The concept of corporate social responsibility remains a core factor in businesses and their growth. Corporate responsibility focuses on the moral and ethical issues that have significant influence to the organization and the society at large. Ethical responsibility calls for a responsive and social contribution of a business to the society. Corporate responsibilities take different shapes with each focusing on a particular issue of business that in the end results in prosperity in business. Corporate responsibility holds many opportunities towards the creation of a good image and expanding the services of companies in areas of operation. Apart from giving back to the society as an ethical act, the concept markets firms increase their reputation and subsequent performance thereby enhancing their competitive nature.
Corporate responsibility emanates from the need to remain responsible owing to the social and environmental consequences they pose to the individuals and the environment surrounding a business. The government tasks firms in the process of manufacturing and offering services to remain responsible by sharing their profits with the stakeholders in line with responsible living. Corporate social responsibility advocates that firms operating in different environments have a responsibility which goes beyond profit making over to the society. Therefore, the social responsibility is carried out for the sole reason of remaining ethically responsible for the actions in the environment as it affects other stakeholders.
Consequently, corporate social responsibility bears a significant benefit to a firm’s reputation and performance. Vanhamme and Grobben (2009), argue that in the business world, the revenue stream and investment on the return are the primary drivers for companies which determine their levels of performance. Corporate social responsibility is a core contributor to the profitability of businesses as it increases the brand presence of companies. The concept acts as a marketing tool for organizations since individuals whose community is being impacted get to know the business and in the long run become potential clients or referrals to business. Consequently, it increases the performance of a business and its reputation as a responsible firm.
On the other hand, the concept of corporate responsibility, through empowering workers and involving them in society activities raises the chances of a company’s ability to retain and attract a high caliber workforce. Organizations that include and affect their employees in their corporate social responsibilities, directly and indirectly, offer a work-life balance, flexibility in the workplace, and proper working conditions (Vanhamme & Grobben, 2009). For instance, opening of schools by a company and giving a discounted price for employees’ children serves as a social responsibility. In this case, it attracts and retains workers due to motivation which translates into increased performance from the satisfied customers.
Moreover, the concept leads to a stronger relationship between and organization and its clients. A superior social responsibility framework is key to building and maintaining trust and improved engaged between customers and an organization (Vanhamme & Grobben, 2009). For instance, involving communities in tree planting activities by firms and advocating for the importance of the same increases their engagement leading to a healthy relationship. Clients finding such organizations as friendly would most probably desire to do business with them and trust their products and services. The action leads to a strong working relationship with existing and new clients since it reaches out to the community level and impacts value into their lives. Eventually, it leads to a good reputation and enhanced performance by organizations.
Besides, the concept can be used as a turn-around strategy at correcting ethical issues in firms for the better. For instance, firms that have previously been involved in child labor employment and lack of proper workplace can use the initiative to improve their name and increase performance. In meeting their targets, such firms can build schools and advocate against child labor by sponsoring children to schools. In this respect, the strategy solves the puzzle in the organization by changing the perception of the firm in the society and rather lifting the education levels of children (Du, Bhattacharya & Sen, 2010). Consequently, such a practice would upgrade the reputation of a corporate and increase its performance.
CSR activities boost business reputation for firms that act positively according to set standards. Governments, through policies, mandate firms to remain ethical and socially responsible to the environment. Organizations that constantly carry out their respective social activities increase their chances of gaining a good image not only with a government in areas of operation but also the community that experiences the same. Consequently, organizations develop a good rating with a government as well as the community which leads to increased business and market presence.
Notably, the concept of corporate responsibility acts as a public relation tool that increases visibility and knowledge of the clients on business. In the process of discharging corporate social activities, the individuals whose community is being impacted gains experience on the responsible firm undertaking an initiative (Unerman, 2008). A series of the actions can be used in advertisements of a firm both in the online and traditional media. In so doing, the marketing effort identifies with a particular society thereby appealing positively to the business thus drive more consumers to a firm’s products and services.
As a result of CSR, companies manage to reduce costs of operation through maintaining a positive image to employees and the communities in their environment. It is evident that companies failing to carry out such noble activities fail to appeal to their workers and the society (Unerman, 2008). Efforts used in different social responsibilities yield to cheaper costs of operation. The concept leads to a lower employee turnover rate thereby limiting costs incurred during recruitment and selection. Besides, CSR activities act as marketing tools which increase the number of customers to a business role (Cahan, Chen, Chen & Nguyen, 2014). In this respect, it limits the amount used in marketing efforts through the traditional media in pursuit of increased brand awareness. Consequently, CSR boosts a firm’s reputation and increases the performance in the market through association with the community.
CSR presents important opportunities for businesses seeking for opportunities and business contacts. Participation in social events in the community increases contact with the people and leaders therein who can have a positive effect on one’s business. For instance, a construction firm participating in providing help to victims of flood stands a high chance of winning a government contract related to the construction of the destroyed social facilities. Such cases provide opportunities for the firm’s to sale their services through assisting individuals and eventually gaining an excellent market rating and reputation. In any case, a firm fails to be selected for a contract; a lot of individuals at different levels get to know the brand name and might contact them for future business (Unerman, 2008). Therefore, taking part in similar activities repeatedly markets individuals thus raising the chances of securing opportunities in a business venture.
