Corporate Social Responsibility - Advantages And Disadvantages For Corporations -Assessment Answer

Corporate Social Responsibility Assignment

Assignment Task

Discuss the importance of Corporate Social Responsibility (CSR) and elaborate on its possible advantages and disadvantages for corporations.

Introduction

Corporate Social Responsibility (CSR) refers to the various methods, strategies and approaches corporations or firms use to make sure they conduct their business in a manner that ethical, environment and society friendly and benefits the community in the form of development(Sharma, Sharma & Devi 2011).). The current business world calls for companies to meet the needs and demands of the population in a sustainable manner. CSR gives companies an opportunity to reflect on how their ways and operations are affecting the community and society. Therefore, it is critical for organization to use sustainable principles in their daily operations. CSR gives these companies an opportunity to give back to the society in which they operate. CSR practices are not mandatory in most regions; it is an extra good thing that a company can do to improve communities

CSR is important for many corporations or firms whether profit or not-profit. CSR improves the public image of companies. Corporations that demonstrated their ability and commitment to causes that benefit the community will probably be perceived as more philanthropic compared to those that do not (Campbell, 2007). When customers are aware of the CSR programs being offered by a company, they are likely to be more associated with that particular company. The company will win favour among the people that is good for business because of the warm operating environment and relationship between the company and its consumers

CSR is also likely to boost employee engagement. With proper employee engagement and commitment, a company will be able to record high performance among the employees and associated high productivity as well. Most employees would prefer to work in a company that has a good public image and one that is constantly receiving positive comments and associations on the media. With employees engaged and happy chance of having positive outcomes is very likely thus the success of that particular corporation (Hansen et al, 2011). When corporations demonstrated their dedication and commitment to improving the environment and the community, such corporations will attract and retain the best employees. Such employees will not only stay longer in the company but will also be more committed to their work and productive

Implementing CSR is also good for attracting and retaining investors. People making huge investments into large companies and corporations want to be assured that their money is being used properly. This means that the companies should have a well-designed business plan and budget. In addition, the company must demonstrate a strong focus on corporate social responsibility and commitment to the community. Investors are more likely to be attracted to a firm that supports communities and dedicates itself to helping improve the lives of its employees and consumers. Most investors want to associate themselves with companies that are dedicated to causes that change the lives of people in a positive manner.

A critical benefit of CSR initiatives is the fact that they often build a positive working environment for employees. The moment employees and company management feel that they are working for a corporation that has a true conscience and that values people, they would feel more enthusiastic and engage more in their duties. Such employees can build a great community with high levels of cooperation and teamwork (Hansen et al, 2011). All this brings employees together leading to happier and more productive employees.

Despite all these benefits companies gain from implementing corporate social responsibility initiatives, there are some disadvantages associated with corporate social responsibility programs. According to critics, CSR goes against the usual objective of business that is to make profits. According to these critics, implementation of a CSR strategy may compromise the main business objectives (Ihlen, Barlett & May, 2011). The primary the aim of any business is to make profits and develop. By developing and implementing a CSR strategy, a company shifts from this objective and focuses on bettering communities rather than making profits and expanding to new emerging markets. Many people argue that businesses, companies and corporations should always focus on profit taking and leave social and environmental issues to governments and non-profit organizations.

The cost of implementing the CSR initiatives is one of the greatest arguments presents against adoption of the CSR policies (Kitzmueller & Shimshack, 2012). Any CSR program for instance programs to conserve the environment often require much financial inputs. Such ventures often require expensive equipment and increased personnel resulting to more costs for the company. However, for large corporations this limitation is often minimized because they often include the CSR associated costs in their budgets. The effects of the costs associated with implementing a CSR policy will be felt by the consumer in the form of increased prices of products and services as companies seek to regain a balance. Top companies in the world spend lots of money running CSR programs. Therefore, many components of the corporation could be hit by these expenses

Some CSR programs may shutter shareholder expectations. Most companies especially the pubic owned ones have to satisfy shareholder expectations because of the fact that these shareholders have invested in the company. This means that when implementing a CSR program the company has to consider the social requirement of the CSR program versus the interests of the investor. Some shareholders may not approve the CSR implementation because they think their investments may be at risk. This may cause some shareholders to pull out their investments or reduce their investments in the company. Therefore, CSR can make a company lose money in terms of investment reductions when shareholders reduce their inputs or retract completely out of the deal.

Conclusion

Despite the disadvantages of CSR, most companies today opt to include CSR in their overall business strategy. Most people today are becoming more conscious about their environments. As such, CSR has emerged as an important concept in the business world because of its ability to generate competitive advantage for companies that adopt it in the business market. Instead of arguing against CSR, most people today are debating about the various forms of CSR that can be adopted by corporations.