Corporate Social Responsibility or CSRs have become a very important part of the business landscape in todays day an age. CSRs are basically an ever ‘evolving business practice that incorporates sustainable development into a company’s business model’ (Schooley 2019). Basically they are processes that help an organisation be socially accountable to not only itself but the stakeholders and the general public. The presence of a good CSR ‘has a positive impact on the [the] social, economic and environmental factors’ (Schooley 2019) tied to the business.
According to Katie Schmidt who is the founder of Passion Lilie, a clothing brand priding themselves on being ‘ethical fashion’ ie. being an ethical business, a good ‘CSR can positively impact [a] business by improving [the] company[’s] image, building [the] band and motivating [an individual] as a business owner’ (Schooley 2019). This is because like in most cases public opinion is critical to an organisations success. If that particular organisation has a positive image in the public eye it can definitely help them to build a name and reputation with their customers which can be extremely beneficial in both the short and long term success of the business.
In this day and age an organisations reputation is more important that ever as ‘consumers, employees and stakeholders are beginning to prioritise CSR when choosing a brand or company’ (Schooley 2019) to invest in or support. On top of that these same individuals have begun to start ‘holding corporations accountable for effecting social change with their business beliefs, practices and profits’ (Schooley 2019). Failure to operate at an acceptable level will definitely lead to some form of negative repercussions for the organisation in question.
JeyBoyton who is the CEO of B Targeted Marketing Co. is of the opinion that ‘CSR is an opportunity for companies to demonstrate their good corporate citizenship..and protect the company from outsized risk by looking at the whole social and environmental sphere that surrounds the company’ (Schooley 2019). In essence used correctly CSR can help an organisation stand out from the crowd and protect it from any judgement or negative repercussions from the various parties involved in the companies operations.
The importance of a good CSR can be seen through the various levels of research and observations done over the years either in the form of reviewing an organisations success or simply by determining through surveys and questionnaires the importance that these CSRs are held at. One such research that back this up is the one done by Cone Communications who in a study determined that ‘more than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulations’ (Schooley 2019). On top of this ‘nearly 90% of the consumers surveyed said [that] they would purchase a product because a company supported an issue they care about’ (Schooley 2019) and up to ’75% will refuse to buy from a company if they learn it supports an issue contrary to their own belief’ (Schooley 2019).
Last but not least, according to Susan Cooney who is the head of global diversity, equity and inclusion at the company Symantec, an organisations ‘sustainability strategy is a big factor in where todays top talent chooses to work’ (Schooley 2019) due to the fact that the ‘next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue’ (Schooley 2019).
Sustainable Development Goals:
Sustainable Development Goals or SDGs basically are ‘new, universal set of goals, targets and indicators’ (Ford 2015) created by the United Nations (UN) that is expected to ‘frame their agendas and political polices over the next 15 years’ (Ford 2015). The SDGs are in theory a ‘blueprint to achieve a better and more sustainable future for all’ (United Nations). These SDGs were put in place to ‘address the global challenges [the world faces] including [ones] related to poverty, inequality, climate change, environmental degradation, peace and justice’ (United Nations).
SDGs are in theory an expansion of the MDGs or the millennium development goals which was an agreement between the different governments in 2001 due to the fact that this original agreement was due to expire at the end of 2015. The MDGs in itself were considered to be inadequate as it ‘failed to consider the root cause of poverty and overlooked gender inequality as well as the holistic nature of development’ as well as the fact that it ‘made no mention of human rights and did not specifically address economic development’ (Ford 2015).
SDGs consist of 17 different goals which are all interconnected with one another in the hopes that none of these goals are left behind as they are all deemed of equal importance. These goals consist of (1) no poverty, (2) zero hunger, (3) good health and wellbeing, (4) quality education, (5) gender equality, (6) clean water and sanitation, (7) affordable and clean energy, (8) decent work and economic growth, (9) industry, innovation, and infrastructure, (10) reduced inequalities, (11) sustainable cities and communities, (12) responsible consumption and production, (13) climate action, (14) life below water, (15) life on land, (16) peace, justice and strong institutions and (17) partnerships. The United Nation hopes that by 2030 all these goals will be achieved.
These goals were published in July 2014 after deliberation of an open working group made up of the representatives from 70 different countries. On top of this when creating these goals the UN conducted a series of ‘global conversations’ which ‘included 11 thematic and 83 national consultations, and door-to-door surveys’ as well as an online My World survey which asked people to ‘prioritise the areas they’d like to see addressed in the goals’ and all this was fed to the group who came up with these 17 SDGs.
The need for companies to assume social responsibility is a long-standing issue. There are two main points of opposition to corporate social responsibility: First, it is believed that an enterprise is a profit-oriented production and operation unit, and profit maximization is the eternal theme of its pursuit. It has no responsibility and obligation to complete the responsibility of the government or the work has to be done by society; second is that the corporate social responsibility will change the direction of capital utilization, resulting in increased costs and lower profits, weaken the competitiveness of the enterprise, dilute the main goals of the enterprise, thereby damaging the interests of shareholders, employees and customers. Therefore, enterprises cannot bear a lot of social responsibilities (Emmert, 2014). However, unlike this view, more scholars believe that it is necessary for enterprises to undertake corporate social responsibility (Robert Newbury, 2020).
