The Importance of Corporate Social Responsibility in Business

“Corporate Social Responsibility (CSR) is being promoted as a company practice that enables firms to do well whilst doing good.” Here is why:

Long Term Success of the Business

Through involvement in corporate social responsibility, “a company is able to meet the interests of the company’s stakeholders and the needs of the environment within which it operates.”4 As a result, the company responds positively to the actions of the company by contributing positively to the success of the company.

For instance, if a company strives to conserve the environment, it reduces the impacts of environmental pollution such as climate change. As a result, the company will be able to operate from an enabling environment in order to produce enough quality products or services that will contribute to the company’s profitability in the long run.

Customer Satisfaction

Proponents of Corporate Social Responsibility suggest various elements and dimensions of CSR which can be used by businesses to create a positive impact both within the organization and in the environment within which it operates. One of these elements is the view of CSR as a policy to guide a company’s actions towards its consumers.

Good Public Image = Success

CSR can also be viewed as a form of philanthropy including monetary donations and aid extended to social organizations and underprivileged members of the society. Critics of CSR argue that this action is not good for the company because it does not add to the development of skills in the society.

However, corporate social responsibility proponents argue that philanthropy leads to community development, hence causing sustainable development in the society where the company operates. This contributes to the success of the company as well.

Therefore, it is true to say that CSR in this perspective of philanthropy enables the company to do well whilst doing well.

Achieving Strategic Goals

Corporate Social Responsibility may also be incorporated directly into the company’s business strategy. This shows a company’s commitment to the communities in its business activities. CSR can also be used as a means of creating CSR interest through shared value model whereby the social welfare of the society is considered by a company in its business.

In order to thrive, a company needs healthy and educated workforce, enabling environment and a functional government. This enables it to compete effectively in the market.

Accountability = Strong Stakeholder Relationships

Social accounting is also a CSR practice which can be used by companies to account for its actions. Through social accounting, a company can be able to communicate the social and environmental effects of its economic actions to relevant stakeholders in the society and the society at large.

This practice is an emphasis of the element of corporate accountability. D. Crowther suggests that “Some companies produce audited annual reports which address sustainable development and CSR issues (Triple Bottom Line)”2.

Attraction, Retention and Motivation of Skilled Employees

Corporate Social responsibility is also used by the Human resource department to aid in recruitment and retention processes. During interviews, students often ask the corporate responsibility framework of the company.

A company with a tangible evidence of a working CSR policy will be at a better position to hire the best employees. CSR will also boost the perception of the company’s staff about the company especially if they are involved in such activities as payrolls, fundraising and volunteers.

CSR is therefore found to motivate employees and encourage lasting relationship between them and the company’s customers.

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