The social responsibility of business can be described or explained as the way companies, through their activities, maximize shareholder value, that is, by acting in a manner that benefits society, not just the bottom line. Being socially responsible for a business or a company can bring added advantages that portray a good company’s image and thus build the company’s brand in one way or another. Incorporating socially responsible programs into a business or a company, employee morale in the workplace tends to be boosted. As a result, the level of productivity will a tremendous percentage increase. Productivity in a business has a significant impact in terms of the profits gained after successful sales.
Specific characteristics qualify a company or business as socially responsible. Socially responsible businesses and companies have greatly improved in establishing communication rapport between employees and employers. This is in terms of improving ethical standards and behaviors. Employers in such business organizations handle their employees with high, maintained standards for ethical behavior while communicating. Socially responsible business organizations ensure or instead appreciate the work of their employees. For this reason, the employees feel recognized for their input and conclude that what they contribute to that business is of great essence. Through involvement in community activities, for example, acting according to the set community policies again, the companies act socially responsible (Carroll, 2021).
Socially responsible businesses enable community members’ and families’ well-being through compensations, an extension of company benefits, policy implementations, and practices (Islam et al., 2021). Such businesses take a human toll on all business decisions through their practices. Through actions of appreciating the community individuals that, in one way or another, contribute to the success of a business organization, businesses in this perspective are characterized as socially responsible.
Milton Friedman, a business economist, stated that a business’s overall social responsibility is to increase profits (Dmytriyev et al., 2021). Through his arguments, shareholders are the most important characters of a particular business, and there is a need for an organization to return value to the shareholders. Friedman had a strong belief that a company, through its actions, should focus its attention on the creation of value for its subsequent shareholders. Shareholders valued by their respective organizations would generate sound decisions on upholding their social values from their points of view.
Milton Friedman, through his arguments, incorporated socially responsible techniques. For instance, a company participating in matters that lead to the conservation of the environment or banking on measures that reduce climate change, the company, in turn, will not only attract new customers but as well maintain the old customers. Friedman argued that an individual could afford to pay for products or services of that particular company having in mind that some of the company profits gained will support areas of more concern or benefit in their surroundings. Friedman claimed that governments are supposed to be champions of social responsibilities in business sectors. Businesses have the tremendous potential to serve citizens in many dimensions. Friedman used an example of businesses acting toward environmental sustainability and actions towards improving equity and social justice. These actions are essential to the communities and bring more benefits, leading to enormous profits.
Corporate social responsibility (CSR) can be described as a business model that enables a business organization or a company to act in a way that promotes social accountability that adds value to the public and the shareholders. It is the idea that businesses should play positive roles in the communities. Through their actions, they take into consideration the social impacts and the social impacts that decisions made by such business organizations can bring. The primary social responsibilities a business has to promote include ethical considerations in a business setting, philanthropic considerations, economic responsibilities, and the actions that promote environmental responsibility, conservation, and sustainability of environmental resources (Islam et al., 2021).
Having mentioned elements of corporate social responsibility, there are diverse ways business organizations can incorporate them. Businesses must identify one area they can major on and showcase their abilities to improve. For example, a business can identify wildlife conservation as one of the areas they have identified to showcase their social responsibility. The business should bank on all actions that enhance wildlife conservation by incorporating economic funding, offering educational services through planned field days, and educating locals on the importance of conserving wildlife and the need for wildlife for future generations. Through the wildlife ministry, business organizations and companies can jointly implement policies promoting wildlife conservation.
Corporate social responsibility is not only a way to impact the societies we live in by creating healthier living environments, but, again, corporate social responsibility is a tool for business success. As a strategy, CSR creates an important ethical stand in which individuals are responsible for fulfilling public duty (Carroll, 2020). Businesses have to create benefits for society. In this perspective, the right balance between overall economic growth, the general well-being of the community (Society), and the environment people live in. The advantages of Corporate Social Responsibility are discussed below in detail.
Corporate social responsibility’s most expected positive impact is that it promotes positive relationships; as the business organization builds trust through social responsibility, it again creates a sense of community among the company’s consumers. Even though the consumers are not directly engaged in a company or business through its CSR actions, they, in one way or another, get proud of the business. Implementing corporate social responsibility actions attracts and retains employees and consumers. As a result, they are both engaged in successful or productive actions of a company or a business.
Corporate social responsibility builds public trust through its actions. Study sources reveal that 88% of company consumers that incorporate social responsibility tend to remain loyal customers (Maon et al., 2021). Even if the prices of certain products get higher, they tend to remain due to other added advantages they gain from that business or company. Society helping that is through monetary donations and voluntary activities, the locals. Specifically, the consumers enhance their trust in respective companies with CSR actions. Through trust build-up, the company’s popularity is greatly enhanced. This concludes that Corporate social responsibility builds a good reputation for a particular company or business.
