The Importance Of Csr And Its Reputation As A Leader Of Corporate Responsibility

The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to

CSR is all about businesses understanding the effects that they have on the community/wider world. Businesses will use this impact in a positive way to

Based on my interpretation of CSR, I see it as a voluntary obligation that companies have promised to their stakeholders to fulfill by improving, or at least not harm, the environmental and social wellbeing. When companies engage in CSR, they voluntarily promise to, for example, carry the responsibility to protect the environment and take actions against bribe or other corruptive activities related to their business. It certainly has some positive influences to specific areas based on my knowledge gained from other classes; nevertheless, when judge CSR in the context of total impacts on our society and environment, it is obvious that CSR has failed its mission to lessen the negative impacts of business based on the evidences that provided by the author. Also, since there is a strong positive relationship between CSR behaviors and consumers’ reactions to a firm’s products and services, it seems to me, now, that CSR for the most companies is just a fancy cover that helps them to create or promote a good image and reputation. The recent case that shows the failure of CSR of Volkswagen even make me believe that CSR programs may be just a marketing or public relation exercise for many

Corporate Social Responsibility (CSR) is something that affects all companies and should be an active factor in the company’s decision making. It is something all corporations need to care about. CSR is when business’ or corporations take part in an initiative or campaign for a cause that will benefit society and/or in some way make the world a better place (Taylor, 2015). Initially, Corporate Social Responsibility started to take shape around the 1950’s, but some say that it dates all the way back to the 1800s, the idea of CSR was seen (Carroll, 2007). One may think that because it is dated so long ago, it doesn’t have an important impact today nevertheless, it is proven that Corporate Social Responsibility is a pathway for entities to self benefit as they are in the process of benefitting society.

In this article, “The Truth About CSR,” authors Rangan, Chase and Karim stress the importance in aligning a company’s social and environmental activities with its business purpose and values (Rangan, Chase, & Karim, 2015, 41). Outcomes of CSR programs should be a “spillover” and not a primary focus of a business, expressing concern towards social responsibility and corporations failing to contribute to society accordingly (Rangan, Chase, Karim, 2015, 42). There is a great deal of importance in companies refocusing their CSR activities on a primary goal and in providing an organized process for bringing consistency and discipline to CSR strategies (42). Rangan, Chase and Karim want corporations to understand why it is important for them to evaluate their CSR activities and refocus them towards the goal of reinforcing the firm’s societal and environmental actions, while also ensuring their actions add to the overall purpose and values of the corporation. According to the authors, even though

Even though customers are a major key to success of any business, limiting CSR practices to an external group of stakeholder is insufficient. From the customers’ side, the focus is “on the corporate brand and its societal relationships with external constituencies.” (Lacey, Hensel 316). It is undeniable that implementation of CSR can attract the customers and lead them to be a significant are source of a financial gain. That is because CSR changes the way consumers behave in the market and alter their beliefs toward the company standards.” (Lacey, Hensel 316). Nevertheless, extensive focus on the social gains may cause the business to suffer financially. If that happened, the case is considered to be a failure of executing CSR. Again, this is a result of shifting all the business gears to benefit a sole group the stakeholders.

This recent reality, combined with globalization, is forcing companies to forge new kinds of relationships with buyers and countries. The financial valuation of companies are taking ever greater account of intangible elements, such as brands, patents and the company’s general image, with companies being bound to take account of these things in an effort to satisfy their shareholders. Environmental protection has become a highly motivating factor, and companies are being pressed to identify stakeholders with whom to team up. With brand value and reputation increasingly being seen as one of a company’s most valuable assets, CSR is now seen as building loyalty and trust amongst shareholders, employees and customers ( Tssa, (n.d.)).

