The Impact Of Corporate Social Responsibility

Corporate Social Responsibility (CSR) is something that affects all companies and should be an active factor in the company’s decision making. It is something all corporations need to care about. CSR is when business’ or corporations take part in an initiative or campaign for a cause that will benefit society and/or in some way make the world a better place (Taylor, 2015). Initially, Corporate Social Responsibility started to take shape around the 1950’s, but some say that it dates all the way back to the 1800s, the idea of CSR was seen (Carroll, 2007). One may think that because it is dated so long ago, it doesn’t have an important impact today nevertheless, it is proven that Corporate Social Responsibility is a pathway for entities to self benefit as they are in the process of benefitting society.

This recent reality, combined with globalization, is forcing companies to forge new kinds of relationships with buyers and countries. The financial valuation of companies are taking ever greater account of intangible elements, such as brands, patents and the company’s general image, with companies being bound to take account of these things in an effort to satisfy their shareholders. Environmental protection has become a highly motivating factor, and companies are being pressed to identify stakeholders with whom to team up. With brand value and reputation increasingly being seen as one of a company’s most valuable assets, CSR is now seen as building loyalty and trust amongst shareholders, employees and customers ( Tssa, (n.d.)).

CSR AS A WAY TO CREATE BETTER BRAND IMAGE AND GAIN POSITIVE ATTITUDES REGARDing BRANDs (Ghosh,ghosh,das,2013)

Many companies question whether positive acts of corporate social responsibility are beneficial to the organization’s profitability or simply cost the company money. Although practicing good corporate social responsibility can be expensive at times, the benefits and positive outcomes outweigh the costs spent. Among many other positive outcomes, acts of corporate social responsibility have the ability to increase investor relations, can benefit a company’s long-term image, and can lead to the development of new products. Thus, good corporate social responsibility is very good for business.

Friedman (2007) further argues that socially responsible firms will be at a competitive disadvantage due to the added expense incurred by CSR activities. Counter to this Smith (2002) with the evidences drawn from the case of Alfred Sloan’s decision proves that CSR doesn’t bring the competitive disadvantage with it. He argues that, firms that have good SCR record in public will be given better brand image and the investors will show more trust in such companies. Hence even though the companies initially lose their part of profit o CSR, they will after a period of time, attract more and more investors and broaden their consumer base which improves both the investment and gives advantage of efficiency due to large scale of operation.

With the spread of social marketing and CSR in the world, organizations tend to not only consider the consumers’ demands and the companies’ profit, but also take the consumers’ and societies’ long-term benefit into account. Hildebrand,D,et,al (2011) demonstrated that the CSR activities can make up the central, special and core characteristics of the company identity, the identification of the corporate can also be aroused due to CSR activities. Moreover, Porter and Kramer (2006) highlighted that CSR can aid companies create the ability to achieve corporate resource so as to build a sustainable and defensible competitive position. So the companies should consciously undertake corporate social responsibility.

Hot debates were arose everywhere in the society about the extent of Corporate Social Responsibility (CSR). Mallen Baker (2004) states that CSR is about how companies manage the business processes to produce an overall positive impact on society. Supporters of CSR claim that Businesses and Corporations are not only about making money especially for big business. They should show social responsibility, moral standard and city spirits to the community. They should give something back to the society. Critics argue that Businesses are owned by their shareholders - money spent on CSR by managers is theft of the rightful property of the owners by

This information can, therefore, conclude that adopting a level of Social responsibility can help a business to attract consumers by differentiation from its competitors, a consequence of this can help to improve the business brand name and image.

The research conclusion of the relevance between corporate social responsibility and corporate economic performance is not similar. They can be mainly divided into three views. One view is that company’s social obligation has a negative relevance with the economic performance of companies; another view is that corporate social obligation can cut down transaction expenses, enhance the competitive power and the manufacture efficiency, finally it increases the company 's financial performance. Some literature studies think that there is no relevance between company’s social obligation and its financial obligation or the relationship is nonlinear.

First of all, the company will establish a better reputation that is essential in order to access financial recourses and to get permit by government (Hamman, 2003, p23). A positive relationship between Corporate Responsibility index and corporate reputation is illustrated by Lewellyn (2005). In addition, the high reputation of organization will attract highly qualified skilled employee to work for the company (Hamman, 2003). Moreover, according to the result of CSR Europe’s 2000 study of consumer attitudes toward CSR in 12 countries, Grills &Spring (2001) confirm that one fifth of consumers prefer to but products which are responsible for socially and environmentally. Secondly, successful use of CSR can result in long-term stability (Lewellyn, 2005). According to Lewellyn’s (2005) opinion, companies that have a visible approach to corporate responsibility are

Corporate social responsibility (CSR) is about how businesses align their values and behavior with the expectations and needs of stakeholders - not just customers and investors, but also employees, suppliers, communities, regulators, special interest groups and society as a whole. CSR describes a company's commitment to be accountable to its stakeholders.

Organizations are expected to actively analyze the impact of their operations on the overall financial and social systems in which they operate. Businesses should know expectations of the society and then manage their behavior and actions to yield results that address those expectations. The implementation of corporate social responsibility plan by an organization is an honor to humanity and nature. CSR discourages organizations from engaging in activities that threaten the life of people affected by its operations. An example is waste management strategies a company puts in place to ensure an appropriate disposal of by-products. Waste materials can pose health dangers such as cancer, contamination of water and food which may result in illnesses or even death of community members.

Trust is one of the most important components in the business to have a long term relationship and similarly Brand authenticity is also an important factor to be considered for the sustainable development in business. This study will focus on the effect of CSR and on Trust and Brand Authenticity and their behavioral outcomes on Employees, Customers and Investors.

Corporate Social Responsibility has been popular strategy among companies. Numerous companies release CSR report and variety of studies have been conducted on different aspect of CSR. Although many researches have been conducted, there are some controversy about concept and effectiveness of CSR. According to the recent study, CSR reports are significantly related to short and long-term measurement of financial performance (Orhan Akisik • Graham Gal, 2014) and M. Tsoutsoura’s date (Tsoutsoura, 2004) indicates that the sings of the relation between CSR and financial performance were positive. In addition, CSR influences

Agunis, glovas (2012), Paper entitled “what we know and don‟t know about corporate social responsibility: A review and research agenda” in Journal of management, based on 588 journal articles and 102 books. The study provided a framework of CSR actions which affects external as well as internal stakeholders and outcomes of such actions. The paper also enhanced the knowledge regarding levels, forms of CSR; need to understand CSR with outcomes etc. further the researcher also suggested a framework of research design, data analysis and measurement for future research of CSR.