Corporate governance strategies employed by firms that are ethical, societally friendly, and beneficial to its community Show
What is Corporate Social Responsibility (CSR)?Corporate social responsibility (CSR) refers to strategies that companies put into action as part of corporate governance that are designed to ensure the company’s operations are ethical and beneficial for society. Categories of CSRAlthough corporate social responsibility is a very broad concept that is understood and implemented differently by each firm, the underlying idea of CSR is to operate in an economically, socially, and environmentally sustainable manner. Generally, corporate social responsibility initiatives are categorized as follows: 1. Environmental responsibilityEnvironmental responsibility initiatives aim to reduce pollution and greenhouse gas emissions and the sustainable use of natural resources. 2. Human rights responsibilityHuman rights responsibility initiatives involve providing fair labor practices (e.g., equal pay for equal work) and fair trade practices, and disavowing child labor. 3. Philanthropic responsibilityPhilanthropic responsibility can include things such as funding educational programs, supporting health initiatives, donating to causes, and supporting community beautification projects. 4. Economic responsibilityEconomic responsibility initiatives involve improving the firm’s business operation while participating in sustainable practices – for example, using a new manufacturing process to minimize wastage. Business Benefits of CSRIn a way, corporate social responsibility can be seen as a public relations effort. However, it goes beyond that, as corporate social responsibility can also boost a firm’s competitiveness. The business benefits of corporate social responsibility include the following: 1. Stronger brand image, recognition, and reputationCSR adds value to firms by establishing and maintaining a good corporate reputation and/or brand equity. 2. Increased customer loyalty and salesCustomers of a firm that practices CSR feel that they are helping the firm support good causes. 3. Operational cost savingsInvesting in operational efficiencies results in operational cost savings as well as reduced environmental impact. 4. Retaining key and talented employeesEmployees often stay longer and are more committed to their firm knowing that they are working for a business that practices CSR. 5. Easier access to fundingMany investors are more willing to support a business that practices CSR. 6. Reduced regulatory burdenStrong relationships with regulatory bodies can help to reduce a firm’s regulatory burden. Example of CSR in CanadaIn Canada, mining companies often engage with Aboriginal communities and groups. Converting land sites into mines can cause a significant environmental impact on the Aboriginal communities living near the sites. Several Canadian mining companies engage in corporate social responsibility with local communities to ensure that the adverse effects are minimized. For example:
CSR of StarbucksStarbucks is a well-known firm that practices corporate social responsibility. As indicated by the company: “Starbucks’ social corporate responsibility and sustainability is about being responsible and doing things that are good for the planet and each other.” Starbucks’ CSR initiatives include:
Related ReadingsThis has been CFI’s guide to return on Corporate Social Responsibility. To keep learning and advancing your career, the following CFI resources will be helpful:
Which of the following statements is true of corporate social responsibility quizlet?Which of the following statements is true of corporate social responsibility (CSR)? It is demonstrated by companies that consider their relationship to the society in which they operate.
What is the best description of corporate social responsibility quizlet?Corporate social responsibility is the managerial obligation to take action to protect and improve both the welfare of society as a whole and the interest of organizations. a companies obligation exert a positive impact and minimize its negative impact on society.
What is the best definition of social responsibility?Social responsibility is a moral obligation on a company or an individual to take decisions or actions that is in favour and useful to society. Social responsibility in business is commonly known as Corporate Social Responsibility or CSR.
Which of the following is an example of corporate social responsibility?Some of the most common examples of CSR include: Reducing carbon footprints. Improving labor policies. Participating in fairtrade.
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