Evaluate the benefits for a company of practicing Corporate Social Responsibility
Evaluate the benefits for a company of practicing Corporate Social Responsibility
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Date:__25 June 2013___ Traditionally companies focus primarily on gaining profits without regard for the community and environment. Ignoring the waste and pollution for example causes adverse impact for the social. Air pollution, for example, caused by factories with chemical materials can weaken respiration system. It was believed that the concern about environment produces extra expenditures reducing firm’s profit. Thus, they tend to override and ignoring the issue. In contrary, majority of the costumers expect more respects, supports, and cares from factories for the communities and environment. In addition, the government through policies has tried to force the corporations being care about their responsibilities. However, a concept including strategy to build a good relationship between corporations and their stakeholders has been introduced.
Corporate social responsibility (CSR), the concept, has been practiced and developed since the 1970s receiving good responses from government and society around the world. CSR today is performed as a strategic management approached. A research by Preuss (2011, p. 23) mentions the 4Ps of innovative CSR on the basis of CSR project content, processes, positioning, and paradigm. A firm could receive worthwhile benefits through its CSR activities by being different from their competitors. Therefore, this essay evaluates the benefits of CSR to a company through several examples of successful achievement.
According to Madzimure (2013) article, the benefits of CSR beyond financial return but provide strategy to protect firm’s sustainability. Organisation can uses this concept as instrument in human resources management, risk management, brand differentiation and obtaining an operation license (Madzimure, 2013). Preuss (2011, p. 19) defines the advantages of CSR namely, competitive advantage, which affording the firm’s reaction to external factors faster and better than the competitors, cost and risk reduction by building relations among stakeholders avoiding social problems, reputation and legitimacy, and synergistic value creation which bringing promotion value growth.
Recent research from Galbreath (2009, p.111) explains that the CSR cover various associations consisting internal and external stakeholder as stakeholder theory. Hence, carrying the important roles in social and environment, corporations are expected to pay more attention about their responsibilities (Madzimure, 2013). However, byapproaching CSR from the beginning, both small and large corporation could find a number of advantages for an organisation, society and industry levels (Preuss, 2011, p. 25).
Firstly, CSR helps the legal responsibility to comply with local, state, federal, and relevant international laws (Galbreath, 2009, p.111). An article by Madzimure (2013) states that avoiding government interference in their business through taxation or regulation is common with multi-national companies when they are doing business in developing countries. Being aware about community activities organisations can convince governments and publics. For example involving in education program, software company could have attention from the students. (Madzimure, 2013) Firms have to face additional behaviours and activities that society desired such as contributing party to social organisations, when they also can gain some advantages from it (Galbreath, 2009, p.111).
Through paying attention with poverty a firm produce low price products contributing to the increasing of costumer demands. The benefits, moreover, affect both company and costumers. For example, conducting a discount for grocery purchase for their product, an instant food manufactory can received growing income and the society spends less expense. (Preuss, 2011, p. 23) To maintain good relationship with community, Fenn (2013) describes organisation can be a donator for local or larger charity and thus, again, providing advantages for both sides.
