Corporate Social Responsibility: Taking Responsibility For Actions In Businesses

Many consumers require companies to change the way they carry out their operations by becoming more transparent and taking responsibility for the issues in society. Consequently, Corporate Social Responsibility (CSR) has taken root in today's corporate world. Organizations that fail to incorporate CSR programs within their schedules do so at their peril. CSR involves taking steps to ensure that the operations of a business are associated with positive social and environmental effects. Firms take stock of their activities to incorporate strategies social and environmental conservation issues to benefit both the company and the society in general. Various reasons make CSR a useful endeavor for businesses. Primarily, embracing socially responsible approaches in conducting business helps firms attract and retain customers, which is crucial for the long-term success of the company. Additionally, socially accountable organizations attract a great deal, the employees eager to be part of making a change in the world. Top talent is key to business to thrive. Besides, having a useful CSR model helps build the business reputation within and outside the industry, through brand differentiation. Moreover, CSR saves businesses a lot of money through innovative technologies geared towards environmental conservation. Although CRS breeds business success, its application is not without hurdles. Critics of CSR argue that the approach costs a lot of money to implement, which is a challenge for smaller companies. Furthermore, CSR investment conflicts with the profit motive of businesses. In this regard, this paper argues that CRS is suitable for businesses since it attracts customers and employees, builds a business reputation, and saves the company money.

One of the significant benefits of adopting a corporate social responsibility model is the engagement of customers. The adoption of socially responsible policies and programs goes a long way in attracting customers to the business. Social responsibility presents the firm as a caring partner in the social well-being of the community. Customers are motivated to interact with such businesses since they are aware of their social impact in the nation. According to Grayson & Hodges (2017), 'many individuals will gladly pay a premium for goods, knowing that part of the profits will be channeled towards social causes near and dear to them.' The increased number of customers is crucial for business success in the long-term. Furthermore, companies may experience increased foot traffic when they enhance the community they operate. For instance, banks dispensing low-interest loans are more likely to witness growth as a result of their socially directed initiatives. Therefore, CSR may contribute to the development and expansion of companies by attracting and retaining customers.

Additionally, CSR helps businesses achieve their long-term development goals by retaining top talent. Socially responsible companies attract professionals who are ready to be part of organizations making a change in the world. The millennials form a significant percentage of the current workforce in the united states. While the size of their paycheck drives many employees, passionate workers are determined to enjoy their work and make the world a better place than they found it (Saeidi et al., 2015). Such employees are attracted to companies whose operations are beneficial not only to the shareholders but also to the community. In this case, hiring such staff changes the game for the firm in achieving its developmental goals. Collective employee efforts from a talented team help firms achieve substantial results in their business activities. For instance, companies such as Sara Lee have developed sustainability teams to help the company in coming up with sustainable strategies. The company creates grass-root networks to tap talented employees and recruit them in working towards achieving the company’s CSR priorities (Saeidi et al., 2015). In this case, employees are motivated to stay longer and saves the firm recruitment hurdles and disruption of schedules.

Furthermore, corporate social responsibility can help firms build a good business reputation, which is a point of comparative advantage. Investment in CSR makes a company look socially responsible. Additionally, a good CSR model makes the company look responsible among peers. The positive reputation of the company makes it more competitive in comparison with other firms in the industry. Such companies gain more contracts and receive more offers than their counterparts. According to McWilliams (2015), 'companies often favor suppliers who have responsible policies, since this can reflect on how their customers see them.' Having the upper and in a competitive venture is crucial for the success of the company. Besides, a good reputation attracts not only suppliers but also customers to the business. Grayson & Hodges (2017) note that 'some customers do not just prefer to deal with responsible companies - they insist on it.' Building a good reputation through CSR can assist companies in thriving business-wise.

CSR also contributes to the innovative abilities of companies in their efforts to develop socially and environmentally friendly approaches. In the CSR context, innovation as numerous benefits both for the company and for society. The drive for socially acceptable and environmentally friendly products has ked companies into making huge innovative steps. For instance, “using the lens of sustainability, Unilever was able to innovate new products such as a hair conditioner that uses less water. Without sustainability, the company’s research and development efforts possibly would not have led to such a product” (McWilliams, 2015). Besides, the innovation of new technologies and products differentiates companies from their rivals. While brand differentiation was the primary reason for CSR in the past, it now a result of innovations achieved through CSR programs. Companies now can voice their values in the business model through CSR. The conflict between Coca-Cola and Pepsi is an example of brand differentiation through CSR. The two organizations pursue slightly different CSR strategies through the innovation of newer technologies such as zero net water usage and sustainable packaging (McWilliams, 2015). The developments differentiate each of the rivals since the products and technologies are unique to the firms.

Critics of CSR cite the high cost of implementation as a disadvantage to businesses. According to Bachmann & Ingenhoff (2016), investing in the implementation of CSR projects costs a lot of money, which may drain organizations of their funds. In this case, the cost of production rises significantly when a company is involved in CSR projects. The costs of implementation fall disproportionately to small businesses. Although big corporations have funds budgeted for CSR policies, the case is different for small firms with low numbers of workers. The projects may be burdensome, especially if the firm cannot afford it. Despite the claims of high costs, investing in CSR saves companies a lot of money. By reducing the number of resources used in the production, the waste products, and the emissions, firms alleviate additional costs that could be used in restoring the environment (Bachmann & Ingenhoff, 2016). Therefore, the benefits gained by implementing CSR are more when compared to the cost of the programs.

Besides, the investment in CSR contradicts the profit maximization goals of many organizations. The implementation of CSR is an obstacle for both large and small businesses. Often, companies have the primary purpose of making profits when they engage in transactions. A significant number of corporate social responsibility critics believe that it is an exercise of futility (Herrera, 2015). In this case, the executive responsibility of managers is the fiduciary duty of maximizing profits for the shareholder’s investment. Therefore, forsaking profits while chasing societal benefits is contrary to business priorities. However, Herrera (2015) notes that investment in CSR meets the business' preferences in the long run. CSR creates a conducive environment for the company to thrive and minimizes drawbacks through adverse publicity.

In conclusion, corporate social responsibility is a rewarding exercise for businesses. The implementation of CSR models helps firms attract and maintain their existing customers. Besides, it helps companies attract productive and talented employees. Such workers are essential in driving the business to success. Other benefits of CSR for businesses include brand differentiation and innovation. Firms that engage in CSR are more likely to come up with better technologies and products which improve efficiency. Besides, the uniqueness of each company’s strategies differentiates them from their rivals in the industry. However, critics believe that the costs of implementing CSR projects are burdensome, and against the maximization of profit goals. Regardless, the implementation of CSR is crucial for the long-term success of the business.

References

Bachmann, P., & Ingenhoff, D. (2016). Legitimacy through CSR disclosures? The advantage outweighs the disadvantages. Public Relations Review, 42(3), 386-394.

Grayson, D., & Hodges, A. (2017). Corporate social opportunity! Seven steps to make corporate social responsibility work for your business. Routledge.

Herrera, M. E. B. (2015). Creating a competitive advantage by institutionalizing corporate social innovation. Journal of Business Research, 68(7), 1468-1474.

McWilliams, A. (2015). Corporate social responsibility. Wiley encyclopedia of management, 1-4.

Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of business research, 68(2), 341-350.