Corporate Social Responsibility and its Impact on Company Performance

This essay discusses the benefits of Corporate Social Responsibility (CSR) to a company's performance and explores the stance companies should take towards CSR initiatives. It provides examples from the fast moving consumer goods industry to illustrate the effectiveness of CSR. The essay emphasizes the importance of CSR in improving corporate reputation, financial performance, and employee retention.

MANAGEMENT

Corporate Social Responsibility (CSR) is beneficial to a company’s performance? What
stance should companies therefore take towards CSR initiatives? Illustrate your answer with
reference to companies within a particular industry.
Introduction
This essay brings out a discussion on deep understanding of CSR. Corporate social
responsibility is a term, which is used to describe the company`s endeavours in order to
improve the society. The purpose of this essay is to examine and analyse several activities
and practises, which a company executes in order to carry out its social responsibility. The
essay also reveals every related social responsibility in association with fast moving
consumer goods (Tesco PLC, 2019). Moreover, business executives have been continuously
facing the complex strategic allocation of resources that cannot only be achieved by
accomplishing the financial results. It is extremely important to evaluate the expectations of
the society and the stakeholder. In order to satisfy the stakeholders, the company has to
execute the social and environmental responsibility that has been impact on corporate
strategy. An obligation or assurance to execute social responsibility contributes to sustainable
economic development by working with the employees, local communities and families
(Goergen, & Renneboog, 2016).
Analysis
Corporate Social Responsibility (CSR) is a company’s step to measure and take responsibility
of the company’s effectiveness on environment and society’s activities, which may consider
donating money to non-profit organisations to implement the environment friendly policies at
the workplace. The potential benefits of CSR to the companies includes positive business
reputation and better brand recognition, better financial performance, easier access to capital,
operational saving, and organisational growth, which will lead to customer loyalty and
increased sales (Goergen, & Renneboog, 2016). In order to analyse the four benefits of CSR,

the very first factor deals with world player, company`s reputation, improved financial
performance, and employee retention. If any company in the world has all the above
characteristics and comply with CSR than it would make it a true excellent player that results
in improving corporate reputation that makes employee retention possible to improve the
financial performance (Yusuf, & bin Bahari, 2015). Corporate`s investment in social
activities will build reputation which will lead to competitive advantage. These corporates
favour the suppliers who are responsible for policies and it reflects how their customers see
them. Through the reduction of water, emissions, and use of resource, the company can help
to save the environment. In order to become responsible, a sustainable company makes it
easier to recruit new and fresh talent so that it will help in maintaining greater accountability
and customer loyalty (Yusuf, & bin Bahari, 2015). Here are some important illustrations from
the contemporary world that signifies hoe efficiently some companies have executed the CSR
policy. For example- P&G does not prefer child as their labour in any of their global
operations or facilities. They also try to uphold those businesses, suppliers, contractors who
follow the same standards. Moreover, they do not operate with those businesses, which
employ child, prison, bonded labour or any coercion. Furthermore, activities, which P&G
commits to serve, are the safe and healthy production and operation around the world. The
main aim is to protect the lives and health of employees, community, and wildlife
surrounding its operations. Safe operations are long-standing part of company`s culture
reflecting its ability to serve its customers, suppliers (which are the part of the society from
which they belong too).
While analysing the sustainable reports of an FMCG company, PepsiCo executes its CSR
policies its sustainability policies successfully such as quality and food safety programs,
healthcare reform, sustainable packaging policy, and responsible marketing. Under the food
safety and quality, it is seen that PepsiCo is dedicated in producing the highest quality, safe

