Why Businesses Should Use CSR: Analysis and Challenges

This report analyzes why businesses should use CSR and the challenges they face in implementing it. It discusses the benefits of CSR, such as improved public image, increased brand awareness, cost savings, competitive advantage, customer engagement, and more. It also highlights the challenges, including lack of consensus, narrow perception, transparency issues, visibility factor, and financial difficulties. Overall, CSR can help companies improve their image and attract top-level candidates, but it also comes with challenges that need to be addressed.

INTRODUCTION
Corporate social responsibility is a type of international private business self-regulation that aims
to contribute to societal goals of a philanthropic, activist, or charitable nature or by engage in or
support volunteering or ethically-oriented practice. This report covers issues such as an analysis
of why businesses should use CSR and what challenges they face in that.
MAIN BODY
Analysis of why businesses should use CSR
Improved Public image-
Consumers prefers those companies whose image is good in the market. They feel that if
the company does a certain amount of charity then they are committed to them. It can be in any
form such as employees of the company doing any kind of charitable work by volunteering on
their own.
Increased brand awareness and recognition-
If the company is committed in these type of services then they will be able to gain
presence in media and it will help them to gain a good image in a large area which will also help
them to spread awareness about brand.
Cost Savings-
There are many ways in which CSR can help the company to save cost and help in
contributing for the betterment of the society. For instance decrease the cost off the products, use
less amount of packaging.
Competitive Advantage-
It is necessary for the companies to practice these type of activities as it helps them to
gain advantage over their competitors. Apart from that, this will also help the company to
position and perceive themselves to be more committed in the eyes of eyes of public and to work
for the benefit of social and environmental factors.
Customer Engagement-
Company should use this as a advantage that they are working for the betterment of the
society so that even employees of the company can be aware of this aspect. This will give them a
sense of pride as they like to work for those companies who donates a part of their income for
the betterment of society than for those who do not do such activities. Also this will help the
businesses to attract top level of candidates and retain them for a long period of time.
More benefits for employees-

If the company practices CSR then there are various types of benefits that their
employees will be getting which ultimately will help the company. It will make the environment
of the company more positive which will help the employees to work with more concentration
and achieve the goals. This also helps the growth on both the basis that is personally as well as
professionally.
Challenges that the businesses face in CSR-
Lack of consensus on CSR issues-
There is a lack of this factor amongst business and agencies concerned with this aspect.
This leads to duplication in the charitable work. They need to work on building an spirit which is
collaborative instead of making it competitive one. This limits the abilities of business to work
on these practices.
Narrow perception towards CSR-
Many business sees this aspect with a very narrow minded approach on the initiatives of
CSR. They conduct it on a low level rather than covering the whole area. They are still confused
that do they need to make contribution or participate for the long run or short run.
Issues of transparency-
One of the key issues is lack of transparency from the agencies and businesses so that
they can hide the efforts they made and the adequacy of it with the audit, necessary utilization of
funds etc. It is necessary to maintain the level of trust between the businesses and the community
and that is possible only when transparency is maintained between both the parties.
Visibility Factor-
CSR helps to enhance communication with the help of media and the role that media
plays in this aspect is to highlight the successful initiatives of CSR in order to make the public
sensitive towards business. This leads to intervention of government bodies and the companies
miss out the main point of conducting the CSR.
Lack of participation due to monetary factors-
Many businesses face the challenges of financial difficulties while implementing the CSR
as there are other areas which requires their attention such as meeting the needs and wants of
consumers which requires regular investment. This is the reason company has to allocate the
funds according to their budget and the support they have from government.
CONCLUSION

From the above studies it has been concluded that many companies are getting
benefitting from this aspect as it is helping them to improve their image, position their brand in a
new way and it is helping them to attract and retain top level of candidates. On the other hand
there are many challenges while implementing CSR such as facing issues in allocation of funds
with the support from the government and utilize it according to the budge and not maintaining
the level of transparency.