Why it pays to be socially responsible in business

This report discusses the importance of critical thinking and Corporate Social Responsibility (CSR) in business. It analyzes a case study related to CSR and how it contributes to achieving social goals and sustainability. The report evaluates various ideas expressed in the case study and provides evidence and reasons to support them. It also highlights the benefits of CSR in increasing revenue, sustainability, and growth, and how it helps in gaining customer loyalty. The report concludes by emphasizing the importance of CSR in different segments of society and investigating ways that organizations can adopt to earn maximum revenue in the future.

Why it pays to be socially
responsible in business.

TABLE OF CONTENTS.
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................5
Describing the purpose of critical thinking.................................................................................5
Evaluating the ideas based on the research:................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
This report is based on the case study related to the CSR that can be define as corporate
social responsibility practice that company has to fulfil in order to protect the environment. This
policy aims to contribute to achieve the social goals in order to sustain in the business
environment (Hur, Moon and Kim, 2020). The mentioned case study has discussed most of the
company a feel pressure to become more environmental responsible and accountable to their
shareholders for conducting the business more ethical. Moreover, CSR is increasing at the rapid
rate in the business environment and becoming more influential the way company operates and
affecting the business model and strategy. Along with this, Corporate Social Responsibility
benefit the organization in increasing the revenue and sustainability as well as growth in
customer loyalty that contributes in increasing the finance of the company.
Furthermore, in the case study it was identified by the analyst that many organizations are
destroying their shareholder’s income as well as customer can identify the position of the
business in the market by checking the contribution of the firm for society. In addition to this, the
case study has also described the characteristics of the company that being environmentally and
socially responsible. The present report will discuss on the purpose of critical thinking that can
be define as disciplined process that helps individual in analysing, applying, synthesizing and
evaluating the information that has been gather from various sources. Moreover, it can be state
as an ability of an individual for investigating the facts and figure in order to make out the
judgement.
The main purpose of critical thinking is to understand the case study as well as make the
rational judgement. As well as it allows individual in performing the research in order to find the
appropriate solution regarding the problem face by companies that are feeling pressurized for
following CSR. There is example in the case study that role of business in becoming more
important in the business compare to the government. Furthermore, there organization can
create positive impact on the environment if its motto, vision and strategies are in the right place.
Although, the person with critical thinking ability will be able to easily understand the case
study. Lastly, the report will throw light on ideas expresses in the quoted case study.

MAIN BODY
Describing the purpose of critical thinking
Critical thinking is an intellectual process that helps individual in solving the technical
problems and find an appropriate solution relating to CSR. It is a skilful concept that solve the
gather information by applying, evaluating and investigating (Defining critical thinking., 2019).
This skill is generally used to find the clarity, accuracy consistency, relevance and good reason
related to the subject (D’Alessio, Avolio and Charles, 2019). Furthermore, it mainly used to
address the question that requires reasoning, concept, implication, objection, question at issues
and different view points and alternative framework. In simple, words it can be described as a
practice of being responsive of towards the variable subject matters. Along with this, it is a
combination of scientific thinking, economic thinking, historical, philosopher and moral
thinking process.
It is generally consisted of two major components such as sets of information and
believes as well as the habit based on the process of using these skills to solve the complex
problems (Wechsler and et.al.,2018). It is not a universal skill that an individual possess by
birth rather it is an ability that a person develop by studying or by participating in the group
project. As group activity plays major role in enhancing this skill because for completing the
task every member has to provide the team with an innovative idea. Thus, it helps in building
this idea effectively and more efficiently. Furthermore, critical thinking plays an important role
such as improves the decision-making ability of an individual. It is very essential in academic
lifestyle of a student as it allows an individual in resolving the key problems an engaging in
important issues that contributes in building overall success. In addition to this, it encourage
the curiosity and enhance the creativity of an individual.
Moreover, the article given in the case tries to convince business about adopting
corporate social responsibility such as by building the environment the companies can positive
impact on the customer as well as in the market area. That will leads in building strong
relationship with them as well as increase the profitability of the organization. The company has
to align their goals by keeping the point of environment in the mind and make strategies so that
it can attract more and more customer. The classic example of Unilever has set their objectives
and target that has resulted in increasing the sustainability of the organization in external
environment. This strategy is increasingly rapidly an allowing company to develop the

