Introduction
Corporate social responsibility (CSR) is becoming a major business undertaking aimed at increasing the competitiveness and marketability of a business. It is the criteria through which an organization accesses its social, economic and environmental development. Through corporate social responsibility, organizations are able to forge cohesion between markets, labor and local communities.
Further, CSR increases investments directed towards community social welfare, enhancing trust and meeting the increased global expectations placed on business ventures (Gray et al., 1987). It is represented by the assistance accorded to the society through company hub business actions, social ventures, charity programmes and its commitment to public procedure.
For example, the Shell Foundation input in the Flower Valley of South Africa has seen the company develop early learning centers for children and adults to lower the level of illiteracy. Other companies are involved in the establishment of facilities to create awareness on environmental issues.
CSR enhances Business competitiveness
Incorporating corporate social responsibility program in an organization enhances its competitiveness. It has been determined that businesses output on the fiscal, social and environmental aspects straightforwardly affect its affiliation with stakeholders, workforce, consumers, company associates, governments and local communities.
Research conducted on CSR Programs have found out that 70% of customer buying decisions, stakeholders and staff decisions are influenced by the level of social contribution that the company makes to the society (Hohnen, 2007).
Corporate social responsibility produces reimbursement such as brand-strength, higher employee spirits and greater shareholder assurance which ensures trust in the company business activities that enhances its competitiveness in the market (The Economist, 2005). Many companies emphasize on good moral ethics as a corporate social responsibility measure citing that this finally leads to tangible competitiveness over other companies with other forms of CSR program but poor morals in their business deals.
Other companies use the golden rule of reciprocating the good advanced to them by their consumers that ensures attracting and retaining customers (The Economist, 2005). Although the benefits of corporate social responsibility are hard to quantify, it is agreed that companies without CSR programmes incur high costs of production. For example, companies involved in polluting production activities incur a lot of losses when neutralizing the effects of production activities.
CSR enhances business growth and stability
Effective CSR programmes can enhance the development of a business. Due to the global outlook of many businesses today, a strong base is required from which a business can grow. Sustainable development in businesses requires the implementation of strong corporate social responsibility program that will ensure stability in both production and sales in the market. Firms that do not incorporate CSR in their decision making will likely face different problems that can take them out of business.
Furthermore, firms will be faced by prospects of legal suits by employees, communities and government (Hohnen, 2007). The rising risk involved in business activities can easily be managed by putting into consideration those involved in the business activities ranging from the stakeholders to consumers. Through greater future assessing and investors’ analysis of corporate social responsibility programmes, the protection of supply, production and market solidity can be enhanced.
CSR increases business reputation, trust and sustainability
Consumers tend to align themselves with reputable firms. CSR is one of the ways that a company can build its reputation. Entrenching trust, good morals, reliability, quality and consistency in a company ensures steady consumer flow. The growth in reputation of a company enables a company to recruit, develop and retain high quality staff that are not only proud of their employer but are devoted to enhance the development of the company.
CSR enables a company to draw information from many sources that are loyal to it. Aligning itself with one sector of CSR application, the firm can innovate and create a product suited for that given market. For example, CSR directed towards the environment can enable a company to increase its processes and become a leading supplier in environmental products.
CSR also improves the company chances of creating effective and long lasting supply chain with companies that share the same ideologies therefore reducing risks and costs involved in production.
CSR programmes through its connections to various people and information channels has the potential to adapt to changing trends in the business world through information relayed to it by its CSR intervention programmes. CSR also increases a company’s market size through tapping into communities that allow the company access to their areas (Hohnen, 2007).
CSR application by business companies
Many firms are increasingly incorporating corporate social responsibility programmes into their decision making. There is a growing pressure from nations, international organizations and regulations that are forcing companies to adopt the corporate social responsibility programmes. For example, in South Africa all companies on Johannesburg Stock Exchange by June 2010 are obliged to submit an integrated account that shows economic, social and environmental developments beside the financial records.
The Google Company has been extensively involved in programmes that are supposed to better the lives of people. Since incorporation of CSR, Google profits ensuing mainly from advertisements have developed in each quarter since 1993. Google websites offer 34.5% of all searches carried out through the internet (ComScore, 2005).
In 2005, Google donated US $1billion to its charitable division dubbed as Google.org to invest in social projects throughout the world (Ethical Corporation magazine, 2005). In addition, Google’s motto that prohibits doing any evil against any person acts as its selling point. From its loyal and dedicated staff, Google has also managed to provide the world with innovative choices on the field of communication and networking.
References
ComScore Inc. (2005). Measuring the Digital World. Web.
Ethical Corporation magazine (2005). Business Briefs. Web.
Gray, R. H., Owen, D. L. & Maunders, K. T. (1987). Corporate Social Reporting: Accounting and accountability. New Jersey, NJ: Prentice Hall.
Hohnen, P. (2007). Corporate social responsibility: An Implementation Guide for Business. Manitoba, Canada. International Institute for Sustainable Development.
The Economist (2005). The Importance of Corporate Responsibility. Web.