Introduction
Corporate social responsibility is an ethical idea that organizations have a moral duty to ensure that their actions are not harmful to people, the community, or nature. In corporate social responsibility, a firm operates in ways or even engages in activities outside its operations that enhance society and the environment.
Friedman (1970) gives a sharp criticism of corporate social responsibilities. He argues that discussions that stress the importance of corporate social responsibilities are marred by looseness in analysis and the need for more rigor. He argues that an incorporated business enterprise enjoys a separate entity; hence it should be excluded from social responsibilities. In light of this, Friedman believes that social responsibility should be directed to an individual, not an organization. However, an organization employs an individual to help it make as many profits as possible, not engage in social activities. Hence his primary responsibility is to the company and not to society. According to Friedman, social obligations have the negative impact of reducing the profitability of the firm while neglecting the purpose of engaging In business.
In as much as I agree with Friedman that engaging in corporate social responsibility has its challenges, I believe that being socially responsible has benefits that outweigh the challenges. These benefits are both to the organization and society. A firm has a responsibility both to the shareholders and the stakeholders. Both the shareholders and the stakeholders are essential to the company’s operations. This paper disagrees with Friedman (2007) that a firm’s social responsibility is to itself and to make maximum revenue.
Corporate social responsibility is vital to companies because it helps them to protect their reputation and positively engage with the outside world. This activity also helps create a better environment where people can work, live and play. There are many ways that companies can benefit from corporate social responsibility, both in the short term and long term.
Corporate social responsibility promotes the brand awareness of a company. Many social responsibilities are publicized and broadcasted in the media. When a company engages in ethical practices that positively impact society and the environment, many people learn about the brand. Some will take the extra step of researching the brand (Collier, 2022). This has the effect of increasing brand awareness, and if the product is of high quality, it results in a broadening of the customer base. This further increases the company’s market share; hence it will have the edge over its competitors.
Corporate social responsibility allows greater engagement with the customers. When firms engage in corporate social responsibility, they tend to publicize it by posting on social media and creating stories out of the efforts. Furthermore, they tend to invite media outlets to their social responsibility functions. This has the effect of having customers follow the efforts and engaging more in the company’s operations.
Moreover, corporate social responsibility allows a firm to improve its public Image. When a company engages in socially responsible activities such as charity work or environmental conservation efforts, its public Image improves positively. This is because social responsibility shows that the company is committed to positively impacting society. This way, the public Image of the company is promoted, and the company hence appears more favorable (Collier, 2022).
Corporate social responsibility gives a firm a competitive advantage over its competitors. Firms that engage in CSR are often more successful than those which do not. This is because companies that meet the needs of their customers and stakeholders can create relationships and trust with them, which will translate into loyalty and sales (Collier, 2022). This competitive advantage comes from creating a solid brand by engaging in corporate social responsibility. As Klein (2020) put it, the brand is the determinant of the success or failure of a business.
Being socially responsible helps a firm create a strong and sustainable market. Some business fields, such as the healthcare industry, are susceptible to social and environmental concerns. Companies taking up CSR in this field become less susceptible to competition. On the contrary, when a firm engages in CSR but does not have a strong market position, other competitors may enter the market and push it out of the top spot. Therefore, firms should engage in CSR at all times (Ali et al., 2019).
In the short term, companies can create a good, positive impression. This is especially important if an environmental issue is threatening the company or has a negative reputation in any other way. In this situation, the company must work with a professional to close the matter (Ali et al., 2019). This might be particularly difficult for a small business owner in our current political climate. In addition, corporate social responsibility helps ensure that employees stay at their job for as long as possible. This sort of employee retention is essential not only for the business itself but for the individual as well. Workers who leave their job prematurely can also hurt the company’s reputation.
There are several ways that companies can make use of corporate social responsibility in the long term. Some examples include membership to trade associations and academic institutions. Membership in these organizations enhances a company’s reputation and increases the likelihood that customers will continue to choose it over its competitors. This is one of those times when you should shop for the best prices. Companies also have the opportunity to learn from each other, which can benefit their communities’ economies. They can invest in creating safe and healthy working conditions for their employees. In addition, they can invest in researching and developing better ways to protect the environment (Ali et al., 2019).
Finally, companies can participate in activities that help to improve the quality of life for everyone. Here are some examples of how businesses do this:
- Industrial safety: Companies ensure that their workers are safe both on and off the job. These companies also provide employees with several different benefits.
