Businesses will engage in corporate social responsibility actions for various functions. Are these actions geared towards bringing more wealth and prowess to the business or are they done as a way of simply ‘giving back to the society’? Well, by strategically practicing corporate social responsibility, a company can both make profits and the world a better place at the same time. CSR (corporate social responsibility) is a built-in mechanism in a company that ensures a business’s adherence to law, ethical standards and international norms under which a business will monitor the impact of its activities on the environment, consumers of its products, its suppliers and other stakeholders and the public at large (“Corporate social responsibility”, n.d., par. 2). Community based projects, giving aid to local organizations and poor communities in developing countries are some approaches applied in corporate social responsibility. A company may engage in community activities for the sake of solving a crisis but ends up realizing an additional source of profit and value to its product and services. The benefits of a company’s social responsibility involvement are more than its losses if any, particularly in the long-term (Boddy, 2007, chap 5). The issue of sustainability is important, since it takes time to build a company’s brand, reputation and profile. As a result, this helps to attract and retain various stakeholders. In addition, employees of such a company attain personal and professional growth, and customers are also attracted. The essay seeks to explore the issue of whether pursuing corporate social responsibility is of benefit to an organization, or not.
To start with, being socially responsible builds a business’s reputation, brand and profile. Brand equity is solely dependent on trust, credibility, reliability, quality, and consistency all which are vital aspects of a business’s success. Based on these ethical values, a business can differentiate its brand, giving itself a unique selling platform in an otherwise competitive market by merely building a reputation for integrity and best practice. A good business is naturally sensitive to new market trends, innovation and responsive to markets. A socially responsible business is more likely to openly accept feedback from stakeholders, consumers and retailers and by doing so, it is likely that ideas on new products, procedures and markets are circulated. Consequently this accords the company in question a competitive edge. While advertising for their products, businesses are likely to point out the environmental and social benefits attainable. For instance, an oil company might talk about the benefits of using unleaded petrol, or wind turbines. This further accords such a company a selling point though their goal was initially social responsibility. Local community- related activities attract positive press coverage which goes a long way into cementing a good reputation. The end result of all this is a loyal customer base as well as building new markets. Customers are mainly attracted to socially responsible companies. On the contrary, businesses that perform poorly can damage their brand name and reputation when exposed (Taylor, 2009, 1).
A socially responsible business has a better human resource tradition, implying attraction and consistent retention of employees. It may be as a result of the aforementioned company’s ethical grounds or presence of improved human resource policies. It is normal for human beings to want to do well and feel gratified when their work has a positive impact on someone else, which explains why most people will want to work for socially responsible companies. Of equal magnitude is the fact that employees in these businesses have increased commitment, performance and job satisfaction because they are involved in decision making and they own the business as well. They are the sole source of innovation and basically define a company’s success, hence their satisfaction will go a long way to improving the business’s productivity. When employees are retained they reduce costs and disruption related to training and recruitment gain for the business (Potts, 2007, p. 11).
Socially responsible organizations boast of better risk managers. These businesses have taken time to build their enviable reputation and would not be willing to jeopardize it through negative attention like environmental accidents and scandals. A business interested in the impact of its activities to the community, environment and economy exhibits a prudential way of anticipating and managing risks. They often have adopted that culture of doing things right. This also equates to good relationship with local authorities that also enhances business.
Governments have realized that their sustainability goals are attainable solely through increased engagement in the business sector. Some governments are actually using CSR indicators to rule on export assistance contracts and procurement, a measure that is advantageous to CSR conscious firms. This has seen businesses with sensible CSR modalities having good relations with regulators. Similarly, they create strong public, private and societal alliances giving the business the ‘social license’ to operate in the society. They have better ability to address change because of their regular interaction with stakeholders which enables them to anticipate potential change on economy, society and environment (US Chamber of Commerce, 2005, p. 1).
CSR is a big attraction to investors and financiers alike and its prowess is a reflection of good management and positive reputation to a potential investor or financier of a business. As far as the supply chain is concerned, there is the possibility of building effective and efficient ones. Businesses with long-term relationships can help each other reduce risks, like the larger ones can stimulate the smaller ones to implement a CSR approach in their dealings. (Potts, 2007, p.12). CSR in a business comes with considerable operational efficiency and cost saving. This is as a result of awareness attained from relationships made and activities participated in which bring forth innovativeness and subsequent means of cutting costs (Thomas, 2007, p.1)
There is the need for businesses to adopt CSR activities not only out of goodwill but also as a way of improving their turnover. A survey in the U.S chamber of Commerce conducted in the late 2005 was in agreement that companies need to make corporate social responsibility a priority (US Chamber of Commerce, 2005, p. 1).
Firms have reported reaping huge benefits from their corporate social responsibility initiatives like positive media attention, community and customer satisfaction, to mention but a few. High-profile lists of the most responsible companies exemplify this publicity, For instance, since 2005, the Innovest firm “100 most Sustainable Companies in the World” list has been released yearly at the World Economic Forum. In his speech at the launch of the U.K Network of the UN Global Compact website, in December 2006, Dr. Kim Howells stressed on the essentiality of responsible business in driving sustainable development, tackling climate change and even preventing and resolving conflict (Potts, 2007, p.13). It is all a reminder that corporate social responsibility is of great value to any business, not only as a humane act or the profits to be gained but also for the future and sustainability of that business.
Reference
Boddy, D., 2007, Management; An introduction. Harlow: Pearson Education.
“Corporate social responsibility”, n.d Business Link. 2010. Web.
Potts, J. Ed. 2007. Corporate Social Responsibility: An Implementation guide. Winnipeg: International Institute for Sustainable Development. Web.
Taylor, D. 2009. “Why Social Responsibility Is important to Your Business” , Articlesbase. Web.
Thomas, T. 2009. “Is corporate social responsibility good for business?” ExecDigital. Web.
U. S Chamber of Commerce, 2005. “The state of corporate citizenship”,Web.