Secondly, Galberth (2009, p.118) argues that CSR benefits both to the environment and the organisation. This social project content is clearly focused on environmental side, which driving manufacturers has to replace heavy metals, solvents or other toxic ingredients with safer and natural materials (Preuss, 2011, p. 23). A pharmaceutical company could protect the environment by utilising waste water treatment, for instance, in their production process. As a result, the entire community may receive the advantages and the corporation will be able to avoid fines or disapproval federal pollution standards permission, because of healthier environment. Other example is, investing resources in cogeneration technology which processing heat into energy, manufacture can substitute electrical power consumption for the local utility. Economically, both factory and community
spend fewer budgets for electricity. (Galbreath, 2009, p.118)
Through CSR, manager can use improve employee satisfaction (Preuss, 2011, p. 25). Ingenhoff and Sommer, (2011, p. 85) founds CSR can also support employee’s activities, by providing educational improvement programme such as scholarship. Moreover, positive employee perceptions to the company can be improved by involving them in charity and fundraising activities or community volunteering (Madzimure, 2013). Skilful employees can be maintained by trying to keep them motivated and loyal which may optimise organisation productivity. A firm can incorporate their staff welfare plans in order to constructing community relationships. For example in a charity project, staff should be involved and part of the project. A survey from Net Impact found that working in the place where they can contribute an impact was important to their choice and several of them indicate to take a pay cut to work for a corporation practicing CSR. (Fenn 2013)
Fenn (2013) explains that CSR is about managing the relationships between employees, customers, supplier and stakeholder to produce positive impact on society, whilst gaining profits. AT&T and its foundation, for instance, connected CSR with specific business functions by establishing a family care fund that managed committee to support employees and their communities. The result is, not only improved the availability and quality of day care facilities, but it also widely used to solve union management disagreements. (Preuss, 2011, p. 24) Other example of the successful CSR implementation in a company is Walt Disney by creating the ‘Green standard’ to engage and motivate the staff in reducing their environmental impact when working, having meetings, travelling and eating lunch. With more than 60,000 employees they succeed to achieve financial benefits from reducing 10% the corporation’s electricity use. (Fenn, 2013)
The next success story is the well-known natural fragrance manufacture The Body Shop. A trend by this anti-chemical perfume widely accepted around the world. The founder, Anita Roddick, believes in the importance of environmental protection, animal rights, community trade and human rights, although The Body Shop Foundation started a struggle in finance. Thus, today The Body Shop reaches markets in the USA and Japan, create a loyal customer, and gain annual profits of over £40m. Having a similar idea, Haagen-Dazs and their natural ice creams created a website, started a social media campaign and donated a portion of proceedings to research about honeybees and its benefits in the chain food.
In fact, the advertise helps society, company’s CSR goals, showing humanity to consumers which likely to pay a premium price for charity reason. (Fenn, 2013) On the other hand, In the term of education, The Shell Foundation was involved to provide Early Learning Centre in the Flower Valley, South Africa which helping to educate both children and adults new skills. Considering the similar idea, Econet Wireless, a Zimbabwean multi-national company, offers education scholarships for any level students, supports football club around Africa and participates in HIV/AIDS education programmes. (Madzimure, 2013)
In conclusion, although the consequence of implementing CSR experiencing expenditure increases, CSR contributes significant benefits not only for a company but also for stakeholder, society and environment. Some organizations both local and international level allocate funds for long investment for social responsibility, aiming to the better reputation and revenue. Primary, CSR helps the legal responsibility through convincing the society in other to obtain government trust. By satisfying customer demands, a firm also can create a loyal buyer and it is not impossible to improving profits. Secondly, CSR economically benefits both to the environment and the organisation.
The firm through differentiation has an opportunity to spread the market while sustaining the environmental sources. Through CSR, corporate could improve employee’s satisfaction, because well performance employees lead to optimal organisation productivity. World class corporations such as Walt Disney, The Body Shop, and Haagen-Dazs have practised CSR and experienced a successful achievement. Moreover, African company such as The Shell Foundation and Econet Wireless involve in educational support for children.
Therefore, facing engaged responsibility from various sectors, a company not only can maintain its sustainability but also, gain more advantages by implementing CSR. The old fashioned corporation which only concentrating to gain profit has not longer been primary evaluation to the decision makers because in the future social expectation will drive organisation in any part of the world contributing more important role in environment through CSR. References:
Fenn, R 2013, ‘Benefits of Corporate Social Responsibility’, Sustainable Business Toolkit, 14 May, viewed 22 May 2013,
Galbreath, J 2009, ‘Building corporate social responsibility into strategy’, European Business Review, vol. 21, no. 2, pp. 109-127.
Ingenhoff, D & Sommer, K 2011, ‘Corporate Social Responsibility Communication: A Multi-method Approach on Stakeholder Expectations and Managers’ Intentions’, Journal of Corporate Citizenship, Iss. 42, pp. 73-90.
Madzimure, J 2013, ‘Let’s embrace corporate social responsibility’, Nehanda Radio, 19 May, viewed 22 May 2013,
Preuss, L 2011, ’Innovative CSR: A Frame Work for Anchoring Corporate Social Responsibility in the Innovation Literature’, Journal of Corporate Citizenship, Iss. 42, pp. 17-33.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 21 April 2016
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