Corporate Social Responsibility
Corporate social responsibility is a voluntary activity that companies undertake to operate in a social and economic environment in a sustainable manner. For example, the government in Canada recognizes that the corporate companies of Canada that operate within the country and those which operate outside the country enhances their chances of business growth for the Canadian government and to the countries in which they are operating. In order for corporate companies to realize the growth of their organization, management is crucial in mitigating social and environmental risk factors (Coombs and Holladay, 2012). Canadian firms take advantage of the global business opportunities and invest there by giving them benefits and at the same time improving the local economy and communities. According to Zu (2009), corporate companies also have a responsibility to contribute in improving the economy of the world’s problems. This may be through poverty reduction, healthy environment and absorption of externalities. A lot of literature has found that a lot of profits are made when the corporate companies implement corporate social responsibilities. This is because it improves their reputation; it also increases efficiency in production programs. The pressure from consumers and even nonprofit groups have always made corporations implement corporate social responsibilities (Crowther and Aras, 2008).
Richardson (2002) has also alluded to the fact that social corporate responsibility has some neutral effect on financial performance. Firms that operate in goods that are consumed by human beings, should be sensitive to consumer opinion in order to increases their profit, this can be done by improving their image. It is realized that good image by a corporation can help in increasing the demands while reducing the cost. According to Mullerat and Brennan (2011) by participating in environmental programs, they increase their profits in that the consumers will view them as more appealing compared to their competitors hence reducing the competition. Most corporate companies get more profits when they have competitors. This is because they create a social environment aimed at benefitting the consumers who in turn depend on them by buying their goods. Therefore, many people see improving corporate performance as having to contribute effectively to the environment. Corporations also have responsibilities to ensure that there is sustainability; this is by having effective resource use, waste reduction and recycling (Hawkins, 2006). In addition, they can also have sustainable energy and offset use of energy that emits carbon.
Corporate social responsibility can also improve profits by donating to nonprofit organizations who in turn advertise them as the source of donation thereby improving their image. Most corporate can improve their performance by contributing to social welfare of the public (Grünewälder, 2008). By doing this they are likely to increase their existing customer base. As a result, they achieve welfare goals through participating in social responsibility. Companies can also improve the organization and increase their profits by having good relations with their employees. They can do this by creating good working conditions and high quality of deliverance (In Idowu, 2009). They should know how to deal with risk management by having knowledge over emerging issues and use their positions in leadership to gain competitive advantage of the opportunities. Branding of corporate social responsibility can help them get a lot of profit from consumers. For any business to have a long term survival, learning new innovations is key. In this regard, corporations can improve their standards of operation by having strong innovators who come with new ideas to suit the current consumer need (Cramer and Bergmans, 2003).
Reference
Coombs, W. T., and Holladay, S. J. (2012). Managing corporate social responsibility: A communication approach. Chichester: Wiley-Blackwell.
Cramer, J., and Bergmans, F. (2003). Learning about corporate social responsibility: The Dutch experience. Amsterdam: IOS Press.
Crowther, D., and Aras, G. (2008). Corporate social responsibility. Frederiksberg, Denmark: BookBoon.
Grünewälder, A. (2008). Corporate social responsibility: Implementation in German companies. München: GRIN Verlag GmbH
Hawkins, D. E. (2006). Corporate social responsibility: Balancing tomorrow’s sustainability and today’s profitability. New York: Palgrave Macmillan.
In Idowu, S. O. (2009). Professionals Perspectives of Corporate Social Responsibility.
Mullerat, R., and Brennan, D. (2011). Corporate social responsibility: The corporate governance of the 21st century. Alphen aan den Rijn: Kluwer Law International.
Richardson, B. J. (2002). Environmental regulation through financial organisations: Comparative perspectives on the industrial nations. The Hague: Kluwer Law International.
Zu, L. (2009). Corporate social responsibility, corporate restructuring and firm’s performance: Empirical evidence from Chinese enterprises. Berlin: Springer.