Explain the relationship between stakeholder engagement and corporate social responsibility. (10)
Companies used to be solely focused on profit maximization, ignoring the importance of other elements that contributed to the company's growth. However, as time has passed, this concept has been phased out of the system, and a new system has emerged that focuses on both the interests of stakeholders and the maximization of profits; the reason for this is that the company must return what it has taken from its society or surroundings, namely, resources and privileges, which include the stakeholders of the company and the environment.
The relationship between stakeholder engagement and corporate social responsibility is overlapping in nature, in the sense that both ideas emphasize or focus on incorporating societal and stakeholder interests into business operations. This concept is thus internally related to the concept of Corporate Social Responsibility because the company owes a duty to its internal and external stakeholders, and thus the company's success is dependent on the stakeholders' perceptions, which influence consumer decisions and the company's reputation. Failure to recognize the interests of stakeholders can result in financial loss for the organization and raise the risk involved. Corporate Social Responsibility (CSR) is a form of self-regulation in which a company actively analyzes society, the environment, global trends, ethical values, and regulatory requirements for compliance. CSR helps the organization achieve its primary goal by extending its responsibilities and commitments to secondary stakeholders and other members of society. The CSR process encourages organizations to take actions that benefit society as a whole, including the environment, communities, and people.