Corporate Social Responsibility and Business Growth

This assignment delves into the connection between Corporate Social Responsibility (CSR) and business growth. It requires students to examine various academic papers and theories that explore this relationship. The analysis should encompass the value-enhancing capabilities of CSR, its impact on firm financial performance, and the role of competitive advantage, reputation, and customer satisfaction in mediating this effect. Additionally, the assignment touches upon the influence of CSR on innovation and business growth drivers.

Running head:CRITICAL ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
CRITICAL ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
Name of the Student
Name of the University
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1CRITICAL ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
Table of Contents
Introduction:....................................................................................................................................2
Critical Analysis of CSR:................................................................................................................2
Argumentative Discussion:..............................................................................................................3
Emergence of CSR Concept:...........................................................................................................6
Acceptance and Practice of CSR Concept:......................................................................................7
Conclusion:....................................................................................................................................11
Reference:......................................................................................................................................13

2CRITICAL ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
Introduction:
Strategic management refers to the management of the organization as well as its
activities with the help of some effective strategies. In other words, the strategic management is
the process of strategically handling the organizational business activities for achieving the
desired business objectives. Every organization has its own strategies for running its business in
the competitive market of the its own. Along with this, the sustainability of the organization is
also determined by the proper implementation of the firm’s strategies. The areas involved in the
strategic management are the analysis of the internal and external strengths and weakness of
the firm, formulation of the action plan, execution of the action plan and the evaluation of the
action plan (Hitt, Ireland and Hoskisson 2012). Therefore, the strategic management of the firm
is considered to be the most important part of the business as it ensures the successful business
activities of the firm in the market. However, there are different concepts of the strategic
management, which are found to be implemented by various organization in all over the world.
The most popular concepts of strategic management are core competencies, generic strategies,
mergers and acquisitions, alliances, CSR, blue ocean strategy and many others (Kumar and
Reinartz 2012). However, the following discourses discusses one of the concepts which is
Corporate Social Responsibility (CSR).
Critical Analysis of CSR:
Corporate Social Responsibility is one of the popular and effective concepts of the
strategic management. The Corporate Social Responsibility (CSR) is also known as the corporate
citizenship, sustainability management and in few others name. The CSR is referred to the
initiatives taken by the firm for the social and environmental betterment. It is found that any

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corporation or the business organization operates its business within the social and
environmental context. On the other hand, to certain extent the environmental and social aspect
are influenced by the corporate activities of the organization. Therefore, it comes under the
responsibilities of the firm to perform its duty on the part of the social and environmental context
n (Sharma and Kiran 2013).On a different note, it must be noted that the CSR initiatives
indicates the firm’s activities on the social context for the wellbeing of the society.
From the 1960’s the concept of the corporate social responsibilities started attracting
attention of the business firm for providing benefits to the society by the organizational business
activities (Guthey and Morsing 2014). The CSR is considered to be one of the strategic
management concepts because the CSR is one of the strategies that helps the organization to
maintain its sustainability in the competitive market for a longer time. Before the
conceptualization of the CSR, it is found that that the organizations were impacting on the
environment as well as on the society by the business and corporate activities of them (Prasad
and Holzinger, 2013). After the realization of the same by the firms, the acceptance and the
implementation of the CSR was the response to the growing concerns on the ethical issues in the
business regarding the activities of the firm and its impact on the society and environment. On
the other hand, the corporate social responsibility is found to be involved in the economical,
legal and philanthropic activities by the firm in terms of doing betterment to the society and the
environment (Kitzmueller and Shimshack 2012).
Argumentative Discussion:
However, the arguments on the subject of CSR has been running over the years. CSR is
considered to be one of the business concern for the wellbeing of the society. The basic purpose

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of the CSR is to maintain the sustainability of the firm in the competitive market. The arguments
on the subject is indicated towards the necessity and importance of the CSR in the strategic
management of the organizations. Many scholars are in favor of the CSR and some are not. the
arguments summarize the importance of the CSR activities in terms of the protection of the
interest of key stakeholders, long run survival, self-enlightenment, avoidance of government
regulations, resources and professionalisms.
Some of the scholars and researchers state that the CSR activities of the company
protects the interest of the key stakeholders in the business of the firm (Prasad and Holzinger
2013). The organization is responsible for protecting the rights and social values of the key
stakeholders of the firm which is one of the aspect of the CSR activities.To run a successful
business in the competitive market, the firm needs to discharge responsibilities towards its
stakeholders, especially the employees and consumers. Consumers being the prime factor of the
business that determines the profit if the organization in the target market (Guthey and Morsing
2014). Therefore, the business organization needs to ensure the level of satisfaction of the
consumers and CSR initiatives is one of the strategic management for serving the same.
Long run survival is another factor that indicates the importance of the CSR activities by
the organizations. Long run survival is another name of the sustainability which is ensures by the
CSR performance of the firm along with the business activities in the market (Lin-Hi and Müller
2013).
Not maintaining the social norms is capable of attracting the government to impose
regulation on the organization’s business activities. If the business activities of the organization

