Exploring the Long-Term Benefits of CSR: A Case Study Approach

Desklib provides past papers and solved assignments for students. This report analyzes the impact of CSR policies on business success.

STRATEGIC MANAGEMENT
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INTRODUCTION
In this study, the importance of Corporate Social Responsibility is highlighted. CSR is the policies
taken up by companies to reduce the impact on the environment. The importance of CSR in the
business context is discussed in detail. The benefits of CSR, in the long run, are also included in
the study. The benefits which the company can avail after implying the CSR policies in the
business is also studied along with the differentiation of the CSR concept in developing and
developing worlds (Visser and Tolhurst, 2017).
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BODY
Definition of CSR Activities
CSR is a business approach that companies take in order to reduce the emissions in the
environment and to use a sustainable approach while conducting business (James Chen, 2018).
It uses sound principles of sustainable development by resulting in economic, social and
environmental benefits to society and all the stakeholders. CSR covers many points like human
rights, environmental concerns, corporate governance, health and safety of employees,
appropriate working conditions for the employees and its contribution to the economic
development of the enterprise.
CSR policies help the companies to be conscious of the activities and the efforts they are
making towards the society. To follow up CSR policies, it means that the company is operating
in ways that do not disturb the social and environmental concerns and instead contribute
positively to it (Carroll and Shabana, 2010).
POPULARITY OF CSR POLICIES IN BUSINESSES
CSR has many benefits to businesses which is why it is becoming popular in all leading
businesses. The benefits of applying CSR policies in business are listed below-
1. Improves Public Image - Companies can improve their brand image by forming and
executing corporate social responsibilities. Even customers like to purchase goods and
services from those companies who have their CSR policies in operation than those
companies who have nonexistent CSR policies. It gives the brand recognition and
acceptance from customers in a more open way. Such companies are also considered
more philanthropic than those without any CSR policies. Companies can improve their
brand image by giving donations to generous causes, supporting non-profit
organizations, volunteering in causes and forming strong partnerships with these
associations (Schwartz, 2017)
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2. Increases Media Coverage - Forming relationships with media is important as the
endeavours you are making towards the environment or the social cause will go
unnoticed if they are not brought to light. Getting involved with CSR policies gets the
attention of media and the brand is promoted in good light. Alternatively, if the
company has had negative impacts on the society or environment, that also will get
picked up by the media and that may ruin the brand image. Media visibility is thus to be
the tread of carefully (Sprinkle and Maines, 2010)
3. Boosts Employee Engagement - Employees do not like to work in a dull or boring
environment. The company can engage its employees and use their talents in following
up with CSR policies. Employees concerns and rights must also be well taken care of and
utmost protection and safety should be provided to them against any harm. This also
counts as CSR as it is the company’s corporate and social responsibility to give adequate
working conditions to the employees. Employees are more active if the company is
taking its CSR policies seriously and employees are better working at the organization
4. Attracts and Retains Investors - The investors who are bringing in revenue to the
company should be assured that their funds are being used properly in the company.
The companies who have secure and functioning CSR policies use the budget diligently
and also stop injudicious flow in the business. This makes the investor secure about the
business and the philanthropic investor will happily invest in the cause as well as the
business. Leading companies who are exercising great CSR policies are Apple, Expedia,
ExxonMobil, General Electric, Google and many others (Double the Donation, 2019)
These are some of the benefits of CSR policies to the businesses as a result of which more and
more companies are implementing CSR policies.
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LONG TERM BENEFITS OF CSR POLICIES
There are a number of benefits to the company by implementing Corporate Social
Responsibility. It benefits the company in the long run and gives abundant success and
reputation in the long run-
Customer Trust - the Company gains the trust of the consumers and its customers. The
customers can relate to the CSR policies that the company has taken and become the
loyal customers of the company. Apple was engaged in ‘Global Volunteer Program’ since
the year 2011 to encourage its employees to participate in local communities. It also
started an educational and development program which was free of cost to its
employees due to which 280,000 workers were benefitted from. Under the leadership
of Apple's VP Denise Young Smith, the company has initiated various employee benefit
programs. One of these was the leave an expecting mother can take which was 4 weeks
leave before delivery and up to 14 weeks leave after the delivery. Also, the paternal
leave can be up to 6 weeks (Wang and Bansal, 2012)
Operational Cost Savings - the Company can save up its operational costs by investing in
the CSR policies as they reduce the overall costs considerably. The company might have
to invest for its branding or marketing which costs much but if the company gets
adequate media coverage from the CSR policy implement it will get natural popularity
and recognition in the market and that too in a positive light. The company can issue
various CSR policies in the company relating to health and safety of employees, limiting
greenhouse gas emissions, enhancing research activities in the company and so on.
