‘It pays to be good but not too good.’ Discuss this statement with reference to contemporary challenges of global governance, such as climate change and corporate tax avoidance.

 

This activities are known as corporate social responsibility (CSR) of a firm. It’s believed that  CSR improves the public image of a company and its financial performance over time. It’s the responsibility of the organization to. make decisions and policy and take Buy Argumentative Essay. actions which are in favor of the society believes and practices (Gholami, 2011).

 Bowen argues that business entities exist and operate at the pleasure of the community and therefore it must adhere to guidelines laid by the community. Businesses are moral agent and therefore should make correct decisions.

Generally business should be good to the community. Business is a social institution and it should only act within its powers accordingly

Organizations should not be too good in participating in CSR activities but rather should focus on profit maximization. Social responsible behavior will be rectified by profits Custom Dissertation..

If corporations do not undertake CSR activities the government always intervenes in their own way. CSR mostly focuses on the consequences of their action (Herbas, 2018). 

The activities of an organization can be measured Do My Research Paper. and determined if they are too good or just good. Corporate social responsibility of an organization can be evaluated by social rating of the firm. 

This involves social agencies investigating the performance of an organization CSR and rating it according to its impact on social and environmental aspect. 

The social agency collect information from website, interviews, annual reports of the company, business professional and observation by knowledgeable persons. CSR can also be

This involves College Paper Help. communicating the environmental and social effect of an organizations economic activities towards the interest of the society (Malik, 2018). An organization may also to focus on one CSR activity like protecting the environment, participating in charity activity, research project and development (Pyo, 2013).

Payment of taxes by organizations presents a social issue to corporate social responsibility. 

Organizations like  Global reporting initiative (GRI) affects the CSR activitiesby influencing the method through which a clear format of sustainable reporting should be done. 

The GRI recommends that organizations to provide detailed report of their tax obligation payment. This is because it’s frequently desired by users of sustainability reports and the organization contribution to the sustainability of the whole economy (GRI 2011, 25).

Tax payment is a positive  contribution towards having a stable economy. However some people believe that tax hinders creativity and innovation, creation of job, production level, development of the economy and believe that tax payment distract social wellbeing. CSR activities tax avoidance show how each affect cost and benefit of another.

Some organizations believe that corporate tax and CSR are the same and thus complement one another (Mackey et al, 2007). Socially responsible firms focus on allocating resources to CSR activities. Neither the manager nor the influential  

stakeholders consider corporate tax payment as a way achieving their social moral goal. As a matter of fact paying less tax could be having more social benefits. CSR activities can be used to offset image of the organization caused by accusations on fraud and pollution of environment (Merrill and Hansen 2009).

There theories developed which suggest that CSR is not related to tax payment.

 Social responsible activities are those that focus on maximizing shareholders value. Firms that engage on CSR activities have a lower cost of revenue and high revenue income. Tax avoidance and CSR both maximize the value of the organization independently. 

Thus no relation between CSR and tax payment (Lev, Petrovits, and Radhakrishnan 2010). Sustainability report n research done shows that public public corporation affect tax policy through their influential activities. 

Many   companies do not disclose sustainability reports, though they may be compliant with CSR reporting guidelines. GRI requires organization to report on only those things that are material. “Relevant topics and indicators are those that may reasonably be considered

Environmental, and social impacts, or influencing the decisions of stakeholders, and, therefore, potentially merit inclusion in the report materiality. is the threshold at which topics or indicators become sufficiently important that they should be reported.” GRI states (2011, 8) .In matters regarding materiality. Tax avoidance represents firm’s irresponsible behavior to avoid its obligation to the society. (Dowling 2014)

Organizations should oblige to their moral responsibilitand pay tax and participate in CSR activities. CSRactivities should be conducted in way and manner that the business does not get away from its main purpose and activities. CSR activities should be directed towards attaining the sustainable development goals.