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affect the society and environment the government can take legal action against the firms.
Therefore, the CSR activities is important for avoiding the legal restrictions.
The organizations from its business activities possess wide range of resources that can be
used in the CSR activities of the organization which often includes minor and aboriginal
communities. Therefore, the utilization of the resource indicates the importance of CSR
initiatives.
Professionalizationof the organization addresses the social orientation of the business.
The corporate activities of the business entities are marking the increase of the
professionalization of the firms which further includes the maintenance of the code of ethics and
legal aspects by the same. CSR activities being a part of the code of ethics marks the importance
of its practice.
However, there are many scholars who argues that the CSR activities are not important
for maintaining thesustainability of the firm in the competitive market. The arguments over the
topic states that business entities being the profit organization must not practice CSR activities in
order to ensure its business profit. In addition, the arguments marks that the for addressing the
social and environmental wellbeing, there are government and nonprofit organizations. The
scholars against the CSR activities claims that CSR is the waste of time and resources by the
organizations. The CSR is limited under the grounds that are business as an economic activity,
quantification of social benefits, cost benefit analysis, transfer of social costs and sub optimal
utilization of resources.
As stated by Kitzmueller and Shimshack (2012), business being an economic entity must
not get into social an environmental activity which will weaken the business activities of the firm

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in the market. Whereas another scholar points out that social responsibilities is one of the
complicated and difficult tasks as it comprises various responsible activities to be done.
Therefore, the CSR activities can make the firm less prioritize its business activities due to the
excessive quantification of social benefits.
The CSR practice of the firm is not a cost benefit act as sometimes the initial budget
exceeds the level of benefits. On the other hand, using the cost to the social welfare can result
into firm’s low wages and low profits.
Therefore, it is evident from the above argumentative discussion on the CSR practice of
the firm that the advantages of CSR are more than the disadvantages. However, the drawbacks of
CSR activities of the firm cannot be ignored, but the same can be overcome through proper and
effective strategic implementation of the CSR initiatives. The debate over the CSR practice of
the organizations raises numerous questions for the organization itself. Some of the scholars raise
question about the operational defection of CSR (Malik 2015) whereas some argues with the
uniformity in business policies are lacked by the CSR activities.
Emergence of CSR Concept:
The concept of the CSR activities has been argued by many scholars for its acceptance in
the corporate sectors. The CSR took years to get conceptualized by the business organization. It
must be noted that most of the business organization in the 21stcentury. Most of the business
entities are practicing the CSR activities for enhancing the public image. As opined by Kolk and
Lenfant (2013), all the multinational companies must take active part in the CSR practices in
order to ensure the sustainability of them in the international market. At the same time, Izzo and

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Magnanelli (2012) argued that the CSR initiatives is capable of disrupting the sustainability of
the firm as it is the waste of money.
However, though the conceptualization and acceptance of the CSR has taken several
years, but it has been accepted most of the international and national organizations. In fact,
almost every popular organization publishes its yearly CSR reportto sustain and make people
aware about their social environmental activities. The most effective adaptation of CSR concept
is its emergence and acceptance by the organizations as the sustainability development strategies.
Consequently, the CSR has become one of the important and necessary part of the strategic
management for any business entities.
Acceptance and Practice of CSR Concept:
The above discussion shows the emergence of the CSR concept as one of the aspect of
the strategic management. Among many concepts of the strategic management the CSR has
gained the most popularity. The importance of the CSR activities is incased towards the
sustainability of the firm in the market (Przychodzen and Przychodzen 2013). Specifically, for
any international organization, the CSR has been a mandatory practice. It must be mentioned in
this regard that the any market in today’s era is highly competitive. Hence, the organizations
existing in the market must consider the strategic management in terms of gaining the
competitive advantages in the targeted market. For the organizations operating its business in the
global context, the CSR has become an inseparable part of the organization.
It must not be forgotten that despite having the range of advantages in adapting the CSR
activities, there are number of organizations that do not participate in the CSR practices. For
ensuring the proper management of business activities, these organizations follow other strategic

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management such as the generic strategies, core competencies, alliance, mergers and acquisition,
blue ocean strategy and others. Some of these strategies are equally effective as the CSR and
some are not.
The generic strategies are specifically designed for ensuring the competitive advantages
of the target market (Tanwar 2013). Any firm uses the generic strategies for the achievement of
the cost leadership, focus and differentiation which further leads the organization towards the
success in the competitive market (Kinyuira 2014). The generic strategies are used by many
firms, specially the new ones. However, though the generic strategies are found to be one of the
best aspect of the strategic management, it has not gained the popularity as much as CSR.
However, the comparison between the two is not sensible as because it is possible for any firm to
use both the aspect of the strategic management. It must be remembered that the generic
strategies and CSR despite being the aspect of strategic management, performs different
functions. However, all the concepts of the strategic management address the profitability of the
firm, but the ways of achieving the same are different (Mahbuba and Farzana 2013).
Blue ocean strategy is another concept of the strategic management that creates a brand
new market which is excluding of competitor companies. This concept of the strategic
management refers to the idea of uncompetitive innovative market which is uncontested (Mebert
and Lowe 2017). This strategy is used by some of the organizations in order to create new
consumer values (Štverková,Červinka and Humlová 2012). However, it is found by many of the
researchers that this concept of strategic management is not as effective as the CSR. At the same
time, the concept often does not provide intended results and this concept is new to the business
market. on the other hand, the CSR has gained popularity for its effectiveness.

