A Quick Guide on Corporate Social Responsibility [6 Main Characteristics Explained!]
At this point of time, corporate social responsibility has made a buzz in the market place to reach more number of customers and improve the brand’s image at the same time. Almost every company is focusing on doing corporate social responsibility for the betterment of society as well as themselves.
This, however, is also important for the students to understand that a little step can create a lot of difference in society. With the help of this blog, you will be well-versed with the advantages & disadvantages of corporate social responsibility to understand them in a detailed manner.
The importance of this topic has gained so much importance that students are getting assignment help on the same to ensure knowing when enters into the corporate sector.
Read the blog till the end to understand the six main characteristics of corporate social responsibility as well.
What Is Corporate Social Responsibility & Its Importance?
Corporate social responsibility is the company’s aim to become socially accountable. A step was taken towards the welfare of the society by the corporate in order to get resources for the optimum utilization of the same. The fact that resources are limited, we have been studying from school time, and now, to avail them for the company has become a task, the corporate world is facing.
Having said that, there are also certain reasons where the companies somehow contribute to the dis-balance in the society or its environment. Therefore, corporate social responsibility is the one step towards making things ‘right’.
In order to make the students understand this whole concept in a detailed manner, they are given assignments to assess the business conditions and how it is contributing to the society.
Importance of Corporate Social Responsibility:
- Customer Acquisition: By performing corporate social responsibility, a company has the access to reach more number of people, which if properly strategised may turn into customers. This results in acquiring new customers in the business and improving the customer database for the long run of the business.
- Customer Retention: Not only focus upon the new customers but it is important for the business to focus upon the existing ones as well. And, a positive step towards the benefits of the society through corporate social responsibility helps in retaining them in the business showcasing the brand’s contribution.
- Brand image: The image of the brand is what the customer decides, and in order to improve it, businesses ensure the usage of every tactic and strategy to stay in the game. With that being said, corporate social responsibility is one of them, this creates a positive image in the mind of the customers and hence resulting in improvement of the brand image simultaneously.
- Customer Engagement: When a company does social responsibility, they scream from every reachable source through social sites or other print media to spread the word. This, however, also involves the customers with various programs for brand recognition that creates an engagement for them which directly contributes to the brand and its operations.
The above points show the importance of corporate social responsibility for the betterment of the environment. This will ensure the sustainability of the company and ensure getting support from the people around the society.
Having said that, let us discuss the advantages & disadvantages of corporate social responsibility in the further section to understand the same in a detailed manner.
Advantages & Disadvantages of Corporate Social Responsibility
Every version of the story cannot be believed until you know the proper information of the same. The reason this is brought up is that there is a positive and negative aspect of every story but it is hard to believe it until you know it. This is why when understanding the concept, it is also important to know the advantages & disadvantages of corporate social responsibility in detail for making the right decisions in the company.
Advantages of Corporate Social Responsibility:
- Brand Recognition: Every company does corporate social responsibility to get acknowledged in society or possibly at a wide level. This will help in making people aware of the brand and reach a large number of the audience by performing such activities.
- Improves Goodwill: Getting the brand acknowledged by a large audience and having more number of customers will directly contribute to increasing the reputation of the brand and hence builds strong goodwill of the company.
- Strong Customer Relations: A step towards the welfare of society helps in building strong customer relations by the brand. It can be build after interacting with the customers positively and creating a positive impression on them.
- Effective Advertisement of the Brand: With making a huge presence in the market place, corporate social responsibility helps in creating awareness about the brand to reach a large number of audience for promoting the brand. This automatically results in an effective advertisement of the brand.
- Attract New Investors: Putting a foot forward to create a difference in society for good helps in showcasing the accountability of the brand in the market place. This helps in making strong networking of the brand, resulting in attracting new investors in the business.
The above are the advantages of corporate social responsibility as discussed for business organizations. This results in determining the growth of the company by assessing its networking and hence attracting new customers and investors to make new investments in the company which can be proven right for both the company as well as the investor.
