Social corporate responsibility (CSR) is a long term framework that companies adopt to enhance the welfare of society. In the past decade, the initiatives companies took for their stakeholders offered them several benefits regarding reduced costs, maintaining legitimacy and gaining competitive advantages. Different companies like Coca-Cola and Walt Disney, through their business, built reputational capital and achieved a win-win position through the value creation process. The term CSR is rapidly influenced by legitimacy and engaging modern concepts like business ethics, managing stakeholder’s value and social performance. The expression of these terms is related to multiple investment options, practices and corporate citizenship acts(Gong Ke, Z. Z. 2011).
Business management scholars always investigate the significance of CSR as under organizational objectives, yet the influence of profitability is linked to these goals. The economists Milton Friedman believed that companies should focus on economic interests as the stakeholder’s value. The variety of stakeholders, such as suppliers, employees, and customers’ community, feel value creation is a significant process because business gets to benefit from CSR programs. The stakeholder’s relationship can be neutralized when business cases are more pragmatic(Jingwen Mi, S. J. 2018). Socially responsible investment movement allows a positive relationship between corporate financial performance and corporate social performance. A research study has found a relationship between financial performance and social initiatives of companies that were aligned on their organizational goals. Considering CSR a strong business case, it is likely to consider that improvement of its bottom line. This viable choice of business is used to risk management and implement low-cost practices. Due to CSR implementation, a competitive advantage is achieved, which related to synergistic value creation. A business case under empirical research work for the potential structure of the economy that is built on the syncretic stewardship model ((Flávia Cavazotte, N. C. 2016).
CSRs or Corporate Social Responsibility have developed into a very integral element of today’s business setting. CSRs are mainly an ever progressing business process that initiates sustainable business development into any organization. Actually, these practices are the procedures that support a company to be socially responsible to not only its stakeholders but also towards the general public. The existence of a good CSR develops a positive image on the economic, social and environmental factors attached to the business.
Katie Schmidt is a creator of a famous clothing brand ‘Passion Lilie’, she is a proud business entrepreneur for starting an ‘ethical apparel brand’, that means an ethical business, with a fine CSR, can impact positively on a business by developing an organizations image, creating the group and motivating the employees as an entrepreneur. The reason behind in most of the times public opinion is very important for the success of the company. When a typical company has a positive picture in its customers’ eye, it surely can support the business to develop a reputation and name with their consumers that can be very valuable for all the long and short term success (Gong Ke, Z. Z. 2011).
The organizations in the developed countries may react to civil society and shareholders pressure to have social responsibility with extra seriousness by implementing strong CSR structure, except only to settle their opponents and exclusive of any awareness to real changes in their procedures. That means deliberate CSR obligations can just be the tool for organizations in the progress to anticipate actual regulation.
For example, Coca-Cola has started a new product Coca-Cola Life in many countries recently. It is sold in a recyclable bottle or in a green can, many critics state that with as much as 17 grams of sugar and 68 calories in one serving of soft drink is a tactic to trick the customer by the healthy product appearance. Nutritionists say that Coca-Cola Life must not be taken as a healthy option (Low, M. P. 2016).Displaying valuable Corporate Social Responsibility is a significant part of a company’s bigger goals. It is moreover an integral part of developing a more engaged company (DISNEY, W. 2019).
The question for organizations to adopt social responsibility is a never-ending issue. There apply two major factors of opposing Corporate Social Responsibility. Number one, it is thought that a company is a profit-based operation and production unit, and profit escalation is the basic goal of its administration. It has no obligation and responsibility to fulfil the government as well as society’s responsibilities towards the goodwill of the world. Secondly, the corporate social responsibility will change the way of the utilization of capital of the company that will be resulted in cost increase and fewer profits. It also can weaken the cooperativeness of the company; decrease the main targets of the company, therefore affecting the interests of financiers, workers and consumers. Thus, the company cannot afford this much social responsibilities. But, on the other side, many critics think that it is important for companies to take CSR for the betterment of society and its people (Guido Berens, C. B. 2005).
The significance of a strong CSR can be observed by the different research levels and examinations made over time by the time either in the shape of examining a company’s achievement or just by finding out by questionnaires and surveys the significance that these CSRs are kept at. One such study that supports this conducted by Cone Communications, they in research concluded that 60% or more Americans think that businesses should work for environmental and social change where government rules are absent. Other than this, a massive 90% of customers expressed their opinion that they like to buy a product of such company who worked for any issue people care about and around 75% of people surveyed rejected to purchase from such company who come to know that the company supports any contrary issue(Flávia Cavazotte, N. C. 2016).
