Corporate social responsibility may be described or referred to as the unspoken contract, which exists between a business society and society. This relationship is based on the kind of business that organizations operate within a given society. It is worth appreciating that corporate social responsibility is an important aspect when it comes to running and operating business enterprises. This is because corporate social responsibility gives businesses an opportunity to offer back to the society what they have offered the society in return. This is the goodwill that exists that ensures that as the organizations pursue their goals, they interact with others inside a larger context of the society to meet their goals.
Thus, corporate social responsibility is a key point in the business world since it enables the companies to get corporate objectives with the social challenges which are facing the environment in which they operate. In essence, research confirms that corporate social responsibility has got benefits that enhance the productivity and profitability of an organization in the future. What is important is to understand the fact that this should be a long term initiative that should be set up by organizations to work towards initiating forums that ensure progress is realized.
Key learning point’s
Corporate social responsibility is a subject that still remains to be controversial in the general society. However, it is worth noting the fact that despite being controversial, it is a very critical aspect of organizational progress. Organizations intertwine with the societies in which they operate in mutually beneficial ways driving social progress and affluence. Companies create most of the jobs, wealth, and innovations that enable the larger society to prosper. They are the primary delivery system for food, housing, medicines, medical care, and other necessities of life. Without modern-day corporations, the jobs, taxes, donations, and other resources that support governments and nonprofits would decline significantly, negatively affecting the wealth and well being of society as a whole. Businesses are the engines that propel us toward a better future.
Why is Social Responsibility important?
CSR is important because it influences all aspects of a company’s operations (Werther & Chandler, 2010). Increasingly, consumers want to buy products from companies they trust, suppliers want to form business partnerships with companies they can rely on, employees want to work for companies they respect, large investment funds want to support firms that they perceive to be socially responsible, and nonprofits and NGOs want to work together with companies seeking practical solutions to common goals. Satisfying each of these stakeholder groups allows companies to maximize their commitment to their owners, who benefit most when these groups’ needs are being met.
CSR is increasingly crucial to success because it gives companies a mission and strategy around which multiple constituents can rally, the business most likely to succeed in today’s rapidly evolving global environment will be those at best able to balance the often conflicting interests of their multiple stakeholders. Lifestyle brand firms, in particular, need to live the ideals they convey to their consumers. It is important to recognize that CSR is not just about doing the right thing. This is because corporate social responsibility also offers benefits that are directly enjoyed by the business (Werther & Chandler, 2010). Building a reputation as a responsible business differentiates your business and may create added value and marketing capital.
Many consumers prefer to buy from ethical businesses and increasingly prefer to invest in them. Companies often favor suppliers who demonstrate responsible policies, as this helps them to minimize the risk of any damage to their own reputations. Companies increasingly want to demonstrate their CSR by occupying sustainable buildings (Yakovleva & Natalia, 2005). In the business world, customers have a tendency to prefer to deal with responsible and caring companies. For example, sales of ‘environmentally friendly‘ products continue to grow, and these products often sell at a premium price.
Social responsibility examines the direct benefits of CSR, which include: a good reputation makes it easier to recruit employees, employees stay longer reducing the costs and disruption of recruitment and retaining, employees are better motivated and more productive, corporate social responsibility helps ensure you comply with regulatory requirements, activities such as involvement with the local community are ideal opportunities to generate positive press coverage, good relationship with local authorities make doing business easier, understanding the wider impact of your business can help you create profitable new products and services and CSR can make you more competitive and reduce the risk of sudden damage to your reputation.
Business is a critical factor in the world’s economic and social development. Business interactions with society go beyond economic impacts on nations that include the supply of goods and services, generation of profits, provision of jobs, tax payments, and trade development (Yakovleva & Natalia, 2005). Consequences of business operations affect the interests of society not only through products and services supplied but also through impacts on traditions, culture, and social constructions. As a business grows in size and expands geographically, more groups of society are affected by business operations. These affected groups feel that the business has an obligation to share its profits and benefits with society as the society helps to sustain its existence and operations. Today, society expects the business to act in a way that would satisfy society’s interests and share benefits with those members of the society who are not business shareholders.
Business is working towards increasing its positive inputs into society through making voluntary contributions to education, health, social services, arts, and culture as well as aligning its practices in accordance with societal norms and expectations in the areas of employee relations, impact on the environment, supply chain and many others that were previously considered to be spheres of economic and legal consideration. A concept of corporate social responsibility suggests that business has no obligation to contribute to social progress beyond economic transactions of a firm (Yakovleva & Natalia, 2005).
Corporate social responsibility implies that businesses should consider the interests of those affected by business operations and respond to their desires and concerns. Corporate social responsibility explores the relationship between business and society in the context of satisfying society expectations, achieving social goals, and bringing benefits to society that, in many cases, implies voluntary actions, which are prescribed by moral and philanthropic values rather than by legal requirements. Thus, companies have to meet a variety of responsibilities assigned to them by law, shareholders, other stakeholders, and the society at large in order to undertake their duties legitimately. This will eventually form the foundation of progress, which is aimed at within the corporate sector.
Werther, W. B., & Chandler, D. (2010). Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. California: SAGE.
Yakovleva, & Natalia. (2005). Corporate social responsibility in the mining industries. New York: Ashgate Publishing, Ltd.