Business entity in society
The role of the business entity in society has undergone a paradigm shift over the past three decades. Businesses can no longer consider themselves as separate entities from the society. The days when businesses would lobby for loosely framed legislation in regard to social responsibility are slowly coming to a close. Businesses can no longer afford to carry our aggressive, money-making business strategies, in blatant disregard of the social effects linked to such methods. Consumers are increasingly growing aware of their role to hold businesses accountable for their actions, with consumer protection agencies taking the frontline in ensuring companies honor their responsibility in the way of social responsibility. Additionally, the ever-present effects of climate change constantly compel large and mid-sized companies to take a closer look at the way they affect the environment as well as people’s survival.
From backing causes such as women’s rights to taking part in efforts to eradicate poverty, companies are stepping up and ramping their focus on social responsibility a rung or two higher. In today’s business world, companies have to shoulder more responsibility, which includes adopting policies to foster employees’ fair treatment. Workers can now enjoy a safer working environment as industries adopt policies oriented towards better working conditions across the board. In a bid to perform their roles for corporate social responsibility, companies are helping deal with societal, ethical dilemmas and social issues much more today than ever before in recorded history. This paper shall discuss the importance of corporate social responsibility to the survival of the business enterprise in today’s world.
Corporate social responsibility as a concept
Cite describes corporate social responsibility (CSR) as the responsibility accepted by organizations to act in a socially responsible manner. Corporate social responsibility cannot be said to have a clear definition; the general meaning refers to decision making in business that considers ethical values, respect for community, and the environment. The concepts of CSR put it on the organization to go a step further and give employees fair treatment, operate in an ethical manner that maintains integrity, uphold human rights, maintain environmental sustenance, and be an upright ‘corporate citizen’ and a responsible neighbor in their respective communities.
Tracking how the concept has evolved over time
The evolution of CSR as a concept has come with its fair share of challenges, overcoming various stages of struggle. Throughout history, the social norms and attitudes of society did not hold much meaning for businesses. Merchants would be considered successful if they managed to make money legally and steer clear of illicit trade. Technological developments across the board have seen the business entity’s growth into a multi-national juggernaut with more excellent operational capabilities that impact the world around them in many different ways. The concept of illicit business practice has come to shape CSR for businesses today. Issues such as the control of pollution, waste disposal, and provision of facilities are linked to ethical business practice cite.
The nature of CSR
CSR, as a concept in the operation of the organization, covers several aspects when it comes to the running of a company. In business firms, CSR focuses on the role that business has in handling social issues even though non-business entities share the responsibility. CSR also caters for moral issues requiring companies to come up with policies that look out for the interests of the employees. Social goals can only be achieved by organizations that are economically viable. According to the CSR outlook, companies failing economically cannot be counted upon to fulfill their social responsibility. The concept also requires socially conscious business activity from all quarters of the organization. Corporate social responsibility is not reserved for managerial staff only as workers at all levels are expected to exercise social responsibility in their capacity. CSR also insists on continuing activity. Organizations cannot cater for social interest once or twice and consider themselves as abiding by the guidelines outlined under CSR. As social and economic issues go hand in hand, companies are expected to perform their roles continually through their existence.
The relevance of CSR for organizations in today’s business world
Scholars such as cite have found that companies are genuinely paying more attention to their conduct and whether it is in line with CSR’s principles. Cite Research reveals that the concept of CSR has become ingrained in the global corporate agenda. All business organizations operate within an environment. A business organization cannot exist without a physical environment. The business entity enjoys benefits such as access to human resources, machines, money, materials, and other types of resources that it draws from its environment. On converting the inputs into sellable outputs, the business organization goes on to sell its wares to different sections of the society. The pool of consumers targeted by the business is an integral part of the environment cite. As it follows, businesses depend on their environment for inputs required in manufacturing and for the disposal of output. This being the case, businesses then are obligated to put in honest effort into preserving the society they thrive in. Profit generation is acknowledged as the core reason behind the establishment of a business entity of any kind. It is also accepted that businesses are expected to protect customers’ interests. The policies driving these two concepts should be molded in line with the long-term welfare of the environment and society around the business.
The adoption of CSR principles has brought with it a gamut of benefits. Some of these include enhanced brand reputation and image, increased quality and productivity, better chances of attracting top talent in their respective fields and retaining it, access to more avenues for business capital, reduced regulatory surveillance, reduced liability with better product safety, and diversity in the workforce.
