic scale. Apple is largely recognized for its vertical integration approach. The company possesses its own manufacturing facility for its sophisticated and customized chips, used in the products like ipads and iphones. This company has invested a huge amount of money for their North Sand Jose production unit. Due to this approach of the integration the company enjoys the independence and flexibility concerning the manufacturing capabilities. For the example of the horizontal integration, reference of merging of the two companies i.e. Kraft Foods and Heinz can be chosen. This two companies merged resulting into a single entity. Both these companies were known for selling of the processed food. As the merged, now, they have become more powerful and covering the larger market than before. This essay can be helpful to understand the importance of the elements required for successful strategic business management as the content of this document has been contrasted with the examples from the practical business scenario. Reference list: Berry, C.H., 2015.Corporate growth and diversification. Princeton University Press. Bhpbilliton.com, 2016. BHP Billiton | A leading global resources company. Bhpbilliton.com. Available at: https://www.bhpbilliton.com/ [Accessed 11 Dec. 2016]. Buckley, P.J., 2014. International integration and coordination in the global factory. InThe Multinational Enterprise and the Emergence of the Global Factory(pp. 3-19). Palgrave Macmillan UK. Carroll, A.B., 2015. Corporate social responsibility.Organizational Dynamics,44, pp.87-96. Rothaermel, F.T., 2015.Strategic management. McGraw-Hill. Servaes, H. and Tamayo, A., 2013. The impact of corporate social responsibility on firm value: The role of customer awareness.Management Science,59(5), pp.1045-1061. Tate, G. and Yang, L., 2015. The bright side of corporate diversification: Evidence from internal labor markets.Review of Financial Studies,28(8), pp.2203-2249. Telstra.com, 2016. Available at: https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf%20C/ar-other-information.pdf [Accessed 11 Dec. 2016].