Having said that, a coin has two sides, a corporate social responsibility on a business does too. Answering the question ‘What are the pros and cons of corporate social responsibility?’, in the above section we have already discussed the positive outcomes however in the section below let us check the negative sides too:
Disadvantages of Corporate Social Responsibility:
- Focus of profit-making: For any business organization, profit-making is the ultimate objective they work for, however a shift for the welfare of the society also disturbs the focus of the business. This is the reason they do not make progress financially and spend their resources on social responsibility.
- Impatient customers:A corporate social responsibility is for the good cause in the society performed by the companies. However, if done for the welfare and good gause then it is treated well by the people but when going beyond a certain level and fails in the process, becomes a PR stunt for the customers. This not only harms the brand image but also shifts the customer’s interest to another brand.
- Additional expenses: While fulfilling these responsibilities, there are certain expenses that a company have to make in order to ensure the proper run of their program for corporate social responsibility. This in return becomes an additional expense in the books of accounts affecting the financial performance of the business.
- Clash with the main aim: Every business organization runs with following different objectives or goals for their operations but the only single common aim for which every company works hard is to make money. But, this activity is for the betterment of society therefore making money in the same is not possible, which indirectly clashes with the aim of the business and affects the longevity of the same.
- Higher operational costs: When working for society, there is also cost associated with it, which a company has to bear. But, some bigger companies, they hike the price of the products which indirectly is paid by the customers but not all businesses can opt for this strategy as it will lead to a shift in the brand preference of the customers which can cause a greater loss. This is the reason why companies have to bear these losses themselves to an extent.
The above showcase the disadvantages of corporate social responsibility that highlights the challenges a company can face even after performing these activities.
Let us proceed further with the blog, and understand the six main characteristics of corporate social responsibility in the section below.
6 Main Characteristics of Corporate Social Responsibility
The advantages and disadvantages of corporate social responsibility have already been studied in the earlier section of this blog, having said that, it then becomes important to study it further to get insight on the same.
Corporate social responsibility has gained popularity in the last decade, as there have been impacts directly seen by the people. This has then compelled the companies to come up with a solution to their wrongdoing after harming the environment to a huge extent.
The reason why this concept of corporate social responsibility was introduced for the right deed for the companies which they have been impacting all these years. Furthermore, let us understand the six main characteristics of corporate social responsibility as given below:
- Voluntary: The voluntary action is when the company supports a local cause for the improvement in the society, without expecting anything in return and doing their good deeds. By doing this, the company can show their gesture of concern for society. This will showcase the positive doing of the company and show their brand’s sincerity for supporting the people of its society.
- Managing External Consequences: Social responsibility comes with a bigger duty on the head for the companies. The company might have to deal with certain external consequences spread by the print media or even the customers. However, in turn, it can be beneficial for the companies as well to solve a conflict and enhance their brand image in the outside world. This can help a company to regain the trust of the customers and make a space in the market place.
- Multiple Stakeholder Orientation: Since large companies have various stakeholders such as their employees, customers, suppliers and local community for the sustainability of the company, therefore it not only has a responsibility towards the shareholders but stakeholders as well. Performing these activities will ensure the running of the business for a longer period and availing resources when in need from society.
- Social and Economic Alignment: Corporate social responsibility is never done with the motive of earning profits, but is done where the social and economic alliances can somehow meet. This helps in developing the brand image in the society to a greater extent and also increase their earnings so it becomes a win-win situation for the companies.
- Practices and Values: When engaging in corporate social responsibility, the company has certain practices which they need to follow and make strategies for bringing up the solution to the social issues. Having said that, the company also follows their core values to create a positive image in the market, being within a boundary.
- Beyond Philanthropy: In most countries, the concept of corporate social responsibility is still taken as a token for charity which is not true. In fact, it is for the well-being of the society that is giving the company resources to continue their operations. Also, the companies are spending for what they have once made a mistake, such as air pollution, water pollution etc harming the environment. This is the solution of good deed for the wrongdoing of the company themselves intentionally or unintentionally.
The above are the six main characteristics of corporate social responsibility that every company have to focus upon to perform these activities effectively and efficiently.
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