The Value of CSR: Tangible Benefits and Costs

This article discusses the tangible benefits and costs of implementing a CSR policy for organizations. Tangible benefits include reduced turnover rates and operating costs, while tangible costs include production, transportation, and operating costs. The article also explores the benefits and costs to stakeholders such as staff, vendors, customers, shareholders, communities, and the public at large.

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The value of CSR
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1. What are some of the tangible benefits of an organization that implements a CSR
policy? What are some of the tangible costs?
Tangible benefits of Corporate Social Responsibility are the benefits that are quantifiable
easily in physical and financial terms whereas intangible benefits are non-physical in nature
hence harder to quantify. The tangible benefits of Corporate Social Responsibility to
organizations include reduced turnover rates and reduced operating costs. The reduced turnover
rates are caused by organizational commitment which leads to a reduction in the turnover rates
since committed employees have a desire that is strong in maintaining their membership in the
organization (Caldwell, Truong, Linh & Tuan, 2011 p.179). Organizational commitment has
often been used in the prediction of behaviors of employee withdrawal from organizations,
which significantly correlates with turnover, intention to leave one’s job and the intention to
search for job alternatives.
On the other hand, high Corporate Social Responsibility by organizations has been
hypothesized to translate to reduced operating costs in organizations. More efficient processes
and increased efficient use of resources assists companies in the reduction of their operating
costs in the long run, given the work to be done remains constant since fewer workers will be
required for the completion of the work (Guest & Woodrow, 2012 p.112). Furthermore, the
increased efficiency of the firm which arises from high-quality employees and greater learning
leads to greater output which results in reduced costs. Similarly, a reduction in the turnover rate
also results in cost savings for companies. Therefore, it is hypothesized that when the efficiency
level of a firm increases, turnover rates of employees decrease due to an increase in their quality,
which results to a reduction in operating costs (Shen, 2011 p.1353). The tangible costs of

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Corporate Social Responsibility include production costs, transportation costs and operating
costs.
2. What are some of the benefits to an organization’s stakeholders (staff, vendors,
customers, shareholders, communities and the public at large)? What might some of
the costs be to certain stakeholders?
When an organization builds Corporate Social Responsibility elements in its philosophy
of operations and integrates them in its business model, the organization is said to have
possessed a mechanism of self-regulation that monitors, guides and ensures its adherence to
norms, ethics and law in carrying out activities of the business (Yang, Colvin & Yim-Yu, 2013
p.45). The aspect ensures that all internal and external stakeholders’ interests have been served.
In other words, a business’ objective of being responsible socially is achieved when its activities
benefit stakeholders by exceeding or meeting their expectations. The benefits include media
interest/coverage hence good reputation, enhancement of client relationship, saving money,
energy and operating costs. The costs include costs of operating the business by shareholders and
product costs to customers.

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References
Caldwell, C., Truong, D., Linh, P. & Tuan, A. (2011) ‘Strategic human resource management as
ethical stewardship’, Journal of Business Ethics, 98 (1), pp.171-182.
Guest, D. & Woodrow, C. (2012) ‘Exploring the boundaries of human resource managers’
responsibilities’, Journal of Business Ethics, 111 (1), pp.109-119.
Shen, J. (2011) ‘Developing the concept of socially responsible international human resource
management’, International Journal of Human Resource Management, 22 (6), pp.1351-1363.
Yang, N., Colvin, C. & Yim-Yu, W. (2013) ‘Navigating corporate social responsibility
components and strategic options: the IHR perspective’, Academy of Strategic Management
Journal, 12 (1), pp.39-58.