The Importance of Corporate Social Responsibility

This assignment delves into the crucial role of Corporate Social Responsibility (CSR) in contemporary business. It argues that CSR is not merely a regulatory compliance measure but a vital business strategy for long-term success. The text examines how unsustainable resource exploitation can jeopardize future profitability and highlights the importance of shared value creation for stakeholder well-being and competitive advantage. It concludes by offering recommendations for aligning CSR initiatives with business objectives, conducting thorough societal impact assessments, addressing employee concerns, and effectively promoting CSR efforts through marketing strategies.

Running head: CSR IN BUSINESS
CSR in Business
Name of the Student:
Name of the University:
Author note:

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Abstract:
The importance of CSR in ensuring overall growth and sustainability of business
organizations cannot be overstated. While CSR is getting incorporated in the business model of
many companies, it is much more than a mere obligation to consider the interest of the
stakeholders and the community, the business is conducted in. In today’s world, the CSR has
emerged to be a strategic approach adopted by companies to strengthen its competitive edge.
Considering the unquestionable importance of CSR in business growth, the present report
intends to critically analyse the common CSR strategies adopted by the organizations in today’s
world and recommend steps that can enhance business profitability through the effective
implementation of the same.

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
CSR: Importance in Organizations..............................................................................................2
CSR as a Business Strategy.........................................................................................................3
Examples of CSR Activities........................................................................................................4
Conclusion.......................................................................................................................................4
Recommendations............................................................................................................................5
Reference List..................................................................................................................................6

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Introduction:
Unlike earlier times, the business organizations in today’s world, contest in a highly
competitive market. Consequently they should not merely be driven by the profit motive, and
rather should consider the idea of conducting business in an ethical and responsible way. This is
exactly the reason why most of the business organizations invest in Corporate Social
Responsibility, and ensure that corporate self-regulation is being incorporated in its business
model (Tai & Chuang, 2014). An organization that not only tries to boost its sales growth, but
also complies with the ethical standards of stakeholder integrity, employment standards and
environment protection laws, definitely ensures longer sustainability in future.
Discussion:
CSR: Importance in Organizations:
The importance of CSR in ensuring overall growth and sustainability of business
organizations cannot be overstated. First of all, while there are multiple organizations providing
similar products or services in a highly competitive market, consumers are often confused about
which organization to choose. However, if an organization declares its active engagement in
social welfare programs, or willingly agrees to invest a share of revenue earned through every
product sold in any good cause, consumers will be more willing to buy the product from that
company. Thus, it does help in boosting the sales and revenue earning capacity of a company.
Further, In this connection, it may be interesting to note that research suggests that around 55%
of consumers are willing to buy a product or avail a service from a company, that they consider
to be socially and ethically responsible (Suliman et al., 2016). Next, the engagement in the CSR
activities also helps in enhancing the word-of-mouth publicity of an organization as well. When

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an organization invests in business to maximize the shared value creation for all its stakeholders,
it certainly achieves a positive reputation amongst its immediate as well as potential consumers.
This is the reason why 93% of the largest companies of the word annually publish a CSR report,
offering a detailed overview of its engagement in various CSR initiatives. Again, it is needless to
state that a company’s involvement in CSR initiatives also helps in enhancing employee
motivation, as they derive unparalleled pride in working for a company that is supporting the
community. A recent research conducted by Aon Consulting claimed that 80% of the
respondents stated that they would work for a company that is invests in CSR initiatives, while
44% claimed that they do not mind working with a less reputed company, if it is engaged in CSR
activities (Pedersen, 2015).
CSR as a Business Strategy:
While CSR is getting incorporated in the business model of many companies, it is much
more than a mere obligation to consider the interest of the stakeholders and the community, the
business is conducted in. In today’s world, the CSR has emerged to be a strategic approach
adopted by companies to strengthen its competitive edge. It might be interesting to note how
Coca Cola was once accused to be a corporate villain in India, for extracting enormous amount
of groundwater from Kerala as well as for containing unacceptable amount of pesticides. While
the sale of Coca Cola in India dropped by 30 to 40%, the company’s reputation also got ruined
(Karnani, 2014). In order to recover its reputation, the company adopted the CSR strategy
whereby it heavily invested in charitable activities in India, including the alleviation of poverty
and illiteracy amongst the backward and remote interiors of the nation. It has also introduced the
mission of 2020 through which it aims to empower the women entrepreneurs of India among
other initiatives (Parra et al., 2016).

