Corporate Social Responsibility (CSR): Reason and advantages

So, the question arises as to why companies follow corporate social responsibility? I will state a few points regarding not only “Why” companies do so but also how this move proves to be advantageous to them.

Why:

The simple answer to why organizations/companies do so in one word is “Relation”. Every organization/company thrives for forming long term relations to their customers and by giving back to the society they tend to form strong bond with their customers.

Advantages: 

There are number of advantages for the organization. Following are the major advantages arising out of CSR:

• Easy access to capital: Organizations which work voluntarily towards the benefit of the society creates good reputation in the investor’s world too. Investors have a security as their money is being used in the right direction. Transparency of activities which is often an issue  between investors and companies, up to a large extent gets resolved due to CSR  activities. Moreover, investors may also like to invest into a company which prioritize ethics  above all. (Baker, 2018)
•  Advantageous for the consumers/society: As the companies are doing activities for the  benefit of the consumers and the society it is pretty evident that consumers are the beneficiaries (as they are receiving benefits) . For an instance Kellogg company founded in 1906 considered providing quality products to its consumers as their social responsibility, the company claimed that, “Social responsibility is a way of living at Kelloggs”. Apart from quality products Kelloggs CSR activities include: Protecting the environment, selling nutritious products and advocating healthy life style.(Paetzold, 2010)
• It promotes goodwill: The modern-day strategy of businesses: its not just profit, Goodwill runs the business. I must say that it is a great method to understand business on a deeper level, because now the companies are making efforts on intangible aspects of business such as forming relations with you, your needs/wants, benefit of society, and more so importantly collective growth. As an organization/company considers the responsibility towards people they create an image of a “caring organization”, which will instantly make you form a connection with the company and in turn it will lead to strengthening of their goodwill. (Muir, 2015)
• Profit aspect: I do believe that the companies performing CSR are tend to make more loyal customers then it's competitors. Though it is not done with the intention of making profits but the above-mentioned factors do come down and leads to higher profits as well as competitive advantage. (Paetzold, 2010)
• Inspiring competitors: As some companies take up the initiative voluntarily to serve back the society and when they prosper in doing so, it helps in inspiring the competitors to do the same. Hence, it motivates the other companies in the industry to follow the ethical path. (Paetzold, 2010).
• Thus, these were few of many advantages which I think act as crucial factors why organizations follow CSR. These were my thoughts over advantages of CSR. You may also have a look at the video posted below to get more insights on advantages of CSR. Let me know in the comments whether or not you agree with me? And what other points according to you could contribute to a successful CSR initiative?

 Refrences:

Baker,C.R. (2018). Corporate Social Responsibility (CSR):Practices, Issues and Global Perspectives.  New York: Nova Science Publishers. 

 Muir, S. (2015, July 24). Cube group. Retrieved from Cube group.com: https://cubegroup.com.au

 Paetzold, K. (2010). Corporate Social Responsibility (CSR): an International Marketing Approach.   Diplomica Verlag.

          

    Image source:

    https://maxpeoplehr.com/spread-love-corporate-social-responsibility

                     Video source:

                  https://www.youtube.com/watch?v=YEKyN-4tWsI