business model. However, some analyst have investigated the negative impact of CSR policy
that most of the large company are making use of capital that has been invested by their
shareholders. This has resulted in damaging the relationship of the company and their
stakeholders. Along with this, it also affects the capital of the firm because the organization
has to take out a certain percentage of finance from their total profit for conducting the CSR
service for customer and environment (Franco and et.al., 2020). Moreover, the company with
large budget are able to invest more in these activities but small business are not able to
finance more thus it creates more pressure for the small and medium company. And those firm
forcefully have to invest in such strategies and policies.
Moreover the article also focuses on emphasizing organizations that CSR also works with
the interest of all the stakeholders. Also, CSR issues are linked to overall environmental and
social objectives. Further, understanding the stakeholders needs and wants is very essential to
achieve growth and success. This can be done through investing in time and managing
relationships by making business process more transparent, and proactive so that they are able
to connect with the organization in more effective manner. Furthermore, organization can hire
effective communicators that will be helpful in communicating long term objectives and
persuade various potential investors to invest in various stock so that business can expand easily.
Also, various measures need to be developed so that information related to various customers,
employees and suppliers can be gathered through auditing procedures.
Evaluating the ideas based on the research:
From the article one idea made is that “organizations create positive impacts on
environment and society if motives, institutions and incentives are in right place.”
According to Vollero and et.al. (2019) business efforts become more sustainable and responsible
if wealth is increased through continuous sales and profits. Moreover, small portion of profits
make positive social change in society that also reduces the business risks. Hence, it improves
reputation as more people are attracted towards the firm products and services. Also, incentives
helps in generating savings for the business and hence make difference in the society. Further,
most of the companies adopt a particular business code of ethics so that positively committed to
protect the environment through various measures that differentiate from other competitors. On
the other hand Yoon and Chung (2018) stated that even though institutions and motives of firm
are systematically developed business avoid social responsibility and thus they are more

focused on achieving primary motive of profits. Also, on the contrary note, financial incentives
are not key in attracting and retaining quality staff.
Another idea is that there is “ link between CSR and financial performance of the
firm as recent data and past years has allowed to investigate on this matter more
effectively”. In this regard Advantage (2020) stated that improved brand image through CSR
lowers the financial risk of the firm and hence organizations are less likely to go bankrupt than
those who are not engaged in it. Moreover, Wang and Sarkis (2017) argued that firms practising
CSR has to sacrifice the freedom of earning profits as they are more focused in contributing to
the society benefits. Focusing more on social concerns helps the society to grow on better
grounds and hence allows firms to stay ahead in competition. Further, those companies who
follow CSR based polices on average tends to have higher financial performance than those
who don't. Also, during the pandemic companies who are based on CSR policies outperformed
than others. Moreover, performing best in monetary terms allows firm to develop those products
that are unique, sustainable and different from that of competitors.
Other idea described in article is “ Companies are able to perform extremely well by
CSR as they gain better opportunities of capital, human and other resources from various
sources”. According to Yuan and et.al. (2020) companies tend to attract quality employees that
are eager to make change in the society. A large strength in numbers may not be efficient to
achieve organization goals but collective efforts of few professional employees improves the
morale and boost the productivity. Moreover, Brin and Nehme (2019) stated that CSR activity
attracts potential investors for the company as they are ready to invest in those firms where
chances of profits in future are higher. Hence, with availability of large funds firm can develop
innovative business policies for future expansion. On contrary Cramer (2017) stated that types of
products, services and brand image company holds in market also helps in gaining useful
opportunities from different regions. Developing new product lines, finding new markets and
improving customer services also helps in performing extremely well. Moreover, offering
various promotional discounts also attract large number of customers apart from the amount of
CSR activity the company does.
Article also made idea regarding “Companies facing less capital constraints because
they were transparent in their business activities and also they maintain better
relationships with their stakeholders”. In this regard Boccia, Malgeri Manzo and Covino