CSR promotes sustainable business
The emergence of CSR as a concept in business can be traced back to the 1950s cite. To date, the idea has served to provide a means for customers to ensure companies are accountable for their actions. The impact of CSR on society is well-established. However, it is essential that businesses also investigate the ways in which such initiatives impact the organizations that abide by them.
Image building in the press
Positive publicity is one of the most impactful effects of responsible and sustainable business. Companies have many more avenues through which to create a presence for their brands, with social media coverage emerging as one of the top priorities. Additionally, many of the corporate awards given to companies use corporate citizenship as a criterion for choosing companies to give recognition. On the flip side are companies that operate in ways that go against their corporate social responsibility. In recent times, such companies have had to contend with harsh backlash generated by negative media coverage. Cite The Public Eye Award, established to point out companies with poor ethics that commit human rights violations, and contribute to the destruction of the environment.
In the past, such assessments, both positive and negative, were the preserve of industry professionals. However, the advent of social media ushered in a new era where information spreads much faster. The social media climate of the day allows for the dissemination of information so that ethical violations in the professional space are accessible to consumers.
CSR for consumer appeal
Initiatives fashioned for CSR have become widespread. As such, consumers are more aware of organizations that support causes that relate to them and are keen to patronize such establishments cite. As a matter of fact, a study conducted by cite involving consumers drawn for 72 countries revealed that consumers were willing to buy goods priced higher if they came from companies ran in a socially responsible way.
Businesses have the opportunity to attract more clients by affiliating with charities valued by their customer base. Additionally, by backing such charities, organizations would be staying true to the values behind their brand. Such partnerships lend help to the tackling of global issues such as poverty, conservation of wildlife, and other noble causes that customers likely hold as a priority. A business that deals in pet supplies, for instance, can benefit from the positive press generate by news of its support of an animal shelter as this is an issue that is very likely close to the hearts of its customer base.
Cite in their study investigating the impact of CSR on the performance of organizations note that consumer appeal goes up among the customer base when their behavior is directly linked to charitable initiatives. Companies such as Warby Parker, Yoobi, and TOMS, have adopted this model to positive effect. The companies have a policy where they donate an item similar to what the customer purchases. Such a donation creates the incentive within customers to spend their money at such establishments. Customers connect better with brands that introduce such initiatives and are more likely to form loyalty for the brand cite.
Ability to attract top talent and retain employees
CSR initiatives that subsidize cause aimed at global change are not only appealing to a company’s customer base but also the employees they hope to bring under their team. Observing the motivations behind career choices for employees cite notes that talented professionals, mainly those in a managerial capacity, consider the core values of companies they are interested in to find out whether these match with their own. Companies that invest in CSR objectives such as community service more than make up for lost staff-hours and revenues by raking in handsome profits that are the result of intelligent hiring.
Corporate responsibility has also be established as one of the main causes of high retention numbers in companies. Corporate social responsibility also plays in employees’ job satisfaction. As companies involve employees in the decision-making process where employees choose what charities to support, they instill a sense of belonging into the employees who are happy to be part of a more significant cause. Companywide service outings also present opportunities for team-building and increasing cohesiveness among the workforce. Service days such as this allow for bonding among employees across ranks. This also improves office relations as managerial staff interact with other employees in the organization at a personal level cite. These programs also offer employees opportunities to step out of the typical office environment and hone various skillsets.
Conclusion
Companies start with the main aim of becoming profitable entities. For a long time, businesses chose to ignore corporate social responsibility as a factor that could improve bottom lines. In recent years this has changed as enterprises are pressured from every corner to become more socially responsible in their undertakings. Social responsibility may come at a cost, yet research places CSR as one of the aspects of an organization that can improve its financial well-being.
Responsible corporate decisions also contribute to the revenues of a company on their own in some cases. For instance, the transition from paper-based reporting to a fully digital system can save the company a substantial amount of money as the budget for stationery supplies reduces. Abandoning a paper-based system contributes to the preservation of the environment and has noticeable long-term effects on the organization’s overhead costs. Other such options include the use of solar power and environmentally friendly lighting options, among others.
In some instances, the corporate consciousness exhibited by an organization and efforts to become more sustainable can be the difference between survival and failure. Companies that heavily rely on natural resources whose exploitation damages the environment can adopt new ways of sourcing materials that would save the environment and, at the same time, lay the groundwork for sustainability in a future where natural resources deplete. Through such methods, companies will be adopting a broader perspective in terms of the company’s core values.
While the concept of CSR has changed over the years, the primary principles remain intact. Such changes are to be expected in the future as well. Emerging issues will continue to shape the direction in which corporate social responsibility develops. In all possible scenarios, CSR’s role in the organization remains to keep organizations socially conscious.