In the present day, a company’s status is very important as customers, shareholders and employees are starting to priorities the Corporate Social Responsibility when selecting a product or brand as well as any organization for support or investment. Ahead of it, the same persons have started to think that the investment companies are liable for the change in their business approach, profits and practices. Failure to work at a suitable level will surely direct to some type of negative consequences for the company in question. Walt Disney is a globally famous animation entertainment company. To pass happiness to people around the world is their prime objective. Walt Disney produces goods with an ethical approach by minimizing its environmental effects. In March 2019 Walt Disney expanded social charity services and promised to spend 100 million USD in the coming five years to support and encourage patients of children hospital and families all over the world (Jingwen Mi, S. J. 2018).
In China, Alibaba group has worked to develop the quality of life of people of rural areas. Farmers in China are speeding up their integration into the era of internet, captivating young people from around China for the development of rural areas, promoting people of rural areas, and changing the global perception about China (Soo, Z. 2019). Alibaba has worked for the international market, created different electronic stages to support economic development, helped underdeveloped and developed countries, above all supported young people incorporated into world’s trade, and benefited the small business groups around the world.
Companies can get capabilities, social capital and resources during the course of accepting social responsibility. It brings several advantages to the companies, like, customer loyalty, retention and absorption of good employees, development of the commercial image, social trust and network, and progress in innovation potential (Low, M. P. 2016).
Business firms acquire transparency and sustainability due to CSR implementation because it is ubiquitous. Due to the structural framework, economic behaviour describes the relationship between society and organization, yet the organizational goals are necessary to be followed. In some research frameworks, this relationship is linked with aims and objectives. Certain values in organizations emphasize that sustainable development is oriented to organizational goals. CSR under multinational enterprise is implied on business strategy with an inherent focus on global supply chains. The globalization under environment protection and human resource management is prevailed in the CSR framework to organize sustainable development goals (Flávia Cavazotte, N. C. 2016). Inter-governmental bodies under cooperation and UN-based conventions have viewed CSR impact inherently.
The political, social and environmental factors are key to consider in small, medium enterprises because global supply chains are working on effective communication and technology-based interventions. According to research evidence, social values led models to allow organizations to adopt CSR initiatives because it works positively for economic and non-economic reasons. The syncretic business model allows narrow and broad bases that show how financial performance can directly impact corporate social responsibility model of organizations. It is found from research studies that organizational goals are positively related to financial performance that impacts CSR. In different frameworks, firms need to identify and exploit the opportunities that can serve business productively (Worldwide, F. 2015). It is true that stakeholders’ eyes’ should not be blurred under the act of corporate social responsibility but accurate picture should be given.
Worldwide, F. (2015, November). Financier. Retrieved from The importance of corporate social responsibility: https://www.financierworldwide.com/the-importance-of-corporate-social-responsibility
Flávia Cavazotte, N. C. (2016). A Study of Publicly Traded Companies. Internal Corporate Social Responsibility and Performance.
Guido Berens, C. B. (2005). Corporate Associations andConsumer Product Responses. TheModerating Role of Corporate BrandDominance, 35-48
Soo, Z. (2019, November 11). South China Morning Post . Retrieved from Consumers from China’s smaller cities lift Alibaba to new Singles’ Day record as buyers shrug off trade war: https://www.scmp.com/tech/e-commerce/article/3037137/chinese-consumers-spend-us1-billion-first-minute-alibabas-singles
Jingwen Mi, S. J. (2018). Journal of Management and Sustainability. The Relevance of Social Responsibility and Financial Performance of Listed Companies , 41.
DISNEY, W. (2019). 2019 CORPORATE SOCIAL RESPONSIBILITY UPDATE. The Walt Disney Company.
Gong Ke, Z. Z. (2011). Engineering Education and Management. In C. Z. Liangchi Zhang, In JiLin Province Native Brand Design Thinking (pp. 437-439). Berlin: Springer.
Low, M. P. (2016). Asian Journal of Social Sciences and Management Studies. Corporate Social Responsibility and the Evolution of Internal Corporate Social Responsibility in 21st Century.