Understanding the Importance of Corporate Social Responsibility (CSR) in Business

In this document we will discuss about Understanding the Importance of Corporate Social Responsibility (CSR) in Business and below are the summary points of this document:- The main theme of the articles is corporate social responsibility (CSR) in business and its impact. CSR has distinct characteristics, such as considering the public and the environment in business operations. CSR is significant for business growth and success, contributing to customer trust and increased revenue.  

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Corporate Social Responsibility
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Issue/Theme
 What is the issue/theme?
The main theme in the three articles is about corporate social responsibility (CSR) in business.
How it is used, how the businesses benefit from it and how it basically affects the businesses
either positively or negatively. From the previous researches it is evident that CSR have been
playing a great part in the growth of many businesses (Schwartz, 2011).
 Describe/define characteristics
As explained in the above three articles corporate social responsibility has some distinguished
characteristic (Mallin, 2016). Some of the characteristics as highlighted in the articles are
discussed below
Public
First of all a corporate have direct duties to make sure its daily operations does not affect the
society in which the company is operating from. Society and the public in general play a very
important role for the company growth and its success. For instance, the public offers skilled and
semi-skilled staff to the company. Also the society provides ready market for the produced goods
and as a result the company must mind the surrounding society at any given time (Mallin, 2016).
Environment
Environment is a very important factor to the business. Business can create a threat or
opportunity depending on how the business manages its environment. However, one must
understand that business environment is divided into two parts which is micro and macro
environment and for a business to survive it must take care of both environments at all time.
 Why is this issue/theme important or significant today?

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CSR is an important factor which determines the growth and success of a business. Researches
deduce that well managed CSR contributes to around 40 percent of business success. A well
managed CSR increases the number of customers which visit a business thus increasing the
revenue generated from the business in the long run (Nathan & Pierce, 2016).
 What is the support from other ACC unit materials for this issue?
As we have seen above, CSR is not only vital just for the society/public, the world and the
environment, but also it is important for the company/business reputation. Additionally,
commendable CSR strategies improve customer trust, brand sentiment and the company
recommendations. The three leads to an increase in revenue generated by the small businesses
and corporations alike. Nevertheless CSR benefits extend far beyond sales.
 Other examples from sources?
A good example is when Netflix company workers are given some off days per years with an
option to work for pay. One must understand that the said leave is also paid by the company. By
doing so the company practises CSR which motivates the employees to work harder.
Agreements
 How do the articles agree?
The three articles agree that CSR is of great importance to some extent to the business. Also, the
three goes to agree that every business in the current century must practice CSR to some extent.
For instance, in the article titled “6 CSR trends to watch in 2017” the writer states that, in the
past decade there have been witnessed a stunning transition as CSR evolved from a nice to have
silo to a fundamental strategic priority for businesses large and small. The some sentiments are
encored by other articles.
 Explain key similarities

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The key similarities in the three articles are the fact that the writers seems to agree on the fact
that CSR is of great importance for many business which would like to compete in the current
market.
 How does the issue compare to other ACC unit materials?
CSR affects the company the same way as the ACC if not managed properly.
 Reasons why this issue/theme is important and/or effective in contemporary accounting?
The issue is important and effective in contemporary accounting because CSR leads to an
increase in revenue generated by the business. However, contemporary accounting deals with
accounting for the money generated by the business in the long run which means an increase in
revenue from CSR will be accounted for by contemporary accounting in the business (Carolina
Machado, 2014).
Disagreements
 How do the articles disagree?
Although the articles agree on many instances there are some instances which they disagree. For
example one article argues that a company may spend a lot of money on CSR which might not
be recovered later. The article argues that there is no need for carrying out CSR and the business
is supposed to be left to run itself in the market. The article argues that customers would still
purchase the products even without the company spending anything on CSR. Other articles seem
not to support that idea (Ferrell, 2013).
 Explain the disagreement(s)
The argument about companies investing on CSR are wasting their resources does not hold any
water. For instance, in many cases, people who seek employment are happy to apply for
positions that mostly offer bare minimum compensation. On the other hand, workers ought to

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have openhandedly reimbursed for the time and work they donate to their company.
Consequently, the happier an employees are, the lower the work turnover is likely to be. One
must understand turnover is very expensive.
 Reasons why there is disagreement on this issue/theme in contemporary accounting?
I think the disagreement is caused by the money spent on CSR. Some managers feel the money is
too much and company will not be able to take the money back to the company. For instance,
Netflix spend millions of money of CSR per year. Some managers might feel the company in the
long run will end up losing the money in the long run (Banerjee, 2011).
Coverage Disparities
 Where is there coverage disparity in the articles?
The coverage disparity in the articles is the fact all the articles agree about the CSR on business.
Even though the business would not start enjoying the fruits of CSR immediately it is essential in
the business both large and small. Other departments such as marketing, finance, accounting,
human resources and management sciences depend on CSR to get funds to finance their
operations. However, finance and accounting departments are mandated with dividing and
accounting the money in the company. Among all departments it should be understood that it’s
only marketing department which are audited at the end financial year.
 Explain the coverage disparity
Some managers believes the company will not be able to retain the money used in CSR while
other believe CSR will benefit the company in the long run and the money generated will be
used to finance other revenue generating activities in the company. Those who believe in CSR
agree that the money the money used in CSR the higher returns to the company. CSR helps some