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Examples of CSR Activities:
There are various kinds of CSR activities that an organization engages in. Presently, the
companies offer heavy donations to charity organizations, collaborate with not-for-profit
business concerns for arranging campaign about important social causes such as poverty
irradiation or importance of maintaining ecological balance. Cause-related marketing whereby
the company donates a share of the amount earned by selling each product, is also a common
CSR activity. Again, the CSR activities may not necessarily include philanthropic activities, but
can also include strategies that help in enhancing health, safety and occupational well-being of
the employees. Some real-life examples of CSR practices may include how Google employees
managed to raise $2.6 million for the earthquake affected victims of the Sichuan Province, and
how the company donated $1.02 million free advertising search for the well-being of the people
(Kleine, 2014). Again, Autodesk Foundation encourages its employees to apply their skills and
expertise through paid volunteer hours, whereby they invest sufficient time for important social
causes including packing meals for the impoverished people, and arranging crisis-relief
programs. Again, the second largest discount retailer of the US market, Target has managed to
exceed its goal in reducing water use by 10 percent (Uhrich et al., 2014). Besides, the company
has also expanded its irrigation technology to an additional 601 locations and is still attempting
to add 75 % native and sustainable plantings in all of its new stores (Caplan et al., 2016).
Conclusion:
As evident from the above discussion, CSR is not just a practice that a company has to
initiate in order to comply with the regulatory framework of a country, but rather it is a business
imperative that cannot be avoided if an organization wishes to sustain in the given business

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scenario. First of all, the exploitation of resources for immediate profit will certainly threaten and
impede future profitability of a company. Next, a company that is indifferent to the well-being of
its stakeholders, will soon fail to survive amidst cut-throat competition, as it is the shared value
creation that offers sustenance to a company.
Recommendations:
It is clearly evident that the implementation of CSR initiatives is a mandate in any
organization. However, most importantly, it is recommended that the CSR agenda must be
aligned to the business market and immediate business environment of a company. For example,
an Australian company investing in the social welfare programs of Asia will barely make an
impact. Next, a thorough research into the day-to-day issues of the society required acquaintance
by the concerned authority. CSR policies may encounter employee resistance at the start, and it
is recommended that the management authority explains the purpose, scope and benefits of CSR
to its employees. Lastly, an investment in CSR initiative must go hand in hand with a sound
marketing strategy. A company’s effort to promote well-being should not go unheard, and it
must essentially be accompanied by strong promotional efforts on social media sites as well as
company websites in the form of shared pictures, live videos and most importantly a published
CSR report.

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Reference List:
Caplan, D., Dutta, S. K., & Lawson, R. A. (2016). Corporate Social Responsibility Initiatives
Across the Value Chain. Journal of Corporate Accounting & Finance, 27(4), 57-66.
Karnani, A. (2014). Corporate social responsibility does not avert the tragedy of the commons.
Case study: Coca-Cola India. Economics, Management and Financial Markets, 9(3), 11.
Kleine, D. (2014). Corporate social responsibility and development. The Companion to
Development Studies, 7(1), 195.
Parra, C. M., Tremblay, M. C., & Castellanos, A. (2016, September). Prominent voices and
prevalent discourses: A corporate social responsibility application. In Digital Information
Management (ICDIM), 2016 Eleventh International Conference on(pp. 74-78). IEEE.
Pedersen, E. R. G. (Ed.). (2015). Corporate social responsibility. Sage.
Suliman, A. M., Al-Khatib, H. T., & Thomas, S. E. (2016). Corporate Social
Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in
the Future, 15.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.
Uhrich, S., Koenigstorfer, J., & Groeppel-Klein, A. (2014). Leveraging sponsorship with
corporate social responsibility. Journal of Business Research, 67(9), 2023-2029.