These activities boost the employee's skill set, capabilities and interest in the company
which is a cost saver in the long run (Foote et al., 2010)
Organizational Growth - the Company grows by following a dedicated CSR policy as it
has goals to achieve and also the company achieves new goals. If the company wants to
scale new heights then it must comply with the latest CSR policies. Companies also get a
competitive advantage if they are following apt CSR policies that benefit the employees
and the environment in a positive way
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These are some long-term benefits of CSR policies in the long run. The company may benefit
greatly if it applies CSR policies and can also attain competitive edge among its rivals.
OTHER BENEFITS OF IMPLEMENTING CSR ACTIVITIES
Before understanding the many benefits of CSR policies, it is important to get a look pf some
common and popular CSR policies companies around the world are taking-
Reducing carbon footprint to combat the challenges the world is facing. The companies
can involve in using green fuels and generate lesser pollution that will reduce the carbon
footprint on the earth
Improve the working conditions for the employees and employ labour laws at work. This
will help in creating a good image for the employees as they will be assured that the
company gives the best working conditions to the employees. Implementing labour laws
will ensure that employees are protected at all times and it will result in fewer
complaints from the side of employees. They will enjoy working at the organization and
will also generate the company's performance. The company must not underestimate
the satisfied employees as they can take the company to new heights. The employees
also stay with the company for a long time and also reach at leading positions ( Epstein,
2018)
Engage in charitable giving as this will boost the moral image of the company. The
company can find a common cause like saving the environment, stray animals or
promoting veganism. By working towards these social and moral causes the company
can attract positive responses from the society and will boost company outlook and
image. A certain per cent of the company's earnings can also go as a charity for some
cause that will fulfil the CSR policy the company has taken
Work for environment saving policies - This is also a popular CSR policy followed by a
number of companies. Since the environment is degrading and the pollution levels are
soaring high, the companies can vow to limit the waste emission which will contribute
to make the earth greener and cleaner
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Make conscious investment - Companies should make conscious investments by
considering all parameters of the investment and the result it is going to reap after
certain years. It is also a part of CSR policy to invest wisely in companies which are
socially responsible. Companies should refrain from investing in such ventures that are
not socially responsible or have known to have socially or environmentally irresponsible.
Work towards minimizing climate change - Climate change is the sad reality that is
present nowadays. The green and sustainable ventures should be taken up by the
company to minimize the climate change in the long run. This will impact the society
and the environment in the long run and will also portray a good image of the company
(Epstein, 2018)
These are some of the top-most pursued CSR policies of top companies in the world. They have
huge benefits for the company and also leave a positive impact on the society and environment
where the company is functioning.
SOME EXAMPLES OF SUCCESSFUL COMPANIES
Many successful companies are an example of how to implement CSR policies and still make a
profit. Some companies with their remarkable achievements are highlighted below-
Ben & Jerry's - This company is based in Vermont and is quite famous for its successful
CSR policies. The company has a policy of using only fair trade ingredients and refrains
from using artificial or animal products. The company has also devised a sustainability
program for its farms in Vermont. Ben & Jerry's is a great example of using sustainable
mechanisms and also operating a business at the same time. It also donates to various
charitable causes from time to time (Idowu et al., 2013)
Target - The company has been in operation since 1946 and provides support to local
communities in terms of environment and sustainability. Target Company also donates
to various charitable trusts, campaigns and socially active initiatives. The company has
donated more than $875 million to the area of education since 2010 and continues to
invest in similar efforts. It recently launched a pro-transgender bathroom in its office to
support the LGBTQ cause which shows that it takes a stand for what they believe in
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Google - Google is one of the biggest corporations in the world, yet it is actively involved
in matters that concern the environment and society. It has launched its campaign
called Google Green which is an effort to use renewable energy sources instead of
combustible fuels that are perishing at a fast rate. The effort by Google has been paying
off and the power requirements have been reduced as much as 50% in their data
centres (Mondo, 2016)
These are some of the examples of successful companies who have made a mark by
implementing successful CSR policies that have done well for the environment and also given
social realization to companies who are watching their footsteps.
CSR POLICIES IN DEVELOPING AND DEVELOPED WORLD
CSR policies are very different in developing and developed countries as they have different
values, cultures, socio-economic factors and outlook towards sustainability. The leaders at the
managerial level of the organization are the prime influencers of implementing CSR policies; if
they are inclined and have consideration for any cause then company takes the initiative else
not. The principles of CSR policies are interpreted differently in different regional and
geographic differences.
Below is a graph that compares two countries and the involvement of companies in CSR
initiatives-
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Fig. 1- Comparison of Sri Lanka with New Zealand in terms of Company involvement with
environmental activities
Source- Fernando and Lawrence, 2015
Many scholars argue that the differences in CSR applications in different countries are due to
the differences in historical, cultural and customary traditions which change the outlook to
perceive things. In many developing countries of Asia like Indonesia, India, Malaysia, Thailand,
Philippines and Singapore, CSR policies do not vary much and follow a similar trend. The
practices do not much different because of the level of development in each but purely by
business factors and systems. Comparing this with the CSR policies of developed countries such
as the UK, the Netherlands and Germany, the CSR policies have shown considerable differences
and also show some similarities. For example, the British and Dutch business systems are more
likely to be affected by public pressure and legal requirements than the German businesses.
However, the similarity that can be observed is that the board of directors and middle
management play a significant role in operating the business and play an integral role in the
implication of CSR policies (Fernando and Lawrence, 2015).
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While comparing the CSR policies of Australia and Slovenia, it was observed that the countries
carried both similarities and differences. The similarity was that in both countries, the CSR
policies are applicable to the voluntary support of the public and is driven by market and public
pressure. The differences arise from the cultural perspective- factors like product demand,
management styles and financial aspects are characteristic to Australian business systems while
Slovenian business culture is more affected by employees, community and present
environmental concerns.
The improvements in the New Zealand CSR policies was as a result of operating activities like
active recycling program, maintaining a policy on environment cleanliness, choosing an
environment-friendly supplier and giving a thought on the environmental impact of the
products manufactured by the company. These factors of New Zealand context were found to
be higher than that of Sri Lankan companies (Visser and Tolhurst, 2017).
The parameters that were found to be similar of both the countries were releasing a public
environment and sustainability report, participating in environmental marketing, forming
targets to reduce carbon emissions and engaging the public in voluntary programs like waste
management. The NZ programs were much higher than its counterpart and lagging of proper
recycling programs is a major setback for the Sri Lankan companies.
When it comes to involvement in social causes, both the countries have fared well. It is evident
from the graph below-
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Fig. 2- Social initiatives of companies in NZ and SL
Source- (Fernando and Lawrence, 2015)
There are some factors where the NZ statistics show better results. Adopting family-friendly
policies, forming stress management strategies and considering diverse employees while hiring
are some of the parameters where New Zealand has ranked higher than Sri Lanka. Also in terms
of business culture, New Zealand companies have a more flexible approach which is not visible
in Sri Lankan matrix (Visser and Tolhurst, 2017). Also, Sri Lanka does not lay much stress on the
stress management of employees which is an important factor in the New Zealand context.
These are some of the differences and similarities of the application and impact of CSR policies
of developing and developed countries.
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CONCLUSION
It can be concluded that CSR policies are vital for any company if it wants to sustain in the long
run. Employees prefer those companies who have active CSR policies in practice. Companies
retain employees for a longer time and also arouse interest in work when the employees are
actively participating in CSR policies. Some examples of successful companies like Ben & Jerry's,
Target and Google were considered to see how they have been successful in managing CSR
policies while making profits at the same time. Some popular CSR policies were also discussed
which can be implemented at any business level for long term success. Lastly, a comparison was
made regarding the application and impact of CSR policies in developing and developed
countries.
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