One of the most expected positive impacts of CSR is the profit maximization of a company. As initially discussed, CSR actions tend to ensure that the customers become loyal to such companies; company trust and loyalty, a company, tend to attract new customers and maintain the old ones. According to CSR statistics, about 55% of customers are willing to pay more for goods and services from socially responsible companies (Hu et al., 2020). This reveals that companies enhancing corporate socially responsible programs tend to maximize their profits and, thus, the overall success of such businesses and companies.
CSR encourages growth in terms of professionalism and an individual perspective. Companies with socially responsible corporate cultures tend to promote volunteerism to their company employees, thus encouraging them to donate non-profit actions to the company. For this reason, the employees become individually and philanthropically encouraged if their business organizations encourage that culture. As a result, employees will realize that their employer is committed to battering their local and global communities. Employees will feel more encouraged and increase their efforts in enhancing company productivity. As a result of corporate social responsibility, the employees tend to grow personally and in terms of professionalism.
In the current business world, corporate social responsibility is appreciated by business organizations and companies in many dimensions. The idea or the concept of corporate social responsibility programs has its roots in corporate philanthropists. For instance, Andrew Carnegie challenged wealthy people about their contributions to social functions following his perspective on the Gospel of wealth. Andrew Carnegie incorporated the stewardship principle that required businesses, companies, and wealthy individuals from society to project themselves as stewards or, in other words, caretakers of their acquired property. The economist (Andrew Carnegie) maintained his idea that the wealthy hold their money in the name of trust for the rest of society and use it for various purposes that society deems legitimate. Carnegie proposed charity principles and stewardships that attracted interest from both practitioners and scientists, especially in the 18th and 19th centuries.
Corporate social responsibility ideas can be traced back to 1914 when a well-known banker named Fredrick Golf contributed to the foundation of the Cleveland Foundation, which was the trustee of the Cleveland Trust Company. The significance of the foundations was to empower the community through the acceptance of donations and gifts, especially from multiple donors rather than one fortune, who could assess needs in a collective manner and result respond to the community. The foundation was the first foundation that was community-based.
The contributions of Howard Bowen can retrace the existence of Corporate Social Responsibility. Howard is an American economist and the president of Grinnell College who articulated CSR actions and ideas and is named the “father of Corporate Social Responsibility .”Through his book, published in 1953, he contributed to the connection of the responsibility of business corporations into society. In his book, he powerfully advocated for ethics in the business field. Howard Bowen, again through his book, coined for responsiveness actions to the societal stakeholders. Howard, through his Social Responsibilities of the Businessman, argued that business organizations and companies must constructively incorporate the actions and activities that serve the needs of society (Tsilikis, 2020). This statement in today’s business world has ensured that business organizations contribute more to societal functions and needs than solely their products and services for sale. In 1970, Corporate Social Responsibility began to take hold, particularly in the United States, after the concept of the social contract between business organizations and societies was declared. The key responsibilities outlined in the social contract declaration included the provision of jobs and economic well-being through proper business running, business running fairly and equitably concerning the employees and the employers, and finally, engaging in the improvement of the community conditions and the environment a business is operating on. The mentioned responsibilities are applicable in today’s business background.
The origin of Corporate Social Responsibility in business can be traced to professor Sandra L. Holmes’s results after her survey conducted on CSR to find out how decisions on which causes to support were made. Her results concluded from the Executive perceptions of corporate social responsibility described the government influence, the overall severity of social need, utilization of a business corporation’s ability to help solve a particular need, and executive interest. Again, from the approaches by Professor Archie B. Carroll in The Evolution of the Corporate Social Performance Model, social responsiveness and ethics in business are brought together into one field of study and performance (ElAlfy et al., 2020). From the model, CSR is comprehended as a 3-pronged approach that is the adoption of ethics by companies, creating and executing formal processes, and developing policies for managing specific situations or issues.
Corporate Social Responsibility plays an essential role in the current business world, and corporate citizenship professionals are inspired to align their work with the business organizations for maximization impact. As new economists and professionals venture into the business field each day, it is of great essence for the new professionals to review the evolution of Corporate Social Responsibility and the influence of the early contributors of corporate social responsibility.