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customers to realise the existence of a company thus making more customers to visit the
company.
 How does the issue compare to other ACC unit materials?
The issue is similar to other ACC unit materials.
Significance
 What is the significance of this issue?
Social responsibility and ethical practises are essential in business growth and success. The
research which was carried in 2015 by cone communication and ubiquity global CSR study
suggested that 91 percent of global consumers expect every business to operate responsibly and
to address some of the social and environmental issues. The same research continued to argue
that 84 percent of customers seek out responsible products wherever possible. Some of the basic
importance of CSR in the business as outlined by the articles include improved public image,
increased brand awareness as well as recognition, cost saving, an added advantage over
competitors, increased customer engagement, greater employee engagement and more benefits
for employees.
 Why is it important in contemporary accounting?
As discussed above, the issue is important and effective in contemporary accounting because
CSR leads to an increase in revenue generated by the business. However, contemporary
accounting deals with accounting for the money generated by the business in the long run which
means an increase in revenue from CSR will be accounted for by contemporary accounting in the
business (Banerjee, 2017).
 Evaluate worth of articles to decision-makers

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The three articles are of greater importance to a person who would like to make a decision on
CSR in a business. The importance is useful to both small and large business in the long run. The
decision maker must realize that the main theme in the three articles is about corporate social
responsibility (CSR) in business. How it is used, how the businesses benefit from it and how it
basically affects the businesses either positively or negatively. From the previous researches it is
evident that CSR have been playing a great part in the growth of many businesses.
 Does change need to happen?
The change need to happen in the company in order to attract more customers. The basic reason
why the change is required to happen is because the three articles agree that CSR is of great
importance to some extent to the business. Also, the three goes to agree that every business in the
current century must practice CSR to some extent. For instance, in the article titled “6 CSR
trends to watch in 2017” the writer states that, in the past decade there have been witnessed a
stunning transition as CSR evolved from a nice to have silo to a fundamental strategic priority
for businesses large and small. The some sentiments are encored by other articles (Ferrell, 2013).
Conclusion
The three articles seem to collectively agree that CSR is crucial in every business setting. The
business growth depends among other factors how good the CSR is carried out. As we have seen
above, CSR also encourages employees who operate in a certain company whose morale is later
boosted thus output in increased. An increase in output means an increase in revenue generated
from the business.

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References
Banerjee, S. B., 2011. Corporate social responsibility : the good, the bad and the ugly. 1st ed.
Cheltenham: E. Elgar.
Banerjee, S. B. N., 2017. Issues for Debate in Corporate Social Responsibility. 4th ed. UK:
Edward Elgar.
Carolina Machado, . P. D., 2014. Management for sustainable development. 3rd ed. Aalborg:
River Publishers.
Ferrell, . F. . M. T., 2013. Business and society : a strategic approach to corporate citizenship.
2nd ed. Boston, Mass.: Houghton Mifflin.
Güler Aras, . C., 2016. A handbook of corporate governance and social responsibility. 2nd ed.
London ; New York: Routledge.
Mallin, C. A., 2016. Corporate social responsiblity : a case study approach. 4th ed. Cheltenham:
Elgar.
McPherson, S., 2017. FORBES. [Online]
Available at: https://www.forbes.com/sites/susanmcpherson/2017/01/19/6-csr-trends-to-watch-
in-2017/#7fefce8b1cc4
[Accessed 29 January 2019].
Nathan, S. & Pierce, C., 2016. CSR in Islamic Financial Institutions in the Middle East. 5th ed.
Cheltenham: Elgar.

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Nickless, R., 2016. FINANCIAL REVIEW. [Online]
Available at: https://www.afr.com/leadership/management/corporate-social-responsibility-has-
an-image-problem-but-dont-kill-it-20160229-gn6cma
[Accessed 29 JANUARY 2019].
Schwartz, M. S., 2011. Corporate social responsibility : an ethical approach. 3rd ed.
Peterborough, Ont.: Broadview Press.
Vani Tanggamani, S. A. N. A. B. R. D. O., 2017. INCORPORATING ROLE OF
STAKEHOLDERS INTO CORPORATE CSR STRATEGY FOR SUSTAINABLE GROWTH: AN
EXPLORATORY STUDY. [Online]
Available at:
https://www.shs-conferences.org/articles/shsconf/pdf/2017/04/shsconf_icga2017_00040.pdf
[Accessed 29 January 2019].