and the best tasting beverage in each part of the world (Ali, 2016). Maintaining and
developing healthy and safe food safety program that ensures safety for each packet. PepsiCo
has detailed the internal programs for food safety. Further, the company undertakes to teach
the children about the sensible eating habits at early age that is a critical part of the
upbringing. As a crucial advertiser, the company needs to help the parents for this task (Ali,
2016). This approach will lead to join a set of food and Beverage Corporation while agreeing
to change the younger generation by advertising on TV and other media such as internet and
magazine. PepsiCo considers health and wellbeing of the associates, customers, consumers,
and partners. The company offers huge range of benefits, which encourage wellness, and
promotes healthy lives (PepsiCo, 2019). This gives associates and their related families with
the tools to collect and analyse them to make education related healthcare decisions. Other
more FMCG companies such as Boston Beer Company inspired to form a philanthropic
program, which would offer support to several small businesses and the budding
entrepreneurs especially in America (THE BOSTON BEER COMPANY, 2019). The
company offers nuts business mentoring and small loans to small businesses owners in
regards to food, brewing, and hospitality. The company has also offered business
experienceship to receive the enrichment and educational experiences. In order to protect the
environment and continuously looking for several ways to minimise the waste, maximise the
effective use of natural resources, and increase the recycling. On the other hand, some
companies are unnecessarily trapped in wrong fame such as Coca-Cola where it kept proving
the wrong allegations against the wrong image created. The company has focused on
establishing an image of integrity and retaining its consumer trust. The damage triggers faced
by the company`s operations have been solved when the company attempted to justify its
point and position in the CSR reports of 2006 (Goergen, & Renneboog, 2016). Even though
the company has not lead to any breach of any Indian law but the claim says that Coca-Cola

beverages contains a level of pesticides. Other negative scenes illustrate Walmart, who has
been often sued in US and it has a current suit of 8,000 lawsuits (Lindawati, & Puspita,
2015). This type of conflicts has adverse impact on the reputation of Walmart. As a result, the
consumers have stopped shopping due to negative publicity. Other ethical issues and scandals
consider Volkswagen scandal and FIFA scandal that has affected the decisions of the
customers and the stakeholders. Apart from these scandals, almost every FMCG company
undertake certain common CSR initiatives such as it strives to maintain the green
environment, women empowerment, hygiene education, eradication of hunger, combating
diseases, ensuring environment sustainability, and promotion of education. Most importantly,
CSR is not only about how a company spends its money, but also it is about how it makes
that money in the first place (Singh, 2018). Companies generally engaged in high affecting
processes, which severely affect the environment. The company requires extraordinary efforts
in order to reduce and repair the damage occurred, and require greater contributions to benefit
society.
Conclusion
From the above discussion and analysis, it can be concluded that most FMCG companies
comply with CSR so that they can get interest of their stakeholders. A comprehensible CSR
strategy states that a policy based on integrity, long-term approach, and sound values, which
offers lucid business benefits, which the company gets after following the CSR policy with
full trust and loyalty. Whereas, on the other hand, the company can suffer from huge failure if
it do not perform basic necessary CSR activities. The above discussion based on the analysis
indicates that some companies, which do not execute their CSR activities, finally has led to in
the list of ethical scandal. In order to improve the CSR activities, the company will have to
use its resources to execute CSR so that it can contribute in improvement in the society.

References
Tesco PLC, (2019). Tesco and multi-stakeholder initiatives for responsible sourcing.
Retrieved from: https://www.tescoplc.com/reports-and-policies/multi-stakeholder-initiatives/
THE BOSTON BEER COMPANY, (2019). Brewing the American Dream. Retrieved from:
http://www.bostonbeer.com/index.php/our-company/corporate-responsibility
PepsiCo, (2019). PepsiCo-Corporate Social Responsibility. Retrieved from:
http://www.csrworld.net/pepsico%E2%80%93corporate-social-responsibility.asp
Singh, V. (2018). ROLE OF FMCG COMPANIES TOWARDS CORPORATE SOCIAL
RESPONSIBILITY (INDIAN INSIGHT). Retrieved from:
http://iaeme.com/MasterAdmin/UploadFolder/IJMHRM_07_01_002/IJMHRM_07_01_002.p
df
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