A well-known Chinese economist believes that the fulfillment of corporate social responsibilities by large-scale enterprises is conducive to enhancing their competitiveness and financial performance. The research proves that the improvement of financial performance has a positive correlation with the fulfillment of corporate social responsibility. The implementation of corporate social responsibility helps companies reduce operating costs, because a good corporate image can not only save publicity and marketing costs, but also attract talent to save management costs and training costs (Jingwen Mi, 2018).
Walt Disney is a world-renowned cartoon entertainment company. It is their mission to bring happiness to people all over the world. Walt Disney Senior Executive Vice President and Finance Officer said: “2018 is a very meaningful year. Walt Disney manufactures products in an ethical manner by reducing its impact on the environment; Walt Disney is also in March 2019 Expand community charity services and commit to invest US $ 100 million over the next five years to encourage and support children ’s hospital patients and families around the world (DISNEY, 2019).”
Consumers attach great importance to the contribution of large enterprises to society, and companies can enhance their international reputation through corporate social responsibility. Walt Disney adheres to its obligations and promises to reduce its damage to the world while expanding its business. For example, Walt Disney completely eliminated disposable plastic straws and replaced 80% of the plastic products on hotels and cruise ships. Walt Disney has increased the importance of corporate social responsibility to build its own corporate image. A good corporate image and brand image can enhance consumers’ trust in the company and bring a large number of loyal customers (DISNEY, 2019).”
Brand image is the intangible wealth of an enterprise. Today’s competition is not limited to the competition of tangible products. The brand and image of an enterprise are also part of the competition (Gong Ke, 2011). Tmall is an online shopping company under Alibaba. November 11, 2018 is the tenth year of Tmall’s establishment. Traders from 200 countries and hundreds of millions of consumers all joined the Tmall offline carnival to celebrate. The transaction volume reached 213.5 billion yuan on the same day. Then, the executive director of Alibaba stated that what Alibaba values is not how much profit Tmall can bring to them, but that it can help society upgrade the business model while improving the life quality of people when creating a business platform (Soo, 2019).
For China, Alibaba has improved the quality of life of rural people. Chinese farmers are accelerating their integration into the Internet era, attracting many young people to return to rural development, benefiting rural people, and changing the world ’s view of China. For the whole world, Alibaba has driven the international market, established multiple electronic platforms to promote economic growth, helped developing and underdeveloped countries, especially helped young people integrate into global trade, and benefited people all over the world (Group, 2018).
Enterprises can obtain resources, capabilities and social capital in the process of assuming social responsibility. It’s brought many benefits to the enterprise, such as: customer loyalty, absorption and retention of excellent employees, establishment of corporate image, social network and trust, and reduction of transaction costs,reduce resource consumption, improve innovation capabilities, etc (Low, 2016). According to the research of Brown and Dacin (1997), corporate social responsibility behaviour affects consumers’ perception of product quality. Corporate social responsibility associations can indirectly influence consumer evaluation of products by influencing company evaluations. Corporate social responsibility associations also have an important impact on new products (Guido Berens, 2005).
Employees are the supporting force for enterprise development. Safeguarding the legitimate rights and interests of employees is one of the main contents of corporate social responsibility. Empirical research by Peterson (2004) shows that there is a significant relationship between corporate social responsibility behavior and employees. Corporate social responsibility practices, such as fair pay, clean and safe working environment, training opportunities, child care facilities, flexible working hours and work sharing, can both increase employee morale and productivity, and reduce absenteeism and personnel flow (PATRICK AGESA MUGESANI, 2016). In addition, Fulmer and Ballou (2003) used “Fortune” magazine’s “100 Best Work Companies in America” as an example to analyze the relationship between employees’ attitudes to workplace quality and corporate performance. Have a positive attitude towards the quality of the workplace, which can enhance the financial performance of the company (Goenner).
The corporate’s internal social responsibility can obtain the accumulation of internal social capital. The reason is that the company provides employees with a safe and comfortable working environment, improves the quality of employees through training, signs fair labor contracts with employees, and provides employees with minimum wages and compensations. It is the specific performance of the company to fulfill its internal social responsibilities. Corporate internal social capital is a useful resource, it can not only enhance the trust within the organization, mobilize the initiative, enthusiasm and creativity of employees, reduce and avoid employee opportunistic behavior and arbitrary behavior, save the internal management costs of the enterprise, increase the enterprise profit (Flávia Cavazotte, 2016).
When an enterprise assumes external social responsibilities, it will establish a good corporate image among consumers, creditors, suppliers, governments, communities and other stakeholders, gain more attention and support from them, and increase the company’s visibility and reputation. The influence among the public, so as to better build their own social relationship network. The external social capital of the enterprise is conducive to cooperation and mutual trust among members, saving time, energy and costs for negotiation, formulation and execution of agreements, thereby reducing the enterprise Between the transaction costs, increase the profit of the enterprise (Lantos, 2001). Corporate social responsibility is an investment that brings many benefits to the company. There is no need for companies to use corporate social responsibility to seek benefits. Corporate social responsibility is the accumulated capital that companies get through giving back to society. Modern companies do not blind their interests through corporate social responsibility,but social responsibility brings many benefits to the enterprise (Worldwide, 2015).
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