On the other hand, the actions increase the capability and probability of a firm seeking international expansion through the local actions. Acts of charity and responsible living improve a firm’s reputation and the rate at which it expands its services or products to overseas locations. Firm’s that are locally dominant and known for their positive contribution to the environment have a greater chance of being known by the outside work thereby widening their areas for expansion (Fatma, Rahman & Khan, 2015). As such, it is important for firms to get involved in such activities to not only gain a great standing within but also outside a nation.
Besides, companies operating in a local community gain a high chance of doing business with the local authorities. Participating in community service and social amenity construction places an organization close to authorities as the tasks involve them directly. In a way or the other, official in the jurisdiction must participate in the events either through approval or inspection of facilities (Fatma, Rahman & Khan, 2015). Consequently, in pulls the two parties together who through the strong relationship and repeated social engagement might win supply or product delivery business to the local authority needs. Here, the reputation of such a firm remains high whereas the business opportunities uplift the financial performance of a firm.
Apart from giving back to the society, the act of responsible giving aligns a firm according to the requirements and regulations in place for businesses by a government. For instance, governments mandate factories to participate in social responsibilities that promote the well-being of the environment. In this respect, firms engaging in CSR activities benefit from the double opportunity of meeting the government regulations to pollution and social offering by participating in cleaning activities that impact positively on the environment (Fatma, Rahman & Khan, 2015). In the long-run, companies find themselves meeting their marketing, regulation, reputation and image building needs in one single event.
Participating in social events and environmental improvement activities assists in developing environmental solutions through significant production changes. According to Fatma, Rahman, and Khan (2015), experiencing challenges gives individuals a chance to develop solutions. The statement justifies the need to participate in social responsibilities towards developing solutions to environmental and community problems. For example, a manufacturing plant which constantly pollutes the environment needs to take part in the CSR to address the effects of its actions such as water and air pollution. Consequently, such as firm would learn of the dangers and therefore extend the ethics to introduce the use of technology to lessen the rate of pollution as well as select the option of water treatment and recycling to resolve the pollution menace (Fatma, Rahman & Khan, 2015). In so doing, the practice initiates a positive reputation to a firm due to the changes considered as well as increases its performance financially and through the creation of superior products.
Good reputation comes from ethical deeds which improve performance and business engagement. The media is a powerful tool that has the potential to create or destroy a reputation. Acting in good faith through social responsibilities assists firms in remaining responsible to its environment and taking charge of its activities in a given environment. As a result, any focus by the media on such activities sets a pace for a good reputation that assists in the case of ethical presentations apart from playing a marketing role (Cahan, Chen, Chen & Nguyen, 2014).Therefore, businesses involving themselves with such acts improve their standing in the industry by generating a positive image not only to the local individuals but also the international community.
Brand differentiation in the market increases awareness which builds on the reputation and performance of a firm in a business environment. In the business world, several companies use names that might in a way look similar to others, where in the case of a negative image lead to confusion in identifying the real company responsible for a given mess. The reality calls for increased participation in social activities within communities to differentiate a brand by making it known to people role (Cahan, Chen, Chen & Nguyen, 2014). As a result, people would get used to the right brand hence develop the ability to differentiate a product in the market. Eventually, a firm manages to gain a considerable reputation and increased financial performance.
Corporate social responsibility gives organizations a great potential towards increasing their competence in the business world. The present population is growing in diverse means leading to the need for creative options of marketing and building brand image for increased performance. From the paper, it is evident that the activities contribute immensely towards growth in brand name and performance of a product or service. CSR assists in building innovation among firms that in turn bolsters its performance in organizations. Besides it plays a critical factor in saving costs since CSR activities act positively towards retention of employees and providing a sustainable pattern in development. Hence, firms need to use the opportunity to remain competitive by increasing their reputation, market rating, and the performance standards of companies.
References
Cahan, S. F., Chen, C., Chen, L., & Nguyen, N. (2014, August). The Business Press and Corporate Social Responsibility: Reputation, Cost of Capital, and Firm Value. In American Accounting Association Annual Meeting Session, Atlanta, GA (Vol. 5).
Du, S., Bhattacharya, C. B., & Sen, S. (2010). Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Reviews, 12(1), 8-19.
Fatma, M., Rahman, Z., & Khan, I. (2015). Building company reputation and brand equity through CSR: the mediating role of trust. International Journal of Bank Marketing, 33(6), 840-856.
Unerman, J. (2008). Strategic reputation risk management and corporate social responsibility reporting. Accounting, Auditing & Accountability Journal, 21(3), 362-364.
Vanhamme, J., & Grobben, B. (2009). “Too good to be true!”. The effectiveness of CSR history in countering negative publicity. Journal of Business Ethics, 85, 273-283
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