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Mergers and acquisition is another effective strategic management concept for securing
the profitability of the firm out of the business activities (Schmidt 2015). Mergers and
acquisition refers to the consolidation of companies, while merger denotes combination of two or
more companies into one whereas the acquisition entails the takeover of the one company by
another. It is found from the market research this concept of strategic management is used
basically in the financial industry of business. The concept of mergers and acquisition majorly
and accepted and followed by most of the organizations in financial sectors (Bena and Li 2014).
The effectiveness of the organization is based on the acquisition of the potential customers.
However, the CSR concept of the strategic management cannot be ignored and is equally
practiced in all industry including the financial one to a great extent.
Considering the fact that of sustainability by CSR practices, the same is given high
priority and importance by most of the business entities in today’s era. Cai, Jo and Pan(2012),
found from his researches that the wide number of firms in today’s era considers the CSR is
important in terms of performing the social responsibilities. There are many organizations in the
international context that are taking the CSR seriously for making profit out of the business
activities. As mentioned by (Minoja2012), the CSR practices by any firm not only ensures the
long run existence of the firm in the industry, but also reduce the risk of losing its ground in the
market. the new entry in the market becomes a threat to the existing firm which can be reduced
by the CSR initiatives.
On the other hand, the impact of the CSR practices plays an important role on the part of
stakeholders. the stakeholders of the organization are one of the major part of CSR activities.
The stakeholders not only are benefitted through the CSR practices of the organization but also
they play a vital role in performing the CSR initiatives. Employee welfare is one of the aspects of

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firm’s CSR practices (Minoja 2012). In addition, there are many communities who are helped
and supported by the CSR performance of any organizations. The wellbeing astakeholder of the
firm to certain extent is determined by the CSR activities of the firm. Therefore, it is evident that
CSR practice of the firm determines the relationship of the firm with the stakeholders.
On the other hand, the environmental perspective is another aspect of CSR activities as
emphasized by many organizations. There are numerous organizations which stresses on the
environmental maintenance as the part of CSR activities. The environmental activities such as
controlling the carbon emission, green preservation, greenhouse gas management and many
others (Malik 2015). In today’s era, the environmental preservation is one of the biggest issues
that must be considered by every organization. Industrial activities are considered to be one of
the primary reason for the environmental degradation. Therefore, the socially aware organization
is found to be taking part in preserving the environment and reducing the damage in the same.
For serving the noble purpose, the organizations consider the CSR practices to the most
effective.
It must be noted that all the organization face numerous business challengesin terms of
operating its business in the competitive market. The firms perform their CSR activities for
avoiding and resolving the business challenges. The business challenges like legal and ethical
business practice, achievement of competitive advantages, sustainable business operations can
be overcome by the CSR practice (Rexhepi, Kurtishi and Bexheti 2013). The industrial business
operation often tends to break the legal and social rules of business. The practice of CSR is
capable of making the firm avoid these legal obligations. In the vast market of competition, any
company can enhance its public image by its CSR performance which will further increase level
competitive advantages achievements. Furthermore, as stated above the CSR exercise of the firm

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not only ensures the competitive advantages of the firms, but also strengthen the suitability the
same in completive market (Saeidiet al. 2015). In fact, the sustainable business operation is one
of the reason for firm’s CSR practices. Therefore, it is evident that the business entities are
dependent on CSR practice, however not mandatorily, for reducing the risks that comes from the
various business challenges.
In regard to the business challenges, it must be mentioned that there are diversechallenges
that are faced by the all the business entities in the competitive market in performing the CSR
activities. The challenges come from both from within and outside the organizations. The
internal challenges may come from the stakeholders such as the investors and employees. The
inventors of the organization often create obligation to prevent the firm from practicing the CSR
activities (Elvinget al. 2015). On the other hand, the employees may be reluctant to perform job
in the CSR activities apart from their organizational job responsibilities. At the same time, the
external challenges may come from the legal and social perspectives in many forms. However,
these challenges can be overcome by the proper management.
Conclusion:
Therefore, this can be concluded from the above discourse that strategic management is
one of the vital part of business for ensuring the profitability of the firm in the competitive
market environment. The above discourse discusses the various concept of the strategic
management with the emphasis on the CSR activities as one of the concept. It has taken certain
times to get the concept of CSR accepted in the corporate sector. The CSR has gone through
various adaptation as the process of acceptance by the corporate entities. However, there have
been consistent debate over the concept that implies both the advantages and disadvantages of

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CSR for the business organization. The discourse makes it clear that CSR activities have become
an inseparable part of the business entities in contemporary market. Along with this, the report
also sheds lights on the various business challenges that are overcome by the CSR practice of the
firms. However, the firms also face challenges in performing the CSR initiatives, but at the same
time, these challenges can be overcome.

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