CSR in companies
To what extent is Corporate Social Responsibility (CSR) beneficial to a company’s performance?
Conventionally, Corporate Social Responsibility (CSR) was defined as actions businesses take to improve society’s welfare (McWilliams and Siegel, 2011). Currently, CSR has expanded into developing new business models that honor human rights, combat societal and environmental challenges, and profit companies at the same time (“Business case for CSR”, 2013). CSR also emphasizes on engaging shareholders in decision-makings, to help better manage the company (“Business case for CSR”, 2013). While CSR is gaining popularity, especially amongst larger companies, the extent to which CSR benefits a company’s performance still remains highly contested. Although there seems to be a conflict of interest between practicing CSR and maximizing profit, a closer inspection would reveal benefits of practicing CSR in terms of enhancing companies’ performances. This essay aims to analyze how companies are impacted by their CSR practices, focusing particularly on the fiscal effects. These effects, which are often beneficial to companies, include lowering costs, helping companies attract and retain better employees, building stronger relations with stakeholders, and helping improve and secure company’s reputation.
Lowering Cost
Adopting CSR principles involves expenses that range from purchasing new environmentally friendly machineries to remodeling and improving working environments (Tsoutsoura, 2004). This CSR principle of spending money seems to contradict corporations' main goal of maximizing profit. Therefore, there appears to a conflict of interest between adopting CSR principles and enhancing companies’ performances. Nonetheless, benefits of practicing CSR can be identified, though not immediately after the costs are incurred (Tsoutsoura, 2004). Since socially responsible companies tend to apply stricter policies to reduce waste and ensure better quality control, adopting CSR
Conventionally, Corporate Social Responsibility (CSR) was defined as actions businesses take to improve society’s welfare (McWilliams and Siegel, 2011). Currently, CSR has expanded into developing new business models that honor human rights, combat societal and environmental challenges, and profit companies at the same time (“Business case for CSR”, 2013). CSR also emphasizes on engaging shareholders in decision-makings, to help better manage the company (“Business case for CSR”, 2013). While CSR is gaining popularity, especially amongst larger companies, the extent to which CSR benefits a company’s performance still remains highly contested. Although there seems to be a conflict of interest between practicing CSR and maximizing profit, a closer inspection would reveal benefits of practicing CSR in terms of enhancing companies’ performances. This essay aims to analyze how companies are impacted by their CSR practices, focusing particularly on the fiscal effects. These effects, which are often beneficial to companies, include lowering costs, helping companies attract and retain better employees, building stronger relations with stakeholders, and helping improve and secure company’s reputation.
Lowering Cost
Adopting CSR principles involves expenses that range from purchasing new environmentally friendly machineries to remodeling and improving working environments (Tsoutsoura, 2004). This CSR principle of spending money seems to contradict corporations' main goal of maximizing profit. Therefore, there appears to a conflict of interest between adopting CSR principles and enhancing companies’ performances. Nonetheless, benefits of practicing CSR can be identified, though not immediately after the costs are incurred (Tsoutsoura, 2004). Since socially responsible companies tend to apply stricter policies to reduce waste and ensure better quality control, adopting CSR