Reasons for Corporate Social Responsibility

A business engages in corporate social responsibility to protect the environment.
A business engages in corporate social responsibility to protect the environment. (Image: Thinkstock/Comstock/Getty Images)

Corporate social responsibility is an arm of the body known as corporate citizenship. A business that engages in corporate social responsibility is being a good corporate citizen. That means it is in good standing with the community and respects those who deal with the business (external customers) and those who work for the business (internal customers). A business strives for corporate social responsibility because it is, simply, good for business.

A Deeper Look

Corporate social responsibility looks at how a business’s actions affect society as a whole and the people within it. Corporations are held responsible for their actions through corporate social responsibility, which consists of voluntary ethical behavior toward common social values, including the environment and environmental protection, human rights and employee rights. Many successful organizations mandate a high level of corporate social responsibility.

Society Benefits

When a corporation decides to implement a corporate social responsibility mandate, the community benefits. The business will assess how it impacts society, examine both the negative and positive impacts it makes and adjust as necessary. If it emits high levels of pollution, for example, it may seek out greener solutions. Another example would be a company that charges higher prices for a product but explains that the extra profits would go to a good cause, such as helping disadvantaged children or environmental groups.

Business Benefits

If a business is viewed as being a good corporate citizen -- and therefore implementing corporate social responsibility -- customers may be more inclined to support it, thus increasing awareness of the company's brand. Corporate social responsibility enhances the competitiveness of the organization and creates potential for it to increase revenue. One example would be a business putting out a contract for tender. Since it implements corporate social responsibility, another company that engages in the same mandate would be an attractive partner.

What a Company Does Not Do

Corporate social responsibility can be looked at as what a company doesn’t do. As long as a business does not anything unethical, it is being responsible to its internal and external customers. A socially responsible company does not, for example, mistreat the environment (such as emitting excessive pollution), does not engage in foggy financial practices (misrepresent its financial position), does not misrepresent its products and does not disrespect its employees and customers.

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