(2019) stated that markets are becoming more complex in nature and hence it is very essential
for the organization to state true financial position to gain customer loyalty in long run
otherwise the firms might lose their market base if relationships are not build stronger. Whereas
Chang and Yeh (2017) stated that there are certain organization that disclose high quality of non
financial data to its various stakeholders using various auditing procedures by proving that they
have fulfil their part of social responsibility apart from earning profits. Further, effective
communicators helps in communicating the long term goals and persuade stakeholders to invest
in company in the future. This can be only done through understanding closely the needs of
stakeholders and investing enough time in managing these relationships.
CONCLUSION
From the above report it can be summarized that critical thinking helps in identifying
problems so that particular judgement can be formed. Also, importance of Corporate social
responsibility in today business world had been analysed effectively. Moreover, various claims
from the article along with evidence and reasons had provided for support. Further, idea from
the case study had been investigated to either support or oppose it using outside sources. Hence ,
article helped in identifying the importance of CSR in different segments of society and
investigate ways that had been adopted by the organization to gain customer loyalty and earn
maximum revenue in the future.

REFERENCES
Books and Journals
Advantage, C., 2020. Corporate Social Responsibility. CSR and Socially Responsible Investing
Strategies in Transitioning and Emerging Economies. 65.
Boccia, F., Malgeri Manzo, R. and Covino, D., 2019. Consumer behavior and corporate social
responsibility: An evaluation by a choice experiment. Corporate Social Responsibility
and Environmental Management. 26(1). pp.97-105.
Brin, P. V. and Nehme, M. N., 2019. Corporate social responsibility: analysis of theories and
models.
Chang, Y. H. and Yeh, C. H., 2017. Corporate social responsibility and customer loyalty in
intercity bus services. Transport policy. 59. pp.38-45.
Cramer, J., 2017. Corporate Social Responsibility and Globalisation: an action plan for
business. Routledge.
D’Alessio, F. A., Avolio, B. E. and Charles, V., 2019. Studying the impact of critical thinking on
the academic performance of executive MBA students. Thinking Skills and Creativity.
31. pp.275-283.
Franco, S. and et.al., 2020. Are you good enough? CSR, quality management and corporate
financial performance in the hospitality industry. International Journal of Hospitality
Management.88. p.102395.
Hur, W. M., Moon, T. W. and Kim, H., 2020. When and how does customer engagement in CSR
initiatives lead to greater CSR participation? The role of CSR credibility and customer–
company identification. Corporate Social Responsibility and Environmental
Management. 27(4). pp.1878-1891.
Tamvada, M., 2020. Corporate social responsibility and accountability: a new theoretical
foundation for regulating CSR. International Journal of Corporate Social
Responsibility.5(1). pp.1-14.
Vollero, A., and et.al., 2019. Corporate social responsibility information and involvement
strategies in controversial industries. Corporate Social Responsibility and
Environmental Management. 26(1). pp.141-151.
Wang, Z. and Sarkis, J., 2017. Corporate social responsibility governance, outcomes, and
financial performance. Journal of cleaner production. 162. pp.1607-1616.

Wechsler, S.M. And et.al.,2018. Creative and critical thinking: Independent or overlapping
components?. Thinking Skills and Creativity. 27. pp.114-122.
Yoon, B. and Chung, Y., 2018. The effects of corporate social responsibility on firm
performance: A stakeholder approach. Journal of hospitality and tourism management.
37. pp.89-96.
Yuan, Y. and et.al., 2020. Business strategy and corporate social responsibility. Journal of
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Online
Defining critical thinking., 2019. [Online]. Available through
<https://www.criticalthinking.org/pages/defining-critical-thinking/766>.