CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility

Corporate Social Responsibility

Introduction

The concept of corporate social responsibility is a phenomenon that encompasses the responsibility and obligation of the organization to undertake all the activities and major operation of the business in accordance to the law and ethical standards. In today's competitive global market, the concept of corporate social responsibility (CSR) is underpinned by the idea that companies cannot work as an isolated economic entity (Servaes & Tamayo, 2012, Pp 2-9). The emerging competition, low profitability margin, low entrance cost in the industries has forced the entrepreneurs to come up with new ways in retaining and acquiring new customers. Therefore, the companies in the current market devise corporate social responsibility as a strategy to gain market share and customer loyalty. However, it is a win-win game (Barnes, 2011, Pp. 13-22).

According to the European Union Commission (2006), corporate social responsibility is the act of being socially and environmentally responsible and integrates into the society in collaboration of their stakeholders on the voluntary basis. Corporate social responsibility is the art of doing the right things right. It is a technique to promote the company's vision and business accountability to a wide range of stakeholders. The key areas of concern are the environmental responsibility, social concerns, and the well being of employees. The effect of this corporate strategy can be witnessed on the brand image and corporate reputation (Brammer & Pavelin, 2006, Pp. 435-455).

Discussion

There are organizations who avoid indulging in activities that can be regarded as socially responsible because they think that if they would do that then it would affect their profitability. However, there are few organizations that indulge in activities of social responsible because they consider this option to gain profits.

The focal reason because of which organizations do not fulfil their responsibility towards society and environment is earning profit. In order to earn profit organizations indulge in activities such as they use sub-standard products, use processes that are not environmental friendly or stay in earning enormous amount of money without giving anything to the society (Argenti & Druckenmiller, 2004, Pp. 368-374). Being a social responsible organization and profitability depends on the approach with which an organization adopts this concept.

Corporate Strategy

Strategy is the tools and techniques framed by the organization to achieve its long term vision. Corporate social responsibility is the strategy of an organization as it involves long term participation and support. Companies are focusing on incorporating corporate social responsibility as a part of the corporate strategy of the company. The image of a company and good reputation which is developed through the corporate social responsibility helps in evading the negative image of the brand or organization from the minds of the stakeholders which might have developed because of the adverse event (Barnes, 2011, Pp. 13-22).

According to the research, reputation of the company is affiliated with the consumer's attribute and the brand loyalty. Corporate social responsibility creates goodwill towards the stakeholders and has a significant impact over the organization's profitability ...