Assignment 2
EIB 20103
ME40
Prepared for: Prof Dato' Dr Kamarudin Mohd Nor
What is corporate social responsibility and
why do corporations have social responsibility?
Corporate social
responsibility (CSR) also called corporate conscience, corporate citizenship,
social performance, or sustainable responsible business] is a form of corporate
self-regulation integrated into a business model. CSR policy functions as a
built-in, self-regulating mechanism whereby a business monitors and ensures its
active compliance within the spirit of the law, ethical standards, and
international norms.
Corporate social
responsibility has come a long way since 1970, when economist Milton Friedman
called its advocates “unwitting puppets of the intellectual forces that have
been undermining the basis of a free society for three decades.” In fact,
corporate social responsibility (CSR) has a completely different meaning in the
21st century, when more and more firms anticipate and take responsibility for
the impact of their operations on communities and the natural environment. Study
after study has shown that corporate social responsibility not only provide
sustainable business models, but also have improved marketing, employee
recruitment, employee satisfaction, legal treatment, customer loyalty, brand
perception, and richer partnerships. The top six reasons corporations have
social responsibility:
1. Building a
Positive Workplace Environment
Five years ago,
it was considered good if a company simply did not harm the environment.
However, times have changed, and now employees demand that their company do more
than simply not be bad. They need to do well, too. It was the greatest benefits
of promoting social responsibility in the workplace is the positive environment
you build for your employees. When employees and management feel they are
working for a company that has a true conscience, they will likely be more
enthusiastic and engaged in their jobs. This can build a sense of community and
teamwork which brings everyone together and leads to happier, more productive
employees.
2. Consumers
expect better business practices
Just under a
year ago, a study was published showing that the average consumer will drive en
extra 11 minutes to buy a product that supported a cause. Since then, more data
has been released supporting the fact that consumers will adjust buying behaviour
from average companies to socially responsible companies. Most of the consumers
think companies should try to achieve their business goals while improving
society and the environment and consumers think companies should support
charities and nonprofits with financial donations. The important consideration
is that consumers know that the corporation is making donations out of its own
pocketbook, not asking for donations by its consumers. In fact, 35% of
consumers dislike being asked to donate money at the checkout counter.
3. Showing a
True Commitment
The most
successful corporate social responsibility programs integrate these two types
of CSR together to show a true commitment to a cause. For example, a company
that uses sustainable materials in their products, donates financial resources
to environmental causes, and allows employees to take paid time off for
volunteering at environmental charities would be showing a true commitment to
the environment that goes beyond any single CSR initiative.
4. Public
Relations Benefits
Public relations
are a potent tool for shaping consumer perception and building a company’s
image. Corporations that actively promote their social responsibility
activities often take steps to publicize these efforts through the media.
Getting the word out about corporate donations, employee volunteer programs, or
other CSR initiatives is a powerful branding tool that can build publicity for
you in both online and print media.
5. Brand
differentiation
In the past,
brand differentiation was one of the primary reasons companies embraced CSR.
Companies such as Timberland were able to find their voice and incorporate the
company’s values into their business model. However, as CSR has become more
commonplace, using it to differentiate your brand is getting harder to do. For
example, the “Cola Wars” is one of the longest running rivalries in business.
Coke and Pepsi are constantly looking to grab as much market share as they can
from each other. Yet they are both adopting similar, although slightly
different, approaches to CSR. Both Pepsi and Coke are pursuing strategies of
zero net water usage. Both companies offer water bottles made from sustainable
packaging as well. In the end, although neither company is necessarily going to
see strong differentiation benefits, I see the diminishing returns on brand
differentiation as a sign that CSR is taking hold and is not just a fad.
6. Government
Relations
Corporations
that place an emphasis on corporate social responsibility typically have an
easier experience when dealing with politicians and government regulators. In
contrast, businesses that present a reckless disregard for social
responsibility tend to find themselves fending off various inquiries and
probes, often brought on at the insistence of public service organizations. The
more positive the public perception is that a corporation takes social
responsibility seriously the less likely it is that activist groups will launch
public campaigns and demand government inquiries against it.
.jpg)
+banner+EN2_0.jpg)