- Environmental safety: Companies can help to clean up the environment. They can create new recycling technologies and policies. They can also provide an environmentally-friendly office space
- Animal rights: Some businesses can even work to improve the rights of animals. They can implement new policies that ensure that animals are treated humanely at all times.
In addition, companies have the opportunity to make sure that children are educated about environmental issues and stay safe in their community. They can help to create safer communities by taking part in community cleanups. In addition, they can make sure that residents have access to gas and electricity.
Companies have many different ways they can participate in social responsibility programs. In some cases, employees can even join their company’s board of directors, which provides them with an opportunity to experience the business in a different light. Further, many companies use corporate social responsibility to provide additional employee benefits (Ali et al., 2019).
Factors Companies Should Consider When Making Decisions About Corporate Social Responsibility Programs
First, companies should consider their competitors. What other businesses are there? Will the company’s competitors be able to take advantage of the business’s positive reputation? Are there any areas where it will take much work for them to compete? These are all questions you need to answer before implementing corporate social responsibility programs.
Second, companies should consider their community and its culture. How many people are in the community? Do they feel comfortable with the way their community operates? Do they feel that they are represented at all levels of government?
Third, companies should consider their employees. How many people work for the company, and what is their salary? How much money do they receive in annual bonuses and stock options? How likely are they to have issues with job security? These are all questions you must consider before implementing corporate social responsibility programs.
Finally, companies should consider other business priorities. Is there an urgent financial or product development problem? Is a government regulation soon to come into effect that will affect the company’s bottom line? Will there be a corporate restructuring soon? All of these questions will help you to answer these questions.
In building and developing businesses, several fields must be managed according to their policies. The first field is social issues. Management of social issues is a required field for any company or organization because it plays an essential role in ensuring people understand their organization’s aims. Managers should recognize the importance of managing social policies. Managers need to be able to work effectively with people from all different backgrounds to be conducive for everyone and, simultaneously, ensure that their organization benefits from any changes made.
As a manager, you will have many decisions about the company’s policy involving social issues, and you may also find it tough to make the right choices without getting into trouble. However, you can get good results if you think of the company, other people’s welfare, and your well-being. From making the right choices to ensuring they do the right things, your organization should always consider how their policies affect everybody else. Managers should be able to reach a decision that is profitable for the company and beneficial for all its members. At the same time, managers should ensure that their decisions are not carried out in an unethical way. Hence, a company is responsible for making profits for itself while engaging in corporate social responsibility (Darwin et al., 2022).
Conclusion
The bottom line is that corporate social responsibility is a wise corporate business decision and an opportunity to create profitable relationships with consumers, investors, employees, and customers. Suppose a company or corporation does not engage in corporate social responsibility but maintains a good reputation and stable financial status. In that case, it will be hard for them to compete and survive in the market. This paper has shown that corporate social responsibility does not interfere with capitalism. Being socially responsible does not compromise the free market in the private sector. Social responsibility benefits firms by helping them earn a positive reputation, and improve public Image and customer relations.
References
Ali, H. Y., Danish, R. Q., & Asrar‐ul‐Haq, M. (2019). How corporate social responsibility boosts firm financial performance: The mediating role of Corporate Image and customer satisfaction. Corporate Social Responsibility and Environmental Management, 27(1), 166–177. https://doi.org/10.1002/csr.1781
Carroll, A.B. and Brown, J.A. (2018), “Corporate Social Responsibility: A Review of Current Concepts, Research, and Issues”, Corporate Social Responsibility (Business and Society 360, Vol. 2), Emerald Publishing Limited, Bingley, pp. 39-69. https://doi.org/10.1108/S2514-175920180000002002
Collier, E. (2022, June 13). Corporate Social Responsibility For Your Business. The Hub | High Speed Training. Retrieved April 4, 2023, from https://www.highspeedtraining.co.uk/hub/importance-of-corporate-social-responsibility/
Darwin, E. N., Alias, S. N., Omar, Z., & Mohd Anuar, M. A. (2022). Factors influencing managers’ CSR decisions: A research framework. International Journal of Academic Research in Business and Social Sciences, 12(1). https://doi.org/10.6007/ijarbss/v12-i1/11595
Friedman, M. (1970) “The Social Responsibility of Business is to Increase its Profits’ in The New York Times Magazine, September 13, 1970.
Klein, N. (2000). No Logo: Taking Aim at the Brand Bullies. Knopf Canada.
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