Corporate Social Responsibility (CSR) is a luxury companies can’t afford during recession. Discuss INTRODUCTION
CSR is mainly concerned with giving back to the society, that is, the environment within which the business operates. CSR is not only involved with what the business does with the profits, but also how the business has made its profits in the first place. It aims to meet and exceed the stakeholders’ expectations (Johnson, et al., 2005) The examples of CSR responsibilities have been elaborated using these dimensions; the employees, suppliers, customers, physical environment and the social environment (Jobber, 2010). Through this study we shall see that all these work together to fulfil a common goal for the company, which is profitability, sustenance and long life, and working in harmony with the society at large.
Arguments for CSR
It is often assumed that CSR increases operating costs, but in my opinion this is not the case; better environmental management for example, waste reduction, recycling of materials, energy efficiency can help in cost cutting and improving efficiency. For example, Wal-Mart encouraged companies to reduce the size of packaging. This enabled it transport more goods in few trips thus reducing emissions from trucks and saving on fuel costs as well. Wal-Mart also insisted on their manufactures to produce concentrated laundry detergents, which enabled it to save on packaging costs and shelf space (Jimena, 2009).
Through CSR a company can contribute positively to the society, hence building trust and creating a good image for their company. For example, BP has an advertisement showing that they have taken steps into reducing harmful emissions. As a result of these a company will easily be accepted by a society, especially when venturing into new markets. They will also gain customer loyalty, which can help them survive and get through the recession period. 3.
CSR, if planned well, can provide marketing opportunities to companies at a low cost. For example, The Body Shop has built its business on corporate social responsibility ideals. From its launch in 1976, it has experienced rapid growth of 50% annually. The Body Shop obtained a full listing on the London Stock Exchange. Their product prices were then increased by 500% and hence the nickname ‘The shares that defy gravity’. They have basically achieved this success by fulfilling their mission values; Activate self-esteem, protect the planet, Fight against animal testing which was banned in European countries in the year 2009, Support community trade especially in the third world countries for example, Guatemala where they buy aloe vera from the farmers at a fair price. They defend human rights e.g. Fight against domestic violence. As a result of these the Body Shop has gained customer loyalty and hence they don’t have to spend a lot on marketing and advertisement, leading to good chances of survival during the recession period (Rawat, 2010). 4.
CSR improves accessibility to capital - with a good reputation, potential investors are likely to be attracted and convinced with a company that is environmentally and socially responsible. Therefore during recession these companies can have higher chances of gaining funds or loans as compared to companies which are not socially or environmentally responsible for the surroundings (Jobber, 2010). 5.
CSR reduces employee turnover, and employers are likely to attract and retain a reasonably productive workforce. For example, salesforce.com; a virtual service company, they have a policy of good corporate citizenship. They have encouraged their employees to participate in charitable projects at the expense of the company, they believe that through this they can attract, retain and motivate their employees (Jobber, 2010). This helps the company save finances which would have otherwise been spent on recruitment. With this in mind and practise, companies can survive the recession period with as...
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