It is not an unusual thing for both business owners and consumers to believe that businesses are only looking to make profit and achieve its bottom line. It has been much argued and disputed, but this opinion can be both true and untrue depending on the business and the nature of its business. A business’ bottom line will always be the ultimate goal to achieve, but many consumers believe that there is a certain extent to which businesses should accept responsibility and look to ameliorate the social and environmental problems that the world faces. This is best described with the term of corporate social responsibility, which is defined as “the obligation of decision makers to take actions which protect and improve the welfare of a society as a whole along with their own interests” (Swaen 2002). Before corporate social responsibility became a trend, businesses were required to have a goal towards improving the greater good just to earn corporate status. People ascribe to their own morals and ethics and they expect their favourite companies to not seem self-centred enough to not care only about profits.
Corporate social responsibility has been set as an example and promise for many companies. Coca Cola and Apple aim to increase diversity and inclusion in its hiring practices and Ben and Jerry’s has been adamant about climate change and social injustice, the latter of which Ben and Jerry themselves have been arrested at a protest. Chipotle has a commitment to using only fresh and organic food from sources who align with its “responsibly raised” core value.
Companies stand to benefit from corporate social responsibility in many forms such as winning awards, public recognition, obtaining certifications, sales-tax exemptions, etc. (Sprinkle & Maines 2010). While companies exist to make a profit, they can exhibit social responsibility at the same time. Consumers rely on the brands that they love, at times, to stand for more than money and exhibiting corporate social responsibility can bring consumers that were unaware of the brand and business to it as well. Companies have received tax credits totalling millions of dollars from the federal government, adding to the benefits that businesses can reap from exhibiting this kind of social responsibility. However, there is rarely a situation where there are benefits with no costs. Costs of corporate social responsibility are hard to estimate, but its level of performance can be linked to how well the company is doing financially. McWilliams and Seigel (2001) wrote that if CSR is an important enough cost to businesses, ones that perform better might be more willing to participate in being socially responsible to offset those costs. In contrast, a less well-performing firm would be more reluctant to incur those costs.
Corporate social responsibility is a move that businesses undertake showing a genuine concern for the greater good. Companies can do this and respond to that pressure by showing it to consumers who look for an emotional connection as they take heed of the social trend.
- Caramela, S. (2016, June 27). What is Corporate Social Responsibility? Retrieved February 16, 2017, from http://www.businessnewsdaily.com/4679-corporate-social-responsibility.html
- Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), pp.85-105.
- Falck, O. and Heblich, S., 2007. Corporate social responsibility: Doing well by doing good. Business Horizons, 50(3), pp.247-254.
- Swaen, V., 2002, June. CORPORATE SOCIAL RESPONSIBILITY: DO MANAGERS AND CONSUMERS HAVE THE SAME CONCEPTION OF “DOING GOOD”?. In 10th international conference of the Greening of Industry Network June (pp. 23-26).