The benefit to business of good Corporate Social Responsibility is difficult to quantify as it varies depending on the nature of the enterprise. Some scholars believe that there is a business justification for CSR. That is, what is good for the environment and society will be good for company profitability. And studies have shown a slightly positive correlation between CSR and financial gain (Steiner and Steiner, 2006). However, as Freidmanism claims, the first responsibility of business is to make enough profit to cover the costs for the future. If this social responsibility is not met, no other responsibilities can be (Hargreaves, 2006). Therefore it is critical that CSR activities are included in strategy formulation and that the level of resources devoted to CSR is determined like any other strategy – through cost/benefit analysis. Corporations will not throw money away…they need to see it

Current approaches to CSR are fragmented and/or disconnected from business goals. Many firms still consider CSR as another generic public relations problem in which media campaigns and CSR reports are used to paint the company as a positive ethical, social and or environmental advocator and supporter. For example, the annual reports discuss a firm’s sensitivities to CSR issues, but completely lack the entire story and offer no further forward commitments from the firm. Further, the ratings and rankings measurements are self-appointed by the firm, not always accurate to validate the work and direct impact to what they are measuring, and the criteria base varies widely and weighed differently in the final scoring. Worst of all the data lacks impartial auditors for validating the data to ensure the ratings have been accurately met, and data is statistically significant and a good proxy for what it is supposed to reflect. This has resulted in reactive initiatives designed to appease vocal

CSR lacks universal methods. The United Nations Industrial Development Organization (UNIDO) mentions that it is important to draw a distinction between CSR as part of strategic business management concept and charity, sponsorships or philanthropy. The latter applications make valuable social impacts that enhance the reputations of the companies, however, CSR is a continual effort instead of an instance. A few features that CSR should focus on are: eco-efficiency, employee and community relations, environmental management, gender balance, responsible souring, anti-corruption, stakeholder engagement and human rights. Utilizing some of these key features a company can bring competitive advantages into the market place. Increased sales and profits from operational cost savings as well as improved reputation and brand image and customer loyalty can result from a well-defined CSR strategy.

Then again CSR can be dependent on each individual company on whether it holds any importance to key corporate objectives. For example many oil companies whose product is in such high demand that it isn’t necessary for the business to adapt any CSR strategy as the product is so inelastic that people will by it regardless of image or reputation. This is controversially not the case for the oil provider giant BP who recently suffered a massive public relation nightmare after a massive oil spill, leading to a big hit in their reputation and brand image. BP has now ironically made CSR one of their core objectives to help rebuild the reputation and gain market growth.

Therefore, corporate’ activities have strong influences to the stakeholders. Hildebrand,D,et,al (2011) argued that under a specific but identifiable situation, a company’s CSR actions are able to satisfy stakeholders’ higher-order and self-related demand, meanwhile enabling the stakeholders to identify with the company. On the other hand, Piercy, N. and Lane, N.(2009) indicated that CSR seems to be the most efficient way for the corporate marketing efforts of most firms. It may enable the stakeholders to be loyal even life-long customers of the companies.

radical and user driven innovation. The paper then reviews the major objects of corporate social

Today a big part of customer satisfaction is depending on values which company stands for; and businesses are changing in to values-based business. In a values- based business, values which are co created among CSR, drive the sustain competition for the company in the market. (Enquist et al. 2008) (Edvardson & Enquist 2008) for a company wanting to get financial profits through values, a new strategy should be applied to enjoy the benefits of CSR value making. and CSR would be a part of the business model being integrated with the business strategy. Corporate responsibility is better understood as one dimension of corporate strategy (Enqusit et al. 2008) with this approach CSR is not only charity rather a part of the business model for a values-based business. But even “philanthropy is still a competitive advantage when it is in a proactive way”. (Edvardson & Enquist 2008) companies these days embed their CSR experiences and reports as a highlighted means for advertisement and creating a good image of themselves in public even though sometimes image making of CSR is being missused and companies reputations are not always on the basis of true CRM practices.

CSR can improve the company’s reputation and branding and this in turn improves the prospects for the company to be more effective to attract new customers and increase market share.