Corporate Social Responsibility and Business Management Fundamentals

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is the active and voluntary integration of social and environmental concerns by companies into their business operations and relations with their partners (employees, investors, shareholders, etc.). The goal is to improve their competitive situation and their added value.

Business organizations can perform many actions with the idea of improving, such as:

• Developing internal codes of conduct.
• Establishing measures to promote the reconciliation of family and work life for employees.
• Training workers on the environmental aspects related to the manufacturing processes of the company.

The application of CSR positively affects the performance of businesses; therefore, all parties must cooperate actively.

Functions of the Entrepreneur

The functions of the entrepreneur can be summarized as follows:

• Plan: Create an action plan once the economic situation of the moment has been diagnosed and analyzed.
• Manage: Direct all elements of the company toward obtaining pre-set or planned goals.
• Organize and Coordinate: Arrange all available elements of the company so that the operation of the whole is as effective as possible.
• Control: Monitor how well the objectives in the plan are being met and correct any deviations.

Classification of Companies

Companies can be classified using various criteria.

Classification Based on Activity

This refers to the three major sectors into which economic activity is divided:

• Primary sector: Companies engaged in activities relating to natural resources (e.g., a farm).
• Secondary sector: Companies engaged in industrial or transformation activities (e.g., a textile factory).
• Tertiary sector: Business enterprises (selling items) and service companies (e.g., travel agencies, banks).

Classification According to Size

Companies can be classified into large, small, or medium depending on their size. To define the size, several criteria are used:

• Economic criteria: The turnover, i.e., the revenue from sales.
• Technical criteria: The level of technology and innovation capital.
• Heritage criteria: The heritage that the company has (property, rights, obligations, etc.).