The most significant limitation of CSR in business is the impact on the public image. Once a business is in public perception, it is more evidence that it will be scrutinized over everything it does. An organization that upholds its credibility actions may be subject to criticism over small actions. As much as there are more results from incorporating Corporate Social Responsibility programs, successful implementation of such programs or strategies is challenging and complex for business organizations and companies (Mišura et al., 2018). Getting everyone on board is one of the most significant dilemmas. Studies reveal that there are always gaps between leadership goals and employee enthusiasm. Often in business organizations and companies, there are great disconnections between the leaders on board and the employees in terms of achieving the goals of corporate social responsibilities. For a company or a business organization to achieve the set missions of CSR, the employees must develop strong engagement in achieving the goals. Implementing CSR strategies may be challenging with diverted or disconnected unison between the employees and the employer.
Many businesses lack clear metrics to prove the value of CSR programs and strategies. Businesses lacking metrics on evaluating the potential advantages of CSR programs to pursue their stakeholders about the strategies and the programs makes it hard to attain CSR. Implementing Corporate Social Responsibility programs requires critical and complex evaluations available by the business organizations—maintaining the CSR programs requires well-defined procedures that are well comprehended by the public and the stakeholders.
Businesses and companies again lack sufficient resources for the implementation of CSR strategies. As initially before, CSR requires resources that are in terms of human resources, capital, informed knowledge, and expert knowledge. Many businesses have revealed these elements to be less available, thus acting as barriers to promoting CSR (Latapi et al., 2019). In human capital, the implementation of CSR strategies is not generally assigned to central management. Thus, financial and human capital are not assigned to the expected level.
The company’s and businesses’ implementation of Corporate Social Responsibility requires strategic visions. As a result, many business organizations and companies lack total commitment from the management, and due to such challenges, it is challenging to incorporate CSR programs. To express commitment towards achieving CSR, businesses must incorporate missions, visions, objectives, and goals in aiming for the success of their activities. Such elements that promote business commitments are less available among the major businesses and companies. There have been proven that many companies, for instance, shipping companies, have failed to integrate CSR strategies into their visions and missions. Instead, they have addressed the issue at operational levels, only making incorporating the CSR programs challenging.
Additionally, the company and organization’s input in terms of business perspective for the community is much less than the output businesses receive. That same input, if incorporated by the organizations for earning purposes, will ultimately make huge profits. The public (Community) consistently fails to recognize the good deeds of a particular company made for the well-being of society. As a result, it fails the m by being denied appreciation and acknowledgment in the most usual way after the duty.
In conclusion, businesses need to focus their attention on implementing social responsibility programs as a way of promoting societal advantages and as a way of growing their brands. As discussed, CSRs aim to maximize the shareholders’ profits and to serve and protect the interests of other members (consumers, community members, and workers) that contribute to the business’s success. Every business organization and company also desires to look good in the eyes of a particular community. Companies should, therefore, champion activities that enhance Corporate Social Responsibility, keeping in mind the possible advantages and the dilemmas associated with CSR.
REFERENCES
Carroll, A. B. (2021). Corporate social responsibility: Perspectives on the CSR construct’s development and future. Business & Society, 60(6), 1258-1278.
Dmytriyev, S. D., Freeman, R. E., & Hörisch, J. (2021). The relationship between stakeholder theory and corporate social responsibility: Differences, similarities, and implications for social issues in management. Journal of Management Studies, 58(6), 1441-1470.
ElAlfy, A., Palaschuk, N., El-Bassiouny, D., Wilson, J., & Weber, O. (2020). Scoping the evolution of corporate social responsibility (CSR) research in the sustainable development goals (SDGs) era. Sustainability, 12(14), 5544.
Hu, B., Zhang, T., & Yan, S. (2020). How corporate social responsibility influences business model innovation: The mediating role of organizational legitimacy. Sustainability, 12(7), 2667.
Islam, T., Islam, R., Pitafi, A. H., Xiaobei, L., Rehmani, M., Irfan, M., & Mubarak, M. S. (2021). The impact of corporate social responsibility on customer loyalty: The mediating role of corporate reputation, customer satisfaction, and trust. Sustainable Production and Consumption, pp. 25, 123–135.
Latapí Agudelo, M. A., Jóhannsdóttir, L., & Davídsdóttir, B. (2019). A literature review of the history and evolution of corporate social responsibility. International Journal of Corporate Social Responsibility, 4(1), 1-23.
Mišura, M., Cerović, L., & Buterin, V. (2018). Relationship between corporate social responsibility and business success: Case of the global tobacco industry. Management: Journal of Contemporary Management Issues, 23(1), 157-171.
Maon, F., Swaen, V., & De Roeck, K. (2021). Corporate branding and corporate social responsibility: Toward a multi-stakeholder interpretive perspective. Journal of Business Research, 126, 64-77.
Tsilikis, C. (2020). Milestones in forging the contemporary perception of CSR. An overview. Academicus. International Scientific Journal, p. 22.
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