Why have Companies become Concerned about Corporate Social Responsibility in Recent Years?
Companies are paying more attention to CSR - WHY?
You can change the world when you care for the world. The thoughtfulness and compassion towards people and society is the business approach in a new corporate culture. It aims at delivering environmental, economic, and social benefits.
Corporate Social Responsibility is not just about the company’s profit but more about doing a greater good for society. As the employees demanded a change in corporate culture, Corporate Social Responsibility came into being.
But, why are businesses concerned, and what approaches do companies incorporate to adapt Corporate Social Responsibility in their culture? We will discuss this new corporate culture in detail in our article
Why is there a need for Corporate Social Responsibility?
Corporate Social Responsibility aims to improve shareholder trust and long-term profits through high ethical standards and positive public relations. By doing so, it will reduce the legal and business risk if they take responsibility for corporate actions.
However, it does not evolve all of a sudden. It came into the picture when businesses faced pressure from crucial groups in society.
Consumers are demanding businesses to become socially responsible. In North America, it is found that people are willing to buy products from companies whose environmental and social performance is excellent.
In contrast, they would punish the companies with a poor social performance by not buying their products. Like, Starbucks did face enmity from anti-globalization rebels for mistreating the staff and wasting water.
Supply Chain Pressure
As the consumer’s trust and loyalty towards a company are influenced by social responsibility, their supply chain visibility also becomes important.
Many companies are taking part in Corporate Social Responsibility both within and internally the supply chain. If you visit the website of IKEA, you can check how “People and Planet” are written in their policy.
Pressure from Shareholders and Investors
About 61 per cent of Americans own shares. However, the selling and buying of shares depending on the social performance of the company. You must know how investors would want every detail of how their money is being used by the company they are funding.
Also, it has been reported that about 83 per cent of professional investors tend to invest in a company that follows Corporate Social Responsibility.
Why should businesses adapt to Corporate Social Responsibility?
Companies are now increasingly being competitive to become socially responsible. Also, if the companies are socially responsible, that can present a positive image to both shareholders and consumers.
Let’s discuss the need for businesses to embrace Corporate Social Responsibility.
If businesses are faced with security and economic concerns, they can have an immediate negative impact on their image. So, it would be highly beneficial for them to invest in social responsibility.
Also, businesses will succeed when they give back what nations and communities have bestowed to them over time.
Strengthen Brand Perception
Your company’s image will improve if you adapt social responsibility. Moreover, consumer’s perception matters to boost the company’s profile. So, if a company actively engages in social activities and responsibilities, the brand will become publicly recognized.
Engaging customers and employees
Businesses need to build loyal relationships with clients and customers. Here, Corporate Social Responsibility can help to engage with clients and customers. The positive relationship will increase profits and boost sales.
Also, it is important that businesses take care of their employees. The Responsibility will only be efficient when team members and leaders are working together in harmony.
How do companies approach Corporate Social Responsibility?
Companies approach Corporate Social Responsibility differently depending on the corporate culture, available resources, and assets.
Companies incorporate cause-related marketing when they are associating with a civic organization and charitable trust for their products sale as donations. The motive is to increase awareness about a social program while promoting its brand name.
Businesses use marketing techniques to fulfill the desired social goals. Mostly, the non-profit organizations and governments use the marketing option to reach a wider audience with their social cause.
Some examples of social marketing are TV commercials and cinematic technology to create a dramatic and emotional effect.
When businesses send charitable gifts from their organization to any NGOs, it is corporate philanthropy. However, most of the time, companies would want their donations to become publicly recognized rather than being anonymous.
This is done to market their company as well as helping the society.
So, Corporate Social Responsibility can help the business boost employee engagement, increase creativity and innovation, and create a positive workspace for all. Therefore, businesses are realizing the importance of having a corporate social responsibility model in their culture.
However, the motive of Corporate Social Responsibility is to make you a socially responsible employer to make your employees align with the values of your company.