Corporate Social Responsibility

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Supervised by: Dr.Kabel                           Prepared by: Safae Bounakaya

                                  ABSTRACT

Corporate social responsibility, corporate citizenship, or corporate conscience refers to all social actions and activities that a business does to contribute to the wellbeing of the society in which it is operating, which means going beyond what it required by the law and the financial responsibilities. The CSR social benefits are uncountable in the way it helps solving several social problems, protecting the environment, and improving the standards of living in general, but the CSR is not only beneficial for society as a whole, but also it represents a key factor of success in the business world nowadays. Firms are increasingly going socially responsible to survive in a competitive market, and using it as the one and only tool that can strengthen their brand name, position it in people’s minds, and build their positive reputation. That’s why we see big companies are allocating a huge amount of their budget for the CSR and government as well are encouraging firms to do so and providing them with subsidies.

                                     CORPORATE SOCIAL RESPONSIBILITY

              In the last decade, corporate social responsibility has been one of the most debated topics in business world as a result of an increase of the awareness by firms and government about this matter. But the most debated question related to this topics is this one: Besides the general social interests, is there any corporate interests, are firms benefiting from CSR at different levels? If there are any, by which process is CSR contributing to the firm’s profitability? With no doubt that the answer would a yes; companies have more than one reason for being socially responsible; otherwise, they wouldn’t go for it. It is true that some firms care about the wellbeing of their society, but this is not the first reason why they allocate important amount of money to invest in CSR, it’s obviously the pursuit of their financial interest, after all, it’s the reason why they do exist.

             Being involved in some CSR activities prevents firms from spending extra costs and reduces the exposure to numerous risks which has recently known a large acceptance among firm’s executives, and this can be achieved by following three main forms of CSR activities. First, the equal employment opportunities policies and practices which is about eliminating all different kind of barriers that could exist; for example, age, sex, religious beliefs, political opinions, and national origins, so that all staff members can have equal career opportunities, thing that will enhance job satisfaction and the harmonious work relationships, which will eventually lead to a low turnover ratio; as a result, firms won’t have to spend more money on hiring new staff (T.Smith, 2005, pp.57-65). Second, Energy-saving and other environmentally sound production practices which is a form of the CSR activities directed towards the natural environment in particular. Recent statistical data has shown that having an eco-friendly business or going green certainly reduces firm’s expenses in more than one way; for instance, buy and use recycled paper, avoid the paper clutter, and switch ordinary bulbs with the energy-saving ones. All these acts may seem to be simple, but they make a noticeable contribution in cost reduction (NEWMAN, GEORGE, GORLIN, MARGARITA, DHAR, RAVI, 2014, pp. 823-839). Third and finally, efficient management of community relations which refers to being a good neighbor instead of a profit hungry which means building positive and sustainable community relationships; this will allow firms to beneficiate from tax advantages for further investments in other countries, also in some cases the number of regulations imposed can be reduced because these kind of firms are perceived as a community friend (Korschun, Daniel, Bhattacharya, C. B, Swain, 2014, pp. 20-37).

               Gaining a competitive advantage is another important result of using CSR policies and practices and this can be illustrated by three main aspects. The first one is the EEO policies and practices already mentioned in the previous section. When firms have explicit EEO statement, it will provide them with a strong competitive advantage in terms of attracting a highly qualified and talented employees and keep them for a long period of time and these firms are being perceived as companies with inclusive policies which create an accurate image about them. All of these will definitely make the uniqueness of these companies and set them apart from their competitors (A.Calabrese, R.Costa, T. Menichini, 2013.pp. 50-58). The second aspect of gaining a competitive advantage through CSR is the customer and investor relation programs. Firms implementing CSR activities are strengthening their brand name and using what we call positioning strategy - which refers to fix the brand name in people’s mind – to attract a large number of customers as much as possible and gain their loyalty. Furthermore, this will have a positive impact in terms of attracting new institutional investors that are looking for companies that respect their organizational missions and principles and with a positive records on community involvement and employees relationships (Korschun, Daniel, Bhattacharya, C. B, Swain, 2014, pp. 20-37).The last positive consequence of adopting CSR policies is the corporate philanthropy which refers to all different ways by which companies can have a positive impact on society through using their different resources like finance, facilities, or their own products and services for charitable institutions and others who need help in the community to support beneficial reasons, and this will be beneficial for companies from a public relation standpoint as well as from a financial standpoint because in some cases especially in competitive market, customers base their decision on company’s reputation. So obviously the corporate philanthropy is a powerful competitive advantage (B.Seifert, Morris,A. Sara,Bartkus,R. Barbara. 2003. pp.195-211).

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