Corporate social Responsibility as a Risk Management Tool

Change in an organization is often inherently characterized by risks. In any organizational change, there are risks that should be tackled in order to enhance sustainable change management and development. This is because change exhibits uncertainties that an organization may not fully forecast.

The society within which an organization operates is subject to many uncertainties that require effective change management and planning (Kytle and Ruggie, 2005). Due to this fact, it is necessary to engage members of the society and other stakeholders in an organization’s change management because it is only through such an action that the organization may predict the trends of change in the society and effectively plan for the changes so as to achieve organizational objectives in a constantly changing environment.

Corporate social responsibility contributes to risk management most especially in global environments. This is because globalization is associated with an organization’s interactions and involvement with stakeholders from diverse cultural, technological and political environment.

Corporate social responsibility enables an organization to manage risks involved in international business through networking, empowerment of global stakeholders and reducing the dynamic tension among stakeholders (Kytle and Ruggie, 2005).

Through networking, an organization is able to loosen its control over major operations within the organization. The company’s value chains are opened by CSR through networking, hence reducing the risk inherent in closed value chain systems.

CSR also has the capability of empowering global stakeholders who may have otherwise not understand the organization better in the absence of CSR. Since CSR involves an interaction with stakeholders, it creates awareness among the stakeholders, hence reducing risks associated with lack of awareness among stakeholders.

Leave a Reply

Your email address will not be published. Required fields are marked *