Corporate Social Responsibility continuous commitment by businesses toward society as well as to secure the reputation or goodwill of the firm. Every corporate firm should maintain a balance between ‘corporate or business responsibility and ‘community relations’ keeping in mind social responsibility to contribute a portion towards the development of society.
Benefits of CSR to the firm
Attracts and retains staff
The business often relies on one critical aspect of human capital management i.e. Employee retention.
CSR initiatives can improve employee engagement and satisfaction that derives retention. It even attracts potential employees who carry out the need for fulfillment of the organization. An organization can retain the employees in the workforce and make sure sustainability of employees. As it focuses on the employee’s well-being, belongingness, improved skills, and motivation leads to better productivity and ultimately leads to increase job satisfaction, which increases the retention rate.
It attracts green and ethical investment
The CSR also examined the role of green investment CSR investment contributes to both financial performances as well as sustainable performance which is also known as green investment. It is contributed to assist to respond positively to the environment, or investment to increase profit without damaging the environment. CSR investment can also guide the investor in making investment decisions that can be profitable for the company in terms of making a profit and maintaining the social status in society.
It attracts ethically conscious customers
Customers expect more responsibility, action, and accountability from businesses and keep a check on their social responsibilities towards the upliftment of society and tend to share their values as it impacts public relations(PR) strategies to reflect how to speak upon important issues. A company’s ethical standards are extremely important for the customers.
71% of the people think it’s important for businesses to take stance on social movements such as gender, the environment, politics, and human rights.
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It can lead to increased profitability in the long run
Through CSR companies can think in the long run decision by taking the responsibility for the impact they have on the environment. A long term thinking can help companies make investments that pay off in the long run through increased profits. These companies cultivate positive brand recognition and increase customer loyalty. These are the key to achieving increased profitability and long-term financial success.
The Pyramid of Corporate Social Responsibility
The business organization plays an important role in the functioning of the economy, without it our economy is not able to grow and does not contribute to the GDP of the nation as it provides goods and services to the customers and satisfies their needs. It functions as the economic entity of the nation.
At some points, it aims at profit-making and got transformed into the maximum profit-making firm.
The business is expected to function under certain rules and regulations set by the state, federal, and local governments according to which the business must operate. Legal responsibilities symbolize ‘codified ethics and laws’ that simply state the fair operations as established by lawmakers. They are co-existing with economic responsibilities. It is the fulfillment of a ‘social contract’ between business and society firms expected to pursue their economic mission within the framework of the law.
Ethical responsibility starts with ensuring that the business is engaging in fair business practices- including treating all employees equally and giving them a safe working environment, treating stakeholders that play an important role in running a business, and treating customers ethically with respect. Some examples of this responsibility include setting up a higher minimum wage, guaranteeing that all the resources are ethically sourced, and employees receive remunerations and benefits without hurting the due respect of the employees.
Philanthropic responsibility is a must for any business to grow its goodwill in society, as it gives back to the community they are living, in and donates to causes that can be useful for achieving its organizational goals. It can be in many forms, simply sponsoring a local non-profit organization that can be a helping hand for you, and becoming a fundraiser by donating a percentage of your company’s annual earnings for the development of human capital. This can be done to match society’s expectations of the firm.
Importance of CSR
The importance of CSR has increased over time as it plays an important role in economic responsibility by providing goods and services to their customers and satisfying their needs. This leads to an improvement in GDP contribution, as far as an increase in globalization or an increase in population is considered, people are coming closer to the topic of sustainable environment and societal issues.
- CSR helps organizations: to develop a relationship with local communities, increase branding among the people, and creates goodwill within the society for themselves.
- It minimizes the negative impact on society as well as business firms and can foster growth by increasing wealth and value among the shareholders.
- It also conducts an ethical way of contributing to organizations as well as in the interest of local communities.
- Positively handling societal issues and prioritizing being a good citizen of the community. The balance between shareholders’ interest and local community interest.
- Organizations consider 3P’s of CSR; People, Planet, and Profit
Economic Responsibility of Corporations
Economic growth by providing goods and services and contributing to the GDP. It includes the creation of finance and assets. Through which monetary support and donations can be made for Non- profit organizations.
Societal and Environmental Responsibilities of Corporations
Organizations have become more concerned about the social and environmental nations. They have put up some schemes or steps towards the upliftment of the nations. By recycling and reuse of materials, and other movements for sustainable development.
There is a need for CSR in the organization to function properly and build an ethical environment for both society and the firm. It fulfills the long-run self-interest of organizations and builds a public image. And aims to minimize environmental damage. There are certain examples of Companies implementing CSR. Blake Mycoskie started Tom Shoes on the premise that for every pair of shoes sold, one pair would be donated to a child in need. In just 4 years, the donation has been more than 400000 shoes, it is one example of social responsibility towards society.
As in last I would suggest everyone wants to live in a healthy environment whether the organization members or the local community so, we have to go hand in hand to handle social issues for having a sustainable environment. As there is not much time